McKee Homes. Dear Valued Homeowner,

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1 Dear Valued Homeowner, First, we would again like to thank you for purchasing a McKee home. Your home was built with quality craftsmanship and meticulous attention to detail, and we are sure you are enjoying it. We are proud to introduce the McKee Homes Homeowner s Warranty Manual. We put this manual together with you, the homeowner, in mind. We have included information to help with preventative maintenance, which is key to long- term, trouble- free homes. We have also included our customer care and emergency after hours phone numbers. Like any warranty, this one specifies limits for responsibility and conditions under which it is valid or applicable. This warranty is the only warranty, express or implied, that McKee Homes makes to you. No employee, representative or agent of McKee Homes is authorized to make any warranty except as herein contained. Any questions you may have concerning the McKee Homes Warranty, homeowner maintenance requirements, customer service procedures or emergency repair information should be answered in this manual. Thank you for choosing McKee Homes. Warmest Regards, McKee Homes 120 Nandina Ct. Fayetteville, NC Ph: Fx:

2 WARRANTY STANDARD OPERATING PROCEDURES (SOP) Introduction: Thank you for purchasing a McKee home. Our Warranty Department is here to assist you and coordinate the correction of warrantable items that arise during your first year of home ownership. A copy of that warranty is provided in this section of your manual, and we highly encourage you to read through it thoroughly prior to submitting any requests for warranty service. This will help you understand the difference between homeowner maintenance and a legitimate warranty claim which will minimize misunderstandings. Our goal is for all of our homeowners to be completely satisfied with their McKee home. In order for that to happen we have defined the warranty guidelines and the process that must take place in order to address warrantable issues. Homeowners should also have a thorough understanding in the difference between defects, which are warrantable, and maintenance items which are the responsibility of the homeowner. In order for this SOP to be easily followed we must first distinguish between the three different types of service requests that new homeowners may encounter in their first year. They are and will be explained in the following order: Emergency Warranty Requests Non-Emergency Warranty Requests 11 Month Anniversary List Frequently Discussed Items that are Homeowner Maintenance 120 Nandina Ct., Fayetteville, NC Office (910) Fax (910) warranty@mckeehomesnc.com Date of Publication Distribution August 1, 2013

3 Emergency Warranty Requests If an emergency arises, please call one of the numbers listed below. Please leave a message with your name, phone number, address and subdivision along with a description of your emergency. In addition to contacting the McKee Homes Customer Care Department you should also call the necessary approved contractor directly. The phone numbers for these contractors are listed in your List of Trades sheet you received at the final walk you performed before you closed on your home. It is located in section 4 of your Homeowner Manual. Customer Care Department (9 am 5 pm, M-F) (910) ext. 3 Customer Care Department (after hours) (910) ext. 717 The following list of potential situations would be considered a need for emergency warranty service: (Please Note: these are common examples and do not include all possible emergencies) Gas Leak Do not use your phone! Leave your home immediately, and call your HVAC contractor from outside of the home. If the HVAC contractor cannot resolve the issue, please call your gas service provider. Air Conditioning & Heat Total loss of heat or air conditioning Electricity Total loss of electricity or loss of power to all major appliances. Please call your electric service provider to make sure power has not failed in your area. (Only the power company can provide a temp power connection if the feed to your home goes out.) Check the circuit breaker at the electrical panel to see if it has tripped. Plumbing 1. A leak that required the entire water supply to be turned off, or total loss of water. In the case of total loss of water, check your valve at the meter box, and check the gate valve where the water enters your home. (This is most commonly located at the front of the home on either side. Please call our Water Service Provider to make sure service has not been temporarily interrupted in your area. 2. A complete plumbing stoppage or waste like leak. Call the plumber immediately. Call your water service provider, if it is a water line leak. Roof Leak Although a rook leaf is considered an emergency, we will not be able to send a contractor until the rain subsides. Exterior Door Exterior doors will not be locked or close affecting safety. 120 Nandina Ct., Fayetteville, NC Office (910) Fax (910) warranty@mckeehomesnc.com Date of Publication Distribution August 1, 2013

4 Non-Emergency Warranty Requests If a non-emergency warranty service request arises which affects the habitability of your home, it should be reported to the Customer Care Department through your online warranty account. All requests for non-emergency warranty service MUST be submitted through your online warranty account. We use a written system to track and document homeowner inquiries which will ensure a timely response and completion. This process supports our follow up on the commitments we make. The following situations would be considered a need for non-emergency warranties that affect habitability (to be repaired before your 11 month anniversary): 1. Light will not work. Please check your circuit breaker at the electrical panel to see if it has tripped. 2. Electrical outlets will not work. Please check your circuit breaker at the electrical box to see if your GCFI breaker has not tripped. 3. Interior doors will not close. 4. Major Appliance malfunctions. Please check your circuit breaker at the electrical panel to see if it has tripped. Contact Sears for all appliance repairs at or to schedule a qualified repair technician to service the appliance. 120 Nandina Ct., Fayetteville, NC Office (910) Fax (910) warranty@mckeehomesnc.com Date of Publication Distribution August 1, 2013

