Legal Spotlight

  
NASBP Short Article on Impact of Long-Term Warranty Requirements

In a recent construction industry trend, some owners are imposing long-term contractual warranties on contractors. As we know, such long-term warranty requirements pose problems for contractors and sureties, restricting the bidder/proposer pool, diminishing competition, and likely increasing the cost of the project. Often the owners and their representatives do not understand these negative impacts caused by imposition of the long-term warranties.

The past several years, at the request of its membership, NASBP has written several dozen comment letters to public and private owners, providing background and impact assessments of imposing long-term warranty requirements on contractors and their sureties. While we are very pleased to write such comment letters when requested to do so by NASBP members, I thought it might be useful for the NASBP membership to have a short, generic white paper on the negative impact to owners of long-term contractor warranties, for use when they need something really quickly. Therefore, I have drafted a mini-white paper on the topic for membership to access when time is of the essence. It could also be used as a hand-out during presentations to and during meetings with owners and their representatives.

In the last, September/October, issue of Pipeline, I provided a short white paper, “Resident Agent Countersignature Laws Have Been Eradicated and Violate the Law in Every U.S. State,” for the use of NASBP membership. This document seemed to strike a chord, as I received many positive comments about the paper from NASBP members. I hope that you will find this new article informative and useful, too.

Access the NASBP white paper on the Impact of Long-Term Warranty Requirements from nasbp.org.

The author of this article is Martha Perkins, General Counsel at NASBP. Martha Perkins can be reached at mperkins@nasbp.org or 202.686.3700.

This article is provided to NASBP members, affiliates, and associates solely for educational and informational purposes. It is not to be considered the rendering of legal advice in specific cases or to create a lawyer-client relationship. Readers are responsible for obtaining legal advice from their own counsels, and should not act upon any information contained in this article without such advice.