All posts for December 2011

After many challenging and enjoyable years working within the roofing business I find myself discussing the subject of 'warranty' more and more. Never has this word been more poignant in our day-to-day discussions, or for investors' pockets.

Gone are the days when we used to supply mainly carbon steel fixings, maybe with a SELA head. Rarely was life expectancy asked about, "10 years will do" was the norm, and we shipped millions without question. Post recession things have changed, 25 years plus is now very typical for a building's design and "costing" life, and for this, a warranted product is essential.

There is no doubt that this has been driven by the increasingly onerous Building Regulations and the concerns of the building owner and/or landlord whose asset value, and/or rental value, is closely tied to regulation compliance. Too many have paid high prices for a poorly performing building; lessons sadly are still being learnt. The investor and developer are increasingly looking for assurance that the structure will perform within Building Regulations and at least achieve its investment and cost plan throughout its lifetime. Therefore, it is increasingly vital that the products being installed combine to facilitate Part L criteria such as reduced air leakage, and be able to stand the test of time and perform structurally and aesthetically for the full 25 years investment period.

It is then no surprise that the demand for a genuine performance warranty from contractors is drastically on the increase and will influence tender acceptance. This is becoming a part of the pre qualification process. While some contractors may be happy to offer any warranty in order to gain advantage, street wise developers will probe to ensure that the warranty is valid and securely backed, not just a simple headline.

So, what can the responsible contractor do? My advice is to seek detailed equivalent warranties from the manufacturers; the devil is in the detail, we all know this! Taking just a few minutes to go over a short check list will minimise potential liabilities for the solid and successful contracting business.

• Is the product and warranty supplied by a manufacturer or a re seller?
• Check who is really manufacturing your purchase and to what quality standards and warranty term? 
• A number of re sellers "manufacture" a very limited range in the UK and source the bulk of their products from lower cost sources around the globe. Dig deep and check the paper warranty from a UK manufacturer really covers product that is out sourced. 
• Which business is responsible for the warranty liability?
• What is the "full" warranty term? Is it decreasing liability?
• Does the issuing business really have the financial strength to support the warranty? If not is it really worthless?
• Are there limitations in the event the warranty is invoked? E.G. claims are limited to the value of product supplied on the project. Claims are limited to the free issue of replacement fasteners or sealant only. There is some sort of excess due by the contractor?
• Are consequential costs covered in any way?
• Beware insurance backed warranties, this is a minefield, most companies fall back on product liability insurance, very, very few have specific insurance for a warranty and those that really do have cover for a max of 10 year periods.

I appreciate that small components such as fasteners are often seen as an insignificant part of the total value of the materials purchased, yet I cannot reiterate enough the essential role they play in sustaining the building's long term integrity.

It remains bewildering therefore, given the lesser value of these components, that contractors significantly increase their total risk in order to save only a few pence short term. The pursuit of profit for further investment in any business is an obvious driver, but one that must be balanced with common sense risk management decisions. Investors are trying to find ways to minimise their risk and building component warranties are a tool here to stay.

So even when times are tight and contracts are fiercely contested, we all need to think carefully about critical product specification compromise. Developers and management contractors will be scrutinising contracts and tenders ever more carefully, looking for unacceptable corner cutting; that competitive edge you think you hope to get may cost you much more than you save.

Have you had any similar experiences with warranties or building failures? It would be great to hear feedback on the challenges others face when matching Building Regulation criteria and cost so please share your thoughts below.