5 Frequently Discussed Items that are Homeowner Maintenance 1. Caulking that has cracked all caulking will crack over time and is an expected behavior. It is the homeowner s responsibility to maintain the caulking around the home s interior and exterior. See page 9 section 5F of your homeowner warranty manual. 2. Cracked concrete cracks in sidewalk, driveways, and patios are normal and do not impact the function of the concrete. See pages 3-4 sections 2A and 2B of your homeowner warranty manual. 3. Sheet rock cracks are normal and occur due to the movement of the wood which has moisture gain and loss. See page 12 section 7 of your homeowner warranty manual. 4. Paint your home has been provided with a paint touch-up kit; just perfect for those minor move in nicks, scratches and other cosmetic areas. See pages section 7G of your homeowner warranty manual. 5. Stone cracks, chips and mortar cracks are normal in all Stone. See page 5 section 3A of your homeowner warranty manual. 6. Vinyl flooring vinyl flooring is a soft product and can easily be damaged. Please protect the flooring from chair legs, high heels, etc. See pages section 7C of your homeowner warranty manual. 7. Drainage your home site was graded to ensure conformity with the drainage plans of the developer and city. It is the homeowner s responsibility to maintain the drainage once established. See page 2 section 1B of your homeowner warranty manual. 8. Smoke detectors the smoke detectors in your home perform a function called a nuisance alarm. This is a random chirping that occurs for several reasons. The batteries may need to be replaced or the system may need to be reset. Make sure you have eliminated those two possibilities before contacting the customer care department. 9. Windows condensation on windows when the temperature of the frame and glass drops below the dew point temperature as it relates to the humidity of your home. This can occur when the outside temperature is much colder than the inside temperature. Such condensation does not indicate a faulty window. See page 11 section 6F of your homeowner warranty manual. 10. Hardwood floors Separations and seasonal cupping are normal due to changes of humidity in the home and will not impact the function of the floor. See page 14 section 7D of your homeowner warranty manual. The expected performance or behavior of certain materials is not considered warranty repair items. 120 Nandina Ct., Fayetteville, NC Office (910) Fax (910) warranty@mckeehomesnc.com Date of Publication Distribution August 1, 2013

6 Warranty Manual McKee Homes 120 Nandina Ct. Fayetteville, NC (910)

7 Table of contents 1. Site Work 2 2. Concrete 3 3. Masonry 5 4. Wood And Plastics 5 5. Thermal And Moisture Protection 8 6. Doors And Windows Gypsum Wallboard/Sheetrock Specialties Cabinets Mechanical Electrical Manufacturer s Warranties Exclusions Claims Procedures Builder s Performance Arbitration 25

8 One Year Coverage 1. Site Work 1A. Excavating and Back- filling Settling of ground around foundation, utility trenches or other filled areas. Settling of ground utility trenches or other filled areas, maximum allowable 3 inches. Settling of backfill around foundation shall not interfere with water drainage away from the house. Upon request by the Owner, the Builder shall fill excessively settled areas one time only during the first year warranty. The Owner shall be responsible for any grass, shrubs, or other landscaping affected by placement of such fill. 1B. Site Drainage: Improper drainage of the site. The necessary grades and swales should be established to insure proper discharge away from the house. Site drainage is limited to the immediate grades and swales affecting the structure. No standing ponding of water should remain in this immediate area 24 hours after a rain, except swales which may drain longer than other areas after a rain, or sump pump discharge. No grading determination shall be made while the frost or snow is on the ground or the ground is saturated. The builder is responsible only for establishing the proper grades and swales. The owner is responsible for maintaining such grades and swales once they have been properly established by the Builder. 1C. Crawl Spaces Water in crawl space. Crawl spaces should be graded and drained properly to prevent water from accumulating in the crawl space area. The builder is responsible for providing proper grading and drainage of crawl space areas. 2

9 2. CONCRETE 2A. Expansion and Contraction Joints Separation or settling of concrete slabs within the structure or at expansion or contraction joints. Concrete slabs within the structure are designed to move and settle at expansion and contraction joints. Movements caused by expansion and contraction may cause cracks and voids to appear in the slab. Minor cracks in concrete floors are normal. Cracks exceeding 1/4- inch width or 1/4 inch in relative vertical displacement are considered excessive. It is the Builder s discretion to take whatever corrective action is necessary to repair cracks and voids. If cracking and movement are within construction standards then no correction is necessary. 2B. Cast- In- Place Concrete (Non- Structural) Basement or foundation wall cracks. Non- structural cracks are not unusual in concrete foundation walls. Such cracks greater than 1/8 inch are considered excessive. The Builder shall repair non- structural cracks in excess of 1/4 inch. Surface patching is acceptable for non- structural cracks. Uneven concrete floors. Concrete floors in basements or rooms designed for habitability should not have pits, depressions or areas of unevenness that would prevent its use as a finished sub- floor or exceeding 1/4 slope in 32. The floor slope, unless designed for specific drainage purposes, shall not exceed 1/240 of the room width. Structural slab foundation systems that have experienced some movement but are within the foundation's design performance criteria are excluded from this standard. Builder to correct or repair to meet the above standard. Pitting, Scaling or spalling of non- excluded concrete work, and attached porch/patio concrete work supported by foundation system. 3

