A simple guide to Structural Warranties for home owners and property developers

What is a Structural Warranty?

A structural warranty is a type of insurance policy that protects homeowners and property developers from financial losses due to structural defects in newly built or renovated properties. These defects can affect foundations, walls, roofs, and other load-bearing elements, potentially compromising the safety and integrity of the building.

Typically, structural warranties provide coverage for 10 to 12 years from the date of project completion, offering long-term protection against costly repairs.

Why are Structural Warranties essential?

Structural warranties are essential for financial protection, risk management, and property marketability. Here’s why:

1. Financial protection against costly pepairs

Without a structural warranty, any defects in the building’s structure would be the homeowner’s or developer’s responsibility to fix—often at significant expense. Structural issues can arise from unseen problems such as faulty foundations, subsidence, poor workmanship, or design flaws, leading to repair costs that can reach tens or even hundreds of thousands of pounds.

2. Essential for selling or mortgaging the property

Many mortgage lenders and banks require a structural warranty as a condition for approving a loan on a newly built or converted property. Without one, buyers may struggle to secure a mortgage, limiting the resale potential of the property.

3. Protection against builder insolvency

If a structural defect appears after construction and the developer or builder is no longer in business, homeowners may struggle to get the issue fixed. A structural warranty ensures the insurance company covers the costs, offering peace of mind and financial security.

4. Increased buyer confidence & property value

For developers, offering a structural warranty enhances the attractiveness of a property, as it reassures buyers that they won’t be liable for expensive structural repairs. This can lead to a quicker sale and a potentially higher selling price.

The consequences of not having a structural warranty

Choosing not to secure a structural warranty can result in serious financial and legal risks, including:

• Uninsured repair costs – Any structural defects found after construction must be fixed at your own expense.

• Difficulty selling the property – Many buyers will avoid purchasing a property without a warranty, and mortgage lenders may refuse to finance it.

• Legal battles & compensation issues – Without a warranty, you may have to take legal action against the builder or contractor for negligence—a costly and time-consuming process with no guarantee of success.

• Potential loss of investment – If defects significantly impact the property’s structure, the entire investment could be at risk, leading to major financial losses.

The benefits of having a Structural Warranty

Having a structural warranty provides numerous benefits for both developers and homeowners:

✅ Financial security – Covers the cost of repairs for structural defects, preventing unexpected expenses.

✅ Marketability – Enhances the value and saleability of the property, making it more attractive to buyers.

✅ Lender & mortgage approval – Many banks and mortgage providers require a structural warranty before lending.

✅ Peace of Mind – Protects against unforeseen structural issues and builder insolvency.

✅ Long-term protection – Lasts 10 to 12 years, offering coverage well beyond the initial construction phase.

What Does a Structural Warranty Cover?

A structural warranty typically covers:

• Structural elements – Foundations, load-bearing walls, roofs, and floors.

• Water ingress – Protection against waterproofing failures (subject to policy terms).

• Defective workmanship – Issues caused by poor construction quality.

• Insurance against builder insolvency – Ensuring defects are fixed even if the developer goes out of business.

What’s not covered?

• General wear and tear.

• Damage caused by natural disasters (e.g., floods, earthquakes).

• Defects resulting from homeowner modifications.

When should you get a Structural Warranty?

It’s best to secure a warranty before construction begins. There are three main stages at which you can obtain one:

1️⃣ Before construction starts – The most cost-effective option, allowing insurers to assess and approve plans.

2️⃣ During construction – Possible but often comes with higher costs due to limited early-stage inspections.

3️⃣ After completion (Retrospective Warranty) – The most expensive option, requiring extensive assessments before approval.

Structural Warranty vs. Professional Consultants Certificate (PCC)

Some developers opt for a Professional Consultants Certificate (PCC) instead of a structural warranty. However, this is not the same level of protection.

While PCCs are cheaper (around 40% less expensive than a warranty), they offer less protection. If the consultant’s insurance lapses or they go out of business, homeowners may have no recourse to claim for defects.

Final thoughts: Why you should get a Structural Warranty

For both property developers and homeowners, a structural warranty is an essential safeguard that protects against financial loss, ensures marketability, and provides peace of mind.

Without a structural warranty, you risk unexpected repair costs, difficulty selling the property, and potential legal battles—all of which could have been easily avoided.

By securing a structural warranty before construction begins, you can reduce financial risk, increase property value, and ensure long-term protection for your investment.

📌 Thinking of developing a property? Make sure you’re covered—don’t take unnecessary risks! Ask Certibuild for a free quote.