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10 NEW ENGLAND CONDOMINIUM -OCTOBER 2019 NEWENGLANDCONDO.COM BOARD OPERATIONS Warranties and Service Agreements What You Should Know About Coverage BY A J SIDRANSKY As in life, there are no guarantees Sladkus Reich Greenberg & Atlas, a law machine – and that might or might not when it comes to building systems, parts, firm in New York City. “The components include the labor involved in repairing and components. But unlike life, there of a building for which you’d expect to or removing/reinstalling it. Now let’s as- are warranties and service agreements see a warranty—and it depends to some sume the dishwasher was installed during to ease the pain when something breaks extent on where the building is in its life a renovation, and it’s the contractor who down, gets damaged, or proves to be de- fective. Like a kind of insurance, warran- ties protect our investments in cases of perhaps 10 years – and windows, among be paid for by the manufacturer – but the unexpected events, working hand in hand others. The Cadillac of warranties is a contractor would be responsible for the with service agreements to keep things 20-year, no-dollar-limit (NDL) warranty. labor. running at top performance. What’s a Warranty? A warranty is defined in part as “a written guarantee, issued to the purchaser vices, Inc., in Holliston, Massachusetts. But any damage resulting from the work of an article by its manufacturer, prom- ising to repair or replace it if necessary, vary a bit, warranty laws are pretty uni- within a specified period of time. In con- tract law it is further defined as a prom- ise that something in furtherance of the ranties. But often management compa- contract is guaranteed by one of the con- tractors, especially the seller’s promise Levy stresses that it’s important to pay that the thing being sold is as promised attention to what the warranty provides. or represented.” Both of these definitions have multiple applications in the context of multifamily communities, including co-op and condo corporations and asso- ciations. Not all warranties are the same. “Dif- ferent warranties work in different ways,” specified period of time, the manufac- says Jeffrey Reich, a partner at Schwartz turer will replace the part – or the whole cycle—are the roof, which might have a caused the damage that led to the dish- warranty of 10 to 20 years, the boiler – washer breaking down. The parts would With those, whatever the cost, the manu- facturer will repair it.” David Levy is President of Sterling Ser- He explains that while specific terms may done by the installing contractor would versal nationwide. “To my knowledge, make right. It is of the utmost importance there are no unique laws related to war- nies are too informal about warranties.” tors. Manufacturer Versus Contractor Warranties In general, warranties can be split into two main groups: parts and labor. So to look at this simply, if you buy a dishwash- er and it breaks down within a certain If we apply the same format to, say, a roof, the components of the roof are pro- tected under the manufacturer’s warranty. be the responsibility of that contractor to that when work is done, contract nego- tiations include warranties from contrac- Edith Schickedanz is an account ex- ecutive with Gumley Haft, a co-op and condo management firm in New York City. “Usually, there are two different types of warranties,” she says. “One from the manufacturer for the parts, and the other from the contractor who does the installation and work. Manufacturer war- ranties can last for many years, and con- tractor warranties are usually for a year.” Schickedanz explains that you want both, but that often the manufacturer’s warran- ty will require a contractor to do repairs that have been approved by the manufac- turer. She also stresses that the best war- ranty is the 20-year NDL, because “over time, contractors go out of business, and are no longer there to cover their war- ranty.” Warranties may also carry exclusions; for instance, a health insurance policy might carry an exclusion for preexisting conditions. If your building’s roof carries a warranty, but if your super goes up to fix a leak and makes the situation worse, the warranty may be voided for all or part of the roof and that claim. Levy describes another type called a system warranty that can be of particular importance when considering something like an asphalt shingle roof, which are common in the suburbs around Boston. “In the roofing business,” says Levy, “we use asphalt shingles, which comes with a 50-year product warranty. The labor re- quired to install or repair the roof usually comes with a two-year warranty from the contractor. The expensive part of the job is the labor – not the shingles. Effectively, you are left without a good warranty for 48 years. You can buy a system warranty from the manufacturer for 10 to 25 years, for a small additional cost. The contrac- tor warranty is in place for the first 24 months, then the manufacturer’s system warranty kicks in.” Terms and Conditions To a great extent, the terms and con- ditions of a manufacturer’s warranty de- pend on what type of equipment is be- ing guaranteed. According to Reich, it’s important to take note of the length of warranty, including when it starts. Is the start date the day of completion of the work, or the day of payment for the work? Second, the warranty should contain a notice provision. Third, it should also contain a clause making clear the exclu- sions that it doesn’t cover – usually things like vandalism or misuse. For example, if your roof isn’t equipped for foot traffic, and residents still use it as a ‘tar-beach’ in the summer, any damage occurring from such use wouldn’t be covered. According to Schickedanz, when it continued on page 12