10 Concrete surfaced should not disintegrate to the extent that the aggregate is exposed under normal conditions of weathering and use. Builder to take whatever corrective action is necessary to repair or replace defective concrete surfaces. The Builder is not responsible for deterioration caused by salt, chemicals, mechanical implements and other factors beyond the Builder s control. Cracking of basement floor. Minor cracks in concrete basement floors are normal. Cracks exceeding 3/16- inch width or 3/16 inch vertical displacement are considered excessive. Builder to take whatever corrective action is necessary to repair or replace defective concrete surfaces. The Builder is not responsible for deterioration caused by salt, chemicals, mechanical implements and other factors beyond the Builder s control. The Builder shall repair cracks as necessary so as not to be readily apparent when the finished flooring material is in place. Cracking of attached garage slab. Cracks in garage slabs in excess of 1/4 inch in width or 1/4 inch in vertical displacement are considered excessive and unacceptable (see expansion joints). The Builder shall take whatever corrective action is necessary to repave or refinish defective areas. Cracking, settling, heaving or separation of structurally attached stoops or steps. Stoops or steps should not settle, heave, or separate in excess of 1 inch in relation to the house structure. No cracks except hairline cracks (no more than 1/4 inch wide) are acceptable in structurally attached concrete stoops. Builder shall take whatever corrective action is required to meet acceptable standards. Cracks in structurally attached patios with footing or foundation systems. Cracks in excess of 1/4 inch in vertical displacement are considered excessive and unacceptable in structurally attached patios. Builder to repair as required. 4

11 Cracks in concrete slab- on- grade finished floors other than basement. Cracks, which significantly impair the performance of the finish flooring material, shall not be acceptable. The Builder shall repair cracks as necessary so as not to be readily apparent when the finished flooring material is in place. 3. MASONRY/STONE 3A. Unit Masonry (Non- Structural) Basement or foundation wall crack. Small non- structural cracks are not unusual in mortar joints of masonry foundation walls. Such cracks greater than 1/4 inch in width are considered excessive. The Builder shall repair non- structural cracks in excess of 1/4 inch by pointing or patching. These repairs should be made toward the end of the first year of the warranty period. Cracks in masonry walls or veneer. Small cracks are common in mortar joints of masonry construction. Cracks greater that 1/4- inch in width are considered excessive. Repair cracks in excess of 1/4 inch by pointing or patching. These repairs should be made toward the end of the first year of the warranty period to permit normal settling for the home to stabilize. 4. WOOD AND PLASTICS 4A. Rough Carpentry Floor squeaks or sub- floor appears loose. Floor squeaks and loose sub- flooring are often temporary conditions common to new home construction. Builder should locate and make every reasonable effort to correct the problem. Uneven wood floors. Floors should not be more than 1/4 inch out of level within any 32 inch horizontal measurement when measured parallel to the floor joists. Floor slope within any room 5

12 shall not exceed 1/240 of the room width. Allowable floor shall not exceed 1/240 of the room width. Allowable floor and ceiling joist deflections are governed by the approved building code. Builder to repair to meet the above standard. Bowed walls. All interior and exterior walls have slight variances on their finished surfaces. Bowing of walls should not detract from or blemish the finished surface of the walls. Allowable structural deflections are governed by the approved building code specifications, however, bowing greater than 1/240 of the wall length will be considered unacceptable. Repair interior and exterior walls as required. Out of plumb walls. Walls should not be more than 1 inch out of plumb for any 8- foot vertical measurement. Builder to repair to meet the above standard. 4B. Finish Carpentry Interior Quality of interior trim workmanship. Joints in moldings or joints between moldings and adjacent surfaces should not result in joints exceeding 1/8 inch in width at time of final walkthrough. Repair defective joints as defined above. Caulking is acceptable. Bi- fold doors come off tracks during normal operation. Doors should not come off the track during normal operation. Builder will assess if the doors coming off the track are a result of normal operation. If it is, Builder shall repair / adjust door so that it performs properly. Pocket doors rub. Pocket doors shall not rub in their pockets during normal operation. Builder will repair the pocket door to meet construction standard as necessary one time within the first year warranty. 6

13 4C. Finish Carpentry Quality of exterior trim workmanship. Joints between exterior trim elements, with the exception of natural wood siding should not result in joints exceeding 3/8 inch. In all cases the exterior trim, masonry and siding shall be capable of performing its function to exclude the elements. Builder to repair open joints. Caulking is acceptable. Exterior trim boards are split. Splits wider than 1/8 inch are unacceptable. Builder will repair splits by filling with permanent filler. Exterior trim boards are bowed or twisted. Bows and twists exceeding 5/16 inch in 8 feet are unacceptable. The builder will repair defects exceeding the performance standard by refastening or replacing deformed boards. 4D. Wood Treatment Delaminating or deterioration of exterior siding. Siding should not delaminate or deteriorate within manufacturer s specifications. Natural wood siding can be expected to weather and change color as a result of natural aging. The builder will repair or replace siding as needed unless the situation was caused by owner s neglect to maintain siding properly. Repairs of prefinished material may not match in color and/or texture. The Owner can expect the newly painted surface to not match the original surface in color. Siding is bowed. Bows exceeding 1/4 inch in 16 inches are unacceptable. The Builder will replace any wood lap siding with bows exceeding the performance standard and finish replacement siding to match the existing siding as closely as practical. Siding and gaps are visible. End gaps wider than 1/8 inch are unacceptable. 7

