By Curt Liscum, RRC, RRO
Senior Consultant
Commercial roof warranties – are they fact or fiction, are they good or bad, and more importantly – are they even worth the paper they are printed on? Are commercial roof warranties just “marketing tools” offered by roofing material manufacturers or installing roofing contractors to sell roofing products and roofing projects, or are they an essential part of a roofing project? In a series of installments, this article will discuss various elements of a commercial roof warranty offered for low-slope commercial roofing projects. We will spend most of our time discussing long-term standard warranties offered by roofing material manufacturers, but will also deliberate on short-term installing roofing contractor warranties.
In this, the first installment, we will provide guidance in identifying who the warrantor is, as well as discuss warranty definitions, history, types, and typical coverage. In the second installment, we will discuss typical warranty exclusions/limitations, remedies, addenda/riders, building owner responsibilities, and warranty durations and forms. In the third and final installment, we will discuss warranty transfers, the relationship between the roof material manufacturer/authorized contractor, typical installing contractor warranties, warranty fees, and a warranty strategy for building owners.
All commercial roof warranties available from various roofing material manufacturers are different. They may have similar coverage, terms, limitations and exclusions, but it is imperative that you read a specimen copy very closely and understand the coverage, limits of liability, list of exclusions, and the owner’s responsibilities. Warranties can provide limited assurances to the owner indicating the roof will perform as intended and can be an integral part of the building risk management plan, but are of most value if you understand the true benefits and limitations of the documents.
A commercial roof warranty is a contractual relationship between the warrantor and building owner and therefore, like any contract, the terms and conditions of the contract can be subject to negotiation. Warrantors may “easily” negotiate some terms (like legal jurisdiction), but other terms (like hail damage coverage) may come at a considerable cost or require changes in the roof’s construction. Some terms may not be open for negotiation. Like any business relationship, the better the relationship, the better chance you have for discussions regarding changes to the roofing material manufacturer’s standard warranty.
DEFINITIONS
To make sure we are all on the same page, we will define some of the terms used in conjunction with commercial roof warranties.
- Commercial Roof Warranty – contractual relationship between a roofing material manufacturer or installing roofing contractor and property owner. This type of warranty guarantees the roof will perform according to the defined specifications for the stated period of time, and also defines remedies if the roof doesn’t perform.
- Warrantor/Warranty Holder – entity that is promising the remedy as defined in the commercial roof warranty. This could be a roofing material manufacturer or the installing roofing contractor.
- Building Owner – legally defined owner of the building at the time of roof installation.
- Installing Contractor – licensed roofing contractor, authorized by the roofing material manufacturer, who installed the roof covered by the commercial roof warranty.
- Completion Date/Warranty Start Date – starting date of the commercial roof warranty; usually the date of acceptance by the roofing material manufacturer, but could be the date of substantial completion or project acceptance date if part of a new construction project.
- Form of Warranty – defines coverage, terms, limitation and remedies of the agreement.
- Warranty Term/Duration – period of time the warrantor promises remedies to covered claims.
WARRANTY HISTORY
Commercial roof warranties have not always been as we know them today. When I first started in this industry in the mid 1970’s, most commercial buildings had aggregate-surfaced, multi-ply, asphalt built-up roofs. Completed roofing projects did not come with commercial roof warranties, but instead were backed by bonds. These bonds were much more limited and backed by insurance or surety companies, and not roofing material manufacturers. Many building owners incorrectly believed the roof bond was a warranty, but instead, it was a promise by the surety to cover the cost of specified remedies up to a fixed amount of the bond. If the required roof repairs exceeded the value of the bond, building owners were left to make up the difference. This led to a feeling of distrust in both roofing contractors and material manufacturers.
Although up for a bit of debate, today’s commercial roof warranties seem to have originated with the introduction of single-ply roofing membranes in the late 1970’s. Some single-ply products were introduced in the 1960’s, but they really took off because of the oil embargo in the early 1970’s. Almost immediately, the petroleum-related materials needed to make built-up roofs became scarce and expensive, and the quality of aggregate-surfaced multi-ply asphalt built-up roofs plummeted.
The new synthetic single-ply roofing market quickly became a hot commodity. The problem; however, was that this new single-ply membrane was radical, new, and unproven. Single-ply membrane roof systems had no performance history to make building owners feel confident they would last. Single-ply roofing material manufacturers needed to assure building owners that this new product would provide the performance promised. Thus, the modern commercial roof warranty was born. Most roof warranties started with 10-year terms. As single-ply membrane roofs became more common and trusted through the 1980’s, coverage periods were extended to 15 years, and then finally to today’s standard 20-year warranty (with some material manufacturers offering 20+ year warranties).
WARRANTY TYPES
There are two types of warranties in the commercial low-sloped roofing business, expressed and implied. The commercial roof warranty is an example of an expressed warranty, it expressly defines the extent of responsibility and the limits of liability of the warrantor. It is a written contract between the warrantor and building owner. An expressed warranty not only defines what the warrantor will or will not do in the case of a claim, but also what the building owner is required to do to keep the warranty intact.
Implied warranties are defined by the Uniform Commercial Code (UCC). According to the UCC, for every manufactured product brought to market, the manufacturer implies that the product is fit for its intended use. If a manufacturer produces roofing materials, the implied warranty under the UCC states that the materials will be serviceable as a roof and will keep the building dry if installed as instructed by the manufacturer on a building that is suitable for the roof installation. The roofing manufacturer has implied that its roof system will function as a roof if designed and installed correctly. An expressed warranty may attempt to negate the UCC by stating that the written warranty supersedes any other warranty, “written or implied.” Restoration from an implied warranty would most likely require legal or court action because it generally involves interpretation of a statement or marketing brochure.
WARRANTORS
In the case of a commercial roof warranty there are two different entities that may provide a warranty; the roofing material manufacturer and the installing roofing contractor. The roofing material manufacturer’s warranty is the expressed warranty discussed and may have warranty terms from 5 to 20+ years, with the most common terms of 10 or 20 years.
The installing roofing contractor’s warranty is generally short-term (2 to 5 years) in duration and will generally only repair the roof to make it watertight if the causing problems are associated with the contractor’s installation workmanship.
COVERAGE
Most commercial roof warranties provide remedies for watertightness, provided the cause of the leak is a covered event. Warranties do not stop or protect against leaks. Warranties are reactive in remedy and not a replacement for a proactive preventive maintenance program (that we will discuss in a latter installment). Commercial roof warranties do not cover any consequential damages to other building components or contents of the building, nor do they provide any coverage for lost time or production resulting from a leak. Warranties generally do not cover color or aesthetic concerns and do not cover defects that do not cause roof leaks (for example blisters).
Most standard commercial roof warranties only cover products sold or authorized by the roofing material manufacturer, and in most cases, only cover the roof and flashing membrane and products listed on the warranty. Therefore, unless added by an addendum or rider (that we will discuss in a latter installment), warranties generally do not include insulation, cover boards, vapor barriers, or other non-membrane components.
Generally speaking, commercial roof warranties cover leaks that develop due to a workmanship or product defect, provided that the roof is installed by a roofing material manufacturer’s authorized contractor.
Most commercial roof warranties are enforced once a signed original of the document is delivered to the owner. A few roofing material manufacturers require the building owner to acknowledge receipt and return a signed copy to the manufacturer within a specified time period (generally three months). Most warranties are not active until all costs of roof installation, both installing contractor labor and materials, have been paid.
In the next installment, we will discuss typical warranty exclusions/limitations, remedies, addenda/riders, building owner responsibilities, and warranty durations and forms.