For a multi-unit, two or three-year production housing project the builder should consider budgeting a contingency dollar amount for the one-year warranty period between the builder and the homebuyers, for the converted sales models and the empty inventory units that are sold and occupied long past the completion of the construction.
After two or three years, some subcontractors might be out of business and not available for customer service repairs. Some repair items might be due to the wear and tear from the age of the units sitting empty which would not come under the subcontractor’s or manufacturer’s warranty.
The issues of what is warrantied between the builder and the buyer of sales models, and the length of time the subcontractors are responsible for warranty repair work, needs to be addressed contractually for units that may be sold beyond the standard 12-month warranty period at the close of the construction, for example.
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