14 The Builder will repair end gaps that do not meet the performance standard by providing joint covers or by caulking the gap(s). If the siding is painted, the Builder will paint the new caulking to match the siding as closely as practical. 4E. Wood shake siding Cedar shakes or shingles have bled through paint or stain applied by Builder. Resins and extractives bleeding through point or stain, or blackening of shakes or shingles are unacceptable since bleeding can be controlled by treatment with primers or water repellent sealers. This performance does not apply if natural weathering is specified for the job. One time during the warranty period the Builder will clean and treat shakes to provide a reasonable appearance and prevent further bleeding. Siding has delaminated. Siding shall not delaminate. The Builder will replace delaminated siding unless the owner s actions or negligence caused the delaminating. The repair area may not precisely match the original siding. Joints between siding have separated. Joint separations exceeding 1/8 inch are unacceptable. Some waviness in siding is to be expected, however, proper nailing of siding will straighten most bows. The Builder will caulk or repair as necessary to fill the joint. The repaired area may not match the original siding precisely. 5. Thermal and Moisture Protection 5A. Waterproofing Basement leaks. Leaks resulting in actual trickling of water are unacceptable. However, leaks caused by improperly installed landscaping by Owner, or failure to maintain proper grades that have been established by the builder, are not covered by the warranty. Dampness of the walls 8

15 may occur in new construction and is not considered a deficiency. The Builder shall take such action as necessary to correct basement leaks except where the cause is determined to result from Owner negligence. 5B. Insulation Insufficient insulation. Insulation should be installed in accordance with applicable energy and building code requirements. Install insulation in sufficient amounts to meet standards. 5C. Shingles and Roofing Tiles Construction Standards: Leaks due to snow or rain being driven into the attic through vents or louvers. During prolonged cold spells, ice build- ups are likely to occur at the eaves of a roof. This condition occurs when snow and ice accumulate and gutters/downspouts freeze up. This is an Owner maintenance item unless the roof design is found to be improper for the weather conditions associated with the area. Roof or flashing leaks. Roof or flashing should not leak under normally anticipated conditions, except where cause is determined to result from severe weather conditions such as ice build- up. Builder shall re- secure, caulk, repair or replace to meet the above standard. 5D. Flat Build- up Roofing Standing water on flat built- up roof. Water should drain from flat built- up roof. The Builder shall take corrective action to assure proper drainage. 5E. Flashing and Sheet Metal Flashing, valleys, gutters and/or downspout leaks. 9

16 Flashing valleys, gutters and downspouts must not leak but gutters may overflow during heavy rain. It shall be the Owner s responsibility to keep gutters and downspouts free of leaves and debris which could cause excessive overflow. Repair leaks. Water stands in gutters. When gutter is unobstructed by debris, the water level may not exceed one (1) inch. Industry practice is to install gutters approximately level without pitch. Consequently, it is entirely possible that small amounts of water will stand in certain sections of gutter immediately after a rain. 5F. Sealant Leaks in exterior wall due to inadequate caulking. Joints and cracks in exterior wall surfaces and around openings should be properly caulked to exclude the entry of water. Properly installed caulking will shrink and must be maintained by the Owner during the life of the home. Prior to closing, Builder shall repair and/or caulk joints or cracks in exterior wall surfaces as required to correct deficiency. 6. Doors and Windows 6A. Wood and Plastic Doors Warping of exterior doors. Exterior wood doors will warp to some degree due to the temperature differential on the inside and outside faces. However, they should not warp to the extent that they become inoperable or cease to be weather resistant or exceed National Woodwork Manufacturer s Association Standards (1/4 inch). Correct or replace and refinish defective doors to match existing doors as nearly as possible. Shrinkage of insert panels showing raw wood edges. Panels will shrink and expand, and may expose unpainted surface. None 10

17 Split panels. Split panels should not allow light to be visible or allow the weather to get through the door. If light is visible or the weather is getting through the door, Builder will fill split to match paint or stain as closely as possible, prior to closing. Exterior door will not shut completely. Exterior doors shall shut completely. The Builder will adjust the door to meet the Construction Standard. 6B. Garage Doors on Attached Garage Garage door fails to operate properly. Garage door should operate properly. The Builder shall correct or adjust garage doors as required, except where the cause is determined to result from the Owner installing an electric door opener. Garage door allows entrance of snow or water. Garage door should seal properly under normal conditions. Some entrance of the elements can be expected under abnormal conditions. Builder shall adjust or correct garage doors to meet normal conditions. 6C. Vinyl Windows Malfunction of windows. Windows should operate with reasonable ease (See 6G) and as they are designed. Builder to correct or repair as required. 6D. Wood Windows Refer to 6C. 6E. Weather- Stripping and Seals Infiltration around doors and windows. Some infiltration is normal around doors and windows, especially during high winds. Poorly fitted weather 11

