DRAFT/SAMPLE RESIDENTIAL WARRANTY CORPORATION THE TRCC ADDENDUM TO 10 YEAR WARRANTY FOR NEW HOMES THE LIMITED WARRANTY PRESENTS

Transcription

1 RESIDENTIAL WARRANTY CORPORATION PRESENTS THE TRCC ADDENDUM TO THE LIMITED WARRANTY 10 YEAR WARRANTY FOR NEW HOMES Third-Party Warrantor: Western Pacific Mutual Insurance Company, a Risk Retention Group This TRCC Addendum has been approved for use by the Texas Residential Construction Commission 2005 Harrisburg, PA WPIC #320 ADD

2 IMPORTANT NOTICE To obtain information or make a complaint: You may call the company's telephone number for information or to make a complaint at: You may also write to Warranty Underwriters Insurance Company at: WPIC OR Residential Warranty Corporation (Administrator) 1655 Lafayette Street, Suite Derry Street Denver, CO Harrisburg, PA You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complains at: You may contact the Texas Department of Insurance: P.O. Box Austin, TX Fax: PREMIUM or CLAIM DISPUTES: Should you have a dispute concerning a claim, you should contact the agent of the company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. Page i

3 Residential Warranty Corporation 5300 Derry Street, Harrisburg, PA Table of Contents Section I. Definitions Section II. Scope of the TRCC Addendum Section III. Making a Claim Section IV. Resolving Disputes Section V. Performance Standards A. Warranty Stands Year One A.1 Foundations and Slabs A.2 Framing A.3 Drywall A.4 Insulation...13 A.5 Exterior Siding & Trim A.6 Masonry Including Brick, Block & Stone A.7 Stucco A.8 Roofs A.9 Doors & Windows A.10 Interior Flooring A.11 Hard Surfaces Including Ceramic Tile, Flagstone, Marble, Granite, Slate, Quarry Tile, Finished Concrete or Other Hard Surfaces A. 12 Painting, Stain & Wall Coverings A. 13 Plumbing A.14 Heating, Cooling & Ventilation A.15 Electrical Systems & Fixtures...29 A.16 Interior Trim...30 A.17 Mirrors, Interior Glass & Shower A.18 Hardware & Ironwork...31 A.19 Countertops & Backsplashes...32 A.20 Fireplaces...33 A.21 Irrigation Systems...34 A.22 Fencing...34 A.23 Yard Grading...34 A.24 Pest Control...35 B. Years One & Two Systems Coverage B.1 Electrical B.2 Plumbing B.3 Heating, Air Conditioning & Ventilation C. Ten Year Structural Coverage Page ii

4 Section I. Definitions Page 1 To help you better understand this TRCC Addendum, the following definitions apply in this book. 1. Administrator Residential Warranty Corporation (RWC) is the Administrator of this TRCC Addendum to the Limited Warranty. RWC is not the Warrantor and it is not liable for warranty claims. 2. Application For Warranty form The form signed at closing by you, the Purchaser, and your Builder that identifies the location, the Effective Date Of Warranty and the Final Sales Price of the enrolled Home. If the Builder is participating in the RWC electronic process, the Application for Warranty form is eliminated. 3. Arbitrator A representative of an independent arbitration service agreed upon by you, the Purchaser, and the Administrator to determine coverage on an Unresolved Warranty Issue. 4. Builder The person, corporation, partnership or other entity that participates in the RWC Limited Warranty Program and has obtained this TRCC Addendum to the Limited Warranty. 5. Code The International Residential Code, or, if the context requires, the National Electrical Code. 6. Consequential Damages All consequential damages including costs of shelter, alleged losses in value, transportation, food, moving, storage or other incidental expenses related to relocation during repairs. 7. Construction Defect A failure of any item warranted by this TRCC Addendum to the Limited Warranty to meet the applicable performance standard adopted by the TRCC and any physical damage to the Home that is proximately caused by that failure. Failure to complete construction of the Home or any portion of the Home, in whole or in part, is not considered a Defect. 8. Cooling, Ventilating and Heating Systems The systems and components of the HVAC systems that a Builder must warrant under the rules of the TRCC. 9. Effective Date Of Warranty The date coverage begins as specified on the Application For Warranty form. 10. Electrical Systems The electrical systems and components of those systems that a Builder must warrant under the rules of the TRCC. 11. Home The single family dwelling, identified on the Application for Warranty form, which may be a townhome, or duplex. 12. Major Structural Components The load-bearing portions of the following elements of a Home: (1) Footings and Foundations; (2) Beams; (3) Headers; (4) Girders; (5) Lintels; (6) Columns (other than a column that is designed to be cosmetic); (7) Load-bearing portions of walls and partitions; (8) Roof framing systems, to include ceiling framing; (9) Floor systems; and (10) Masonry arches. 13. Manufactured Products Those items installed in the Home that meet the definition found in Section 304.1(c)(12) of the rules of the TRCC. This Limited Warranty does not cover Manufactured Products. 14. Owner See Purchaser. 15. Plumbing Systems The Plumbing Systems and components of those systems that a Builder must warrant under the rules of the TRCC. 16. Purchaser You. The Purchaser includes the first buyer of the warranted Home and any and all subsequent Owners who take title within the warranty period. 17. Residence See Home. 18. Residential Warranty Corporation (RWC) See Administrator. 19. Sewage Disposal System (Private or Public) The Sewer Systems and components of those systems that a Builder must warrant under the rules of the TRCC. 20. Structurally Attached An integral part of the Home being structurally supported by footings, block walls or reinforced concrete and connected to the foundation of the Home. 21. TRCC The Texas Residential Construction Commission, a state agency that regulates Builders and third-party warranty companies. 22. Unresolved Warranty Issue All requests for warranty performance, demands, disputes, controversies and differences that may arise between the parties to this TRCC Addendum, as set forth in Section III hereof, that cannot be resolved among the parties. An Unresolved Warranty Issue may be a disagreement regarding: a. the coverages in this TRCC Addendum to the Limited Warranty; b. an action performed or to be performed by any party pursuant to this TRCC Addendum to the Limited Warranty; c. the cost to repair or replace any item covered by this TRCC Addendum to the Limited Warranty. d. any other complaint or controversy regarding this TRCC Addendum between the parties to this Addendum.

