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Ace’s Home Warranty

Ace’s Home Warranty. May 2008 Legal Presentation. Historical Background. ACE’s Builder’s Warranty established in 1994 when Home Owners Warranty Company (HOW), the nation's largest new home warranty company, went bankrupt Greater Houston Builders Association created ACE’s Builders' Warranty to:

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Ace’s Home Warranty

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  1. Ace’s Home Warranty May 2008 Legal Presentation

  2. Historical Background • ACE’s Builder’s Warranty established in 1994 when Home Owners Warranty Company (HOW), the nation's largest new home warranty company, went bankrupt • Greater Houston Builders Association created ACE’s Builders' Warranty to: • provide Performance Standards • Define builder's warranty obligations to the home buyer, • Establish dispute resolution system • Inform home buyer's of their rights under Texas law

  3. What is the ACE’s Home Warranty? • Express Written Warranty • ACE’s role is administrator • Warranty provided by Builder – not ACE’s • Different from the home protection plans that are often purchased on resales • ACE’s is not responsible for compliance with the warranty by the Builder • ACE’s primary duty is to help resolve disputes between homeowner and builder

  4. What does ACE’s warranty cover? • Year 1 only: • Site work, concrete, slab, masonry, framing, interior finishes & trim, insulation, roof, siding, windows, doors, sealant, gutters, tile, stone, floors, stucco, fences • Years 1 & 2 only: • Plumbing, HVAC, Electrical • Years 1-10: • Major structural failures

  5. Dispute Resolution –ACE’s “Administrative Intervention” • Builder and Owner agree to attend “administrative intervention” meeting and “make every reasonable effort” to resolve dispute • Builder and Owner must submit description of the alleged defects and proposed resolution at least 5 days prior to meeting • ACE’s representative facilitates “administrative intervention” meeting

  6. Next Step: TRCC Inspection and Dispute Resolution Process • Owner and Builder agree that if “administrative intervention” is not successful, they will commence TRCC process • Owner gives Builder the notice required to start the TRCC inspection and dispute resolution process • TRCC inspects and reports • Parties attempt to resolve dispute

  7. Next Step: Mediation • ACE’s facilitates mediation • Mediator chosen from ACE’s list • Costs of mediation shared by the parties Next Step: Binding Arbitration • Dispute submitted to binding arbitration in @ with Construction Industry Arbitration Rules of AAA • Arbitration hearing occurs in the home Waiver of Right to File Lawsuit

  8. Ace’s v. TRCC warranties • TRCC statutory warranty is paramount - Builder agrees to abide by TRCC standards as well as Ace’s • Ace’s warranty does not waive or lessen the Builder’s obligations under TRCC • In certain areas, Ace’s warranty covers more than TRCC warranties • Ace’s warranty is transferable with no transfer fee

  9.    Requirements for Builder to join ACE’s:  • Builder agrees to build in accordance with applicable code • Builder agrees to a minimum of three independent inspections throughout the building process • Builder is encouraged to maintain comprehensive general liability insurance • Builder agrees to abide by a written Code of Ethics • Builder agrees to participate in the ACES Dispute Resolution System

  10. Cost of ACE’s Warranty • If Builder has general liability insurance: • $250 to join • $125 per house • $125 yearly renewal • If Builder does not have general liability insurance: • $275 to join • $150 per house • $125 yearly renewal ACE’S WARRANTY CAN ONLY BE PURCHASED BY BUILDER

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