18 stripping is not permissible. It may be necessary for the Owner to have storm windows/doors installed to provide a satisfactory solution in high wind areas. The Builder shall adjust to correct openings and cracks, poorly fitted doors or windows, or poorly fitted weather stripping. 6F. Windows and Skylights Leaking and condensation on windows and skylights. Windows and skylights shall not leak. Builder will correct leaks from outside of structure within the guidelines as indicated on 5C, however, Builder will not be responsible for condensation or dripping from skylights. 6G. Windows Windows are difficult to open or close. Windows shall operate with reasonable ease. Residential aluminum, double and single hung vertical - sliding windows shall require a maximum operating force of 25 pounds. The Builder will correct or repair as required to meet the Construction Standard as necessary one time within the first year warranty. Window glass is broken None. Broken glass not reported to the Builder prior to the acceptance of the job is the owner s responsibility. 7. Gypsum Wallboard/Sheetrock Defects caused by poor workmanship such as blisters in tape, excess compound in joints, cracked corner beads, or trowel marks. Slight imperfections such as nail pops, seam lines and cracks are common in plaster and gypsum wallboard installation and will not be addressed by the builder. However, obvious defects and poor workmanship resulting in blisters in tape or excess compound in joints, trowel marks and cracked beads are not acceptable. 12

19 Builder to correct such defects to acceptable tolerance and repaint repaired areas provided the cosmetic concerns are noted prior to closing. Builder is not responsible for color and/or texture variations in the paint. Cracks are visible on finished walls or ceilings. Cracks shall not exceed 1/8 inch in width. The Builder will repair cracks exceeding 1/8 inch in width only once during the warranty period. The builder will repaint repaired areas. A perfect match between original and new paint cannot be expected, and the builder is not required to paint an entire wall or room. Nail pops, blisters, or other blemishes are visible on finished walls or ceilings. These items are cosmetic in nature and, although we work diligently to minimize their occurrence, are deemed as expected behavior, by industry standards. The Builder will repair only such blemishes those noted prior to closing at the final walkthrough. The Builder is not required to paint an entire wall or room. The Builder is not required to repair defects that are covered by wallpaper. Bulging seams Bulging seams are due to settlement of the house. They also occur when abutting pieces experience differential settlement relative to each other. A bulging seam should not exceed 1/8 inch relative to the plane of the wall in question, 3 inches on either side of the seam. Builder shall fix a seam that exceeds the specified acceptable tolerance such that it meets or exceeds said tolerance. 7A. Ceramic Tile Possible color variation. Tiles can vary in slight shade in color variation. None. Ceramic tile cracks and becomes loose. Ceramic tile should not crack or become loose. The builder shall replace any cracked tiles and re- secure any loose tiles unless the defects were caused by Owner s 13

20 negligence. Builder is not responsible for discontinued patterns or color variations in ceramic tile. Cracks appear in grouting of ceramic tile joints or at junctions with other material such as a bathtub. Cracks in grouting of ceramic tile joints are commonly due to normal shrinkage conditions. Regrouting of these cracks is a maintenance responsibility of the Owner within the life of the home. Builder is not responsible for color variations of discontinued color grout or at junctions with other material such as a bath tub Cracks in grouting are a maintenance issue and will not be addressed by the builder at any time during the warranty period. 7B. Tile, Brick, Marble, and Stone Flooring Tile, brick, marble, or stone flooring is broken or loose. Tile, brick, marble and stone flooring shall not crack or loosen within one year of the commencement date. The Builder will replace cracked tiles, bricks, marble, and stone flooring, and re- secure loose tiles, bricks, marble, and loose stone, unless the defects were caused by the owner s actions or negligence. 7C. Resilient / Vinyl Flooring Nail pops appear on the surface of resilient flooring. Readily apparent nail pops should be repaired. The Builder shall correct nail pops, which have broken the surface. The Builder shall repair or replace resilient floor covering in the affected area with similar material. Builder is not responsible for discontinued patterns or color variations in the floor covering. Depressions or ridges appear in the resilient flooring due to subfloor irregularities. Readily apparent depressions of ridges exceeding 1/8 inch should be repaired. The ridge or depression measurement is taken at the gap created at one end of the six- inch straight edge placed over the depression or ridge with three inches on one side of the defect held tightly to the floor. 14

