Do I need a structural warranty?
If anyone will ever borrow against the homes you are building, the answer is almost always yes. Here is when island developers, self-builders and converters need a structural warranty - and when to arrange it.
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- Insurer quotes usually within one working day of your proposal
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- 10 and 12 year cover
- Large and small Island sites welcome
The short answer
In most cases there is no law that says a new home must have a structural warranty. But mortgage lenders, buyers, funders and tenants usually expect one, and a home without it can be hard to sell or refinance. On the islands that is just as true as on the mainland.
The situations below are the ones where a structural warranty is normally needed.
Selling new build homes
Most buyers need a mortgage, and most lenders expect a newly built home to come with a structural warranty from a provider they accept. Without one your buyers may be turned down, and your sales stall.
Getting a mortgage on your own build
If you are building or converting a home for yourself with a self-build or development loan, the lender will usually want a warranty in place, or a professional consultant's certificate, before it releases the final funds or lends on completion.
Converting a building into homes
A barn, office, hotel or chapel converted into homes is treated much like a new build by lenders. The warranty has to cover the existing structure you keep as well as the new work, so providers look closely at the building before they agree terms.
Refinancing or exiting development finance
Development lenders are often repaid by selling or refinancing the finished homes. Without a warranty that exit can be blocked, so many funders make it a condition of the loan.
Apartments sold off plan
Buyers paying deposits before completion want reassurance. Alongside the structural warranty, some providers offer insolvency cover that protects deposits if the developer cannot finish.
Commercial and mixed use schemes
Funders, purchasers and tenants of commercial or mixed use buildings often ask for latent defects insurance so they are not exposed to hidden structural problems.
Timing
When to arrange it: before you start on site
A structural warranty is simplest, quickest and usually cheapest when the development is registered with the provider before work starts. That lets its surveyors inspect the foundations and the structure as they go in, rather than asking you to prove afterwards how they were built.
- Ideally, ask for a quote while the drawings are being finalised
- Register the development before the first spade goes in the ground
- Tell the provider about any change of design, method or programme
- Collect the final certificate for each home as it is completed
Already started or finished?
You may still be able to get cover
If you are already building, some providers will offer a retrospective structural warranty once they have seen evidence of the work done so far. A few will cover a completed property if there are good records of how it was built. Expect more questions and a higher premium - and ask as early as you can.
Do I need a structural warranty? Common questions
Do I need a structural warranty for an extension?
Usually not. Structural warranties are for new homes and conversions that create new homes. An extension to an existing home is normally covered by the builder's own guarantee and building control sign-off.
I am building a house to live in. Do I still need one?
If you are borrowing to build, or might ever sell or remortgage, a warranty is strongly advisable. A future buyer's lender is likely to ask for one during the first 10 years, and it cannot be added easily later.
Is a professional consultant's certificate an alternative?
Some lenders accept a certificate from an architect or surveyor who monitored the build instead of a warranty, but many do not, and it is not insurance. Check with your lender first - we can help you compare the two.
Not sure if you need one? Ask us
Tell us about the project and we will tell you whether a structural warranty is likely to be needed and what the options are.
- Takes under a minute
- Instant reply by email with your reference
- Insurer quotes usually within one working day of your completed proposal
- Guernsey, Alderney, Sark, Jersey and the Isle of Man
- Free and no obligation
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