21 The Builder shall take corrective action, as necessary to bring the defect within acceptable tolerance so that it is not readily visible. Builder is not responsible for discontinued patterns or color variations in floor covering. Resilient flooring looses adhesion. Resilient flooring should not lift, bubble or become unglued. The Builder shall repair or replace resilient flooring as required. The Builder shall not be responsible for discontinued patters or color variations of floor covering or for problems caused by Owner neglect or abuse. Seams or shrinkage gaps show resilient flooring joints. Gaps shall not exceed 1/16- inch width in resilient floor covering joints. Where dissimilar materials abut, a gap shall not exceed 1/8 inch. The Builder shall take action as necessary to correct the problem. 7D. Strip Oak Flooring Gaps have developed between strip oak floorboards. Gaps between floorboards shall not exceed 1/8 inch in width. The Builder will repair gaps wider than 1/8 inch appearing during the warranty period by filling or by replacing the adjoining floor boards in the affected area only at the Builder s option. Strip oak floorboards are cupped. Cups in strip oak floor boards shall not exceed 1/16 inch in depth in a 3- inch maximum span measured perpendicular to the long axis of the board. Cupping caused by exposure to moisture beyond the control of the Builder is not covered. The Builder will correct or repair to meet the standard. 7E. Carpeting Carpeting becomes loose, a seam separates or excessive stretching occurs. Wall- to- wall carpeting, installed as the primary floor covering, when stretched and secured properly should not 15

22 come up, become loose, separate or stretch excessively at its points of attachment at time of final walk through. Builder is to restretch or resecure carpeting as needed during the warranty period. 7F. Special Coating Cracks in exterior stucco wall surface. Cracks are not unusual in exterior stucco wall surfaces. Cracks greater than 1/8 inch in width are considered excessive. The Builder shall repair cracks exceeding 1/8 inch in width as required. 7G. Painting Mildew or fungus on painted surfaces. Mildew or fungus will form on a painted surface. Mildew or fungus formation is a condition the Builder cannot control and is an Owner maintenance item. Exterior paint or stain peels or deteriorates. Exterior paints or stain should not fail during the first year of ownership. Builder shall properly prepare and refinish affected areas, matching color as closely as possible. Where finish deterioration affects the majority of the wall or area, the whole area should be refinished. The warranty on the newly repainted surfaces will not exceed beyond the original warranty period. Painting required as corollary repair because of work. Necessary repairs required under this warranty should be refinished to match surrounding areas as closely as possible. Refinish repaired areas as indicated. Deterioration of varnish or lacquer finishes. Natural finishes on interior woodwork should not deteriorate during the first year of ownership. However, varnish- type finishes used on the exterior will deteriorate rapidly and are not covered by the warranty. Retouch affected area of natural finished interior woodwork, matching the color as closely as possible. 16

23 Interior paint application and coverage. Interior paint shall be applied in a manner sufficient to visually cover wall, ceiling and trim surfaces where specified. The Builder shall retouch wall, ceiling or trim surfaces where inadequate paint has been applied to cover original surfaces and must be acknowledged at final walk through. The painter will only return to home one time. Cracked caulking. Cracked caulking is an expected behavior; it does not fall in the parameter of a defect in workmanship and / or materials. Cracks in caulking will become especially prevalent after the home has gone through a heat cycle. The Builder will correct all cracks in caulking noted during the final walk through prior to closing. These are considered cosmetic concerns and typical homeowner s maintenance and will not be corrected by the Builder after the commencement date of this warranty. 7H. Wall Covering Peeling of wallpaper. Peeling of wallpaper is unacceptable. Builder shall repair peeling wallpaper noticed at time of final walk through. Builder is not responsible for minor mismatching in pattern or color. 8. Specialties 8A. Louver and Vents Inadequate ventilation of attic and crawl spaces. Attic and crawl spaces shall have a natural ventilation area as required by the approved building code specifications. The Builder shall provide for adequate ventilation. Builder is not responsible for Owner alterations to the original system. 8B. Fireplaces Fireplace or chimney does not draw properly. 17

24 A properly designed and constructed fireplace and chimney should function properly. It is normal to expect that high winds can cause temporary negative draft situations. Similar negative draft situations can also be caused by obstructions such as large tree branches that are too close to the chimney. Some houses may need to have a window opened slightly to create an effective draft. Determine the cause of malfunction and correct as required if the problem is one of design and construction. Chimney separation from structure to which it is attached, and drawer faces. Newly built fireplaces will often incur slight amounts of separation from the main structure. Builder to determine the cause of separation and correct as required. 9. Cabinets Warping and operation of kitchen cabinet doors and drawer faces. Cabinet doors and drawer faces should not warp to exceed ¼ inch, provided the proper levels of humidity have been maintained. Both cabinet doors and drawer faces should be properly adjusted and operating in a smooth, effective manner. Adjust, repair or replace defective cabinet doors and drawer faces to correct condition. Surface cracks, delaminating and chips in high pressure laminated vanity and kitchen cabinet countertops. Countertops fabricated with high- pressure laminate coverings should not delaminate, have chips or surface cracks. The deck areas joint may have a maximum of 1/16- inch gap. All other areas of the joint may have a maximum of 1/16- inch differential in surface alignment. Repair or replace to meet the above criteria. 10. Mechanical 10A. Water System Plumbing pipes freeze and burst and/or leak. 18

25 Drain, waste and vent pipes or water lines should be adequately protected, as required by the applicable code, during normally anticipated cold weather, and as defined in accordance with ASHRAE designed temperatures to prevent freezing. Builder is not responsible for freezing pipes when installed under applicable code. Owner has responsibility of protecting pipes against freezing. Water supply system fails to deliver water. All services connections to municipal water main and private supply are the Builder s responsibility. Private systems shall be designed and installed in accordance with all approved building, plumbing and health codes. Builder to repair as necessary if failure is the result of defective workmanship or materials. If conditions beyond his control disrupt or eliminate the source of the supply, then it is not his responsibility. 10B. Septic System Septic system fails to operate properly. Septic system should be capable of properly handling normal flow of household effluent. Septic system should be designed and installed to comply with state, county, or local code regulations. Owner shall be responsible for septic system maintenance. Builder should be responsible for the installation of an operational system and shall take corrective action to repair. Builder shall not be responsible for malfunctions which occur through owner negligence or abuse and from conditions that are beyond his control such as, but not limited to the following: A. Connection of sump pump, roof drains of backwash from water conditioner, to the system. B. Placing of non- biodegradable or other inappropriate items in the system. C. Addition of any harsh chemicals, greases of cleaning agents and excessive amounts of bleaches of drain cleaners. D. Use of food waste disposal not supplied by builder. E. Placement of impervious surfaces over the disposal area. 19

26 F. Failure to periodically pump out the septic tank, when required. 10C. Plumbing Faucet or valve leak. No valve or faucet should leak due to defects in materials or workmanship. However, leakage caused by worn washers or seats is an Owner maintenance item. Builder shall repair or replace the leaking faucet or valve unless leakage is due to a worn washer or seat. Defective plumbing fixture, appliances or trim fittings. Fixtures, appliances or fittings should comply with their manufacturer. The Builder shall replace any fixture or fitting which is outside of acceptable standards as defined by the manufacturer. Noisy water pipes. There will be noise emitting from the water pipe system, due to the flow of water. Builder cannot remove noises due to water flow and pipe expansion. Leakage from any piping other than those caused by frozen pipes. No leaks should exist in any soil, waste vent or water pipe. Condensation on piping does not constitute leakage and is not covered. Builder shall make necessary repairs to eliminate leakage. Stopped up sewer, fixtures, and drains. Sewers, fixtures, and drains should operate properly. The Builder is not responsible for sewers, fixtures and drains which are clogged through the Owner s negligence. Where defective construction is the cause, the Builder shall assume the cost or repair. Where Owner negligence is shown to be cause, the Owner shall assume all repair costs. Cracking or chipping of porcelain or fiberglass surfaces. 20

27 Chips and cracks on surfaces of bathtubs and kitchen sinks can occur when the surface is hit with sharp or heavy objects. Builder to repair any chips or cracks noted at the final walk through and prior to the commencement date. 10D. Heating Inadequate heating. Heating system should be capable of producing an inside temperature of 70 degrees F, except in vaulted areas at a height of 5 feet above the floor, under local outdoor winter design conditions as specified an ASHRAE handbook. Federal, state or local energy codes shall supersede this standard where such codes have been locally adopted. Must be allowed at least 72 hours to maintain 70 degrees F. Builder shall correct the heating system as required to provide the required temperatures. The Owner shall be responsible for balancing dampers, registers and other minor adjustments. 10E. Cooling Inadequate cooling. Where air conditioning is provided, the cooling system shall be capable of maintaining a temperature of 72 degrees F. as measured in the center of each room at a height of 5 feet above the floor, under local outside summer design conditions as specified in ASHRAE handbook. Federal, state or local energy codes shall supersede this standard where such codes have been locally adopted. Correct cooling system to meet temperature conditions, in accordance with specifications. Where outside temperatures exceed 93 degrees F, this will be accepted. Refrigerant lines leak. Refrigerant line should not develop leaks during normal operating. Builder to repair as necessary to meet standard. 21

28 10F. Condensation Lines Condensation lines clog up. Condensation lines will clog under normal use. This is an Owner maintenance item. Builder to provide unobstructed construction lines at closing. 10G. Air Distribution Ductwork noisy. When metal is heated it expands and when cooled it contracts. The result is ticking or crackling which is generally to be expected. The stiffening of the ductwork and the gauge of the metal used shall be such that ducts do not oil can. The booming noise caused by oil canning is not acceptable and the Builder must take necessary steps to eliminate the sound. Ductwork separates or becomes unattached. Ductwork should remain intact and securely fastened. Reattach and resecure all separated or unattached ductwork that happens as a result of a defect in workmanship and materials. 11. Electrical 11A. Electrical Conductors Failure of wiring to carry its designed fuse load to the electrical box. Wiring should be capable of carrying the designed load for normal residential use to electrical box. Check wiring for conformity with local and state electrical code requirements. Repair wiring if it does not conform to code specifications. 11B. Switches and Receptacles Malfunction of electrical outlets, switches or fixtures. All switches, fixtures, and outlets should operate as intended. Repair or replace defective switches, fixtures and outlets. 22

29 11C. Service and Distribution Ground fault interrupter trips frequently. Ground fault interrupters are sensitive safety devices installed into the electrical system to provide protection against electrical shock. These sensitive devices can be tripped very easily. Builder is to install ground fault interrupter in accordance with approved electrical code. Tripping is to be expected and is not covered, unless due to faulty installation. 12. Manufacturer s Warranties Builder assigns and passes through to Owner the Manufacturer s warranties on all consumer products as defined in the Magnuson- Moss Warranty Act: (15U.S.C.ss ) It is strongly suggested that the Homeowner review his/her Homeowner s manual to find all warranty registration cards. It is further suggested that found warranty cards be filled out and returned to the manufacturer as soon as possible. Builder is not responsible for the following: 1. Heating and Ventilation - Furnace, air conditioning, coils and compressor, humidifier, electronic air cleaner, heat pump, exhaust fan, thermostat. 2. Mechanical/Electrical - Intercom, central vacuum system, security system, fire and smoke alarm, fire extinguisher, garage door opener, door chimes, electric meter, gas meter, barbecue grill, light bulbs. 3. Plumbing - Water heater, water pump, water meter, sump, water softener. 4. Appliances - Oven, surface unit, range, trash compactor, freezer, refrigerator, dishwasher, oven hood, disposal, ice maker, food center, clothes washer, clothes dryer, hot water dispensers. 13. Exclusions This warranty does not apply to: A. Defects in outbuildings, including detached garages and detached carports, (except outbuildings which contain the plumbing, electrical, heating, cooling or ventilation systems serving the Home); swimming pools and other recreational facilities; decks; fences; landscaping (including sodding, seeding, shrubs, trees, and plantings); or any other improvements not a part of the Home. 23

30 B. Damage to or defects in concrete floors of attached garages that are built separate from foundation walls or other structural elements of the Home. C. Any appliance, equipment, or other item in the house which is a consumer product as defined above under manufacturer warranties. D. Damage due to the abuse or neglect of the Owner s failure to provide proper maintenance. E. Defects or damage caused by someone other that Builder. F. Defects or damage resulting from any changes made by someone other than the Builder including, but not limited to changes in the structure of the house, mechanical or electrical systems, and exterior facing. G. Any damage to the extent it is caused or made worse by: 1. Loss or damage externally caused, including but not limited to acts of God, riot or civil commotion, windstorm, fire, explosion, smoke, water, hail, lightning, falling trees or other object, aircraft, vehicles, flood, mud slides, earthquakes, volcanic eruption, natural or introduced gases, abuse or use of the Home, or any part thereof, beyond the reasonable capacity of such part or such use, or by any other external cause. 2. Changes in the level of underground water table which were not reasonably foreseeable at the time of construction of the Home; 3. Damage or condensation due to the failure of the Owner to maintain adequate ventilation. H. Injury to any person, bodily or otherwise, whether or not caused by any defect in the construction of the house and whether or not resulting from the negligence of the Builder. I. Defects in or damage to any real or personal property which was not a part of the real property included in the original purchase. J. Normal wear and tear, normal deterioration, or normal changes which are the result of characteristics common to the materials used. K. Loss or damage covered by Owner s insurance. L. Insect damage. M. Incidental or consequential damages. Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to Owner. N. Warping or shrinkage of materials. O. Cosmetic discrepancies not included in the Final Walk Through Agreement, a copy of which is attached as Exhibit A. 14. Claims Procedures Upon detecting the existence of a defect, the Owner shall follow the procedure set forth below: 1. Contact directly the applicable parties, which are listed on the Trades List that is provided within the Homeowner s Manual. 24

31 2. If the defect is covered by Builder s Limited Warranty, written notice with a thorough and complete explanation of the defect shall be sent to Builder at the address of 120 Nadina Ct., Fayetteville, NC Only emergency reports will be taken by telephone. If the item does not affect the habitability and function of the home, all items will be consolidated onto a list, which will be addressed at the year- end punch- list. 3. If the defect is covered by manufacturer s warranty, employ the Homeowner s manual for information and assistance in filing the claim. 15. Builder s Performance 1. If a defect occurs in an item which is covered by this Limited Warranty, the Builder will repair or replace, or pay Owner the reasonable cost of repairing or replacing the defective item. The choice among repair, replacement or payment is the Builder s. Action taken by the Builder to correct defects shall not exceed any term of this warranty. Corrective work shall be performed by Builder only during normal working hours, 8:00 a.m. to 5:00 p.m., Monday through Friday. No corrective work will be performed on Saturday, Sunday or company holidays. Builder shall not be required to enter the premises to perform corrective work unless Owner has provided Builder access and permission to repair defects covered by this Warranty, and shall be at no charge to Owner. 2. Access to Your Home In order for the Builder to fulfill their respective obligations under the terms and conditions of the warranty, access will be required to the Home. You hereby grant access to Your Home during normal business hours for the purpose of allowing the Builder, their agents, contractors and/or inspectors to conduct inspections, access claims, make repairs and to conduct tests as may be determined as necessary. Refusal To Allow Access To Your Home Will Void The Warranty. 16. Arbitration Any controversy or claim arising out of or relation to this Limited Warranty, or an alleged breach hereof, shall be settled by binding arbitration in accordance with the Rules of the Construction Arbitration Associates, Ltd., should such entity be unavailable to arbitrate the controversy, then another professional arbitration service, which is mutually agreeable to the builder and Owner shall be utilized. 25