5 Section I. Definitions 23. Warrantor Your Builder in Years 1 and 2. WPIC is the Warrantor on Major Structural Components in Years 3 through 10. If your Builder fails to fulfill its state-imposed warranty obligations existing in years 1 and 2, WPIC will guaranty those portions of the Builder s obligations under the terms and conditions set forth in greater detail herein. 24. Water Supply System (Private or Public) The potable water systems and components of those systems that a Builder must warrant under the rules of the TRCC. 25. WPIC Western Pacific Mutual Insurance Company; Located at 1655 Lafayette Street, Suite 200, Denver, CO 80218, phone: Section II. The Scope of the TRCC Addendum The following summary should generally explain the nature and scope of this TRCC Addendum to the Limited Warranty, as well as the role of the state-mandated warranties. A. Introduction to the Limited Warranty 1. This book provides specific details, conditions and limitations of this TRCC Addendum to the Limited Warranty including procedures for requesting warranty performance and for binding arbitration, in accordance with the procedures of the Federal Arbitration Act. Additional information may be received by calling RWC at (717) Read this document in its entirety to understand the protection it affords, the exclusions applicable to it, the Performance Standards which determine its interpretations and operation and your responsibilities. 2. This is NOT an insurance policy, a maintenance agreement or a service contract. It is an agreement to guaranty certain obligations of your Builder and to assume other obligations of your Builder. 3. The TRCC, an agency of the State of Texas, has adopted guidelines for the registration of Homebuilders, for performance obligations of Homes and improvements, and for the registration of thirdparty warranty companies. This TRCC Addendum is intended to integrate with the state-mandated warranties for Homebuilders. 4. You are responsible for maintenance of your new Home. General and preventative maintenance are required to prolong the life of your new Home. 5. This TRCC Addendum to the Limited Warranty is automatically transferred to subsequent Owners during the ten-year term of the Limited Warranty. 6. Some Home loans are guaranteed by the VA or FHA. Under such arrangements, the United States Department of Housing and Urban Development requires additional warranties and obligations. If your loan was a VA or FHA loan, not only the 10 Year Limited Warranty, but also the HUD Addendum in that warranty book applies to you. B. A General Explanation of Warranties In Texas 1. The TRCC was created under the authority of Title 16 of the Texas Property Code. The TRCC has established in Title 10 of the Texas Administrative Code, Section (a f), five warranties that automatically apply to new Homes, and these are described as: a. A one-year warranty for workmanship and materials; b. A two-year warranty for Plumbing, Electrical, Heating and Air-Conditioning delivery Systems; c. A ten-year warranty for Major Structural Components; d. A ten-year warranty of habitability; and e. A warranty on Manufactured Products. The exact terms and conditions of these warranties can be found in Title 10 of the Texas Administrative Code, in Sections to If you have any questions about your Builder or these warranties, you may contact the TRCC. 2. The Texas Property Code further provides in section that these warranties supersede all implied warranties and are the only warranties that exist other than for warranties created by other statutes or expressed in an additional, express written warranty with a Builder. WPIC provides such an additional, express written warranty to apply in the event that your Builder is out of business during the one year warranty for workmanship and materials, the two year warranty for Plumbing, Electrical, Heating and Air- Conditioning delivery Systems, or the first two years of the warranty for Major Structural Components. 3. The five warranties mentioned above are explained through a series of performance standards that have been adopted by the TRCC. The performance standards that are in place when your Home is constructed shall apply to your Home. These Performance Standards are listed in Section V. Performance Standards. 4. The Texas Property Code also permits a Builder to transfer its obligations under any of these warranty obligations to an approved third-party warranty company. The third-party warranty company has to assume a Builder s obligations under these warranties in order for the transfer to be effective. As set forth in more detail below, WPIC has agreed to assume your Builder s warranty obligations for Major Structural Components in the event the problem arises in the third through the tenth year of the warranty. However, your Builder is not relieved from the warranty obligations for any of the warranties mentioned above, other than the ten-year warranty on Major Structural Components, and only then if the Construction Defect arises in the third through the tenth year of the warranty. Page 2

6 Section II. The Limited Warranty Page 3 5. If a Homeowner and a Builder cannot agree on the presence of a Construction Defect or its proper resolution, the TRCC has further created a State- Sponsored Inspection and Dispute Resolution procedure. This procedure is a mandatory prerequisite to initiating a lawsuit or an arbitration against a Builder. In certain circumstances (as more fully explained below), this is also a mandatory prerequisite to initiating a lawsuit or an arbitration against a third-party warranty company, including WPIC. C. What Warranties Are Provided Under this Agreement? The following describes the additional warranty rights that are provided by this Limited Warranty. 1. General Workmanship Standards for Year 1 As explained above, all Builders in Texas warrant their workmanship and materials for a period of one year, under the performance standards adopted by the TRCC. This TRCC Addendum does not diminish or transfer that warranty obligation away from your Builder. However, your Builder has provided this additional warranty that adds a layer of protection. If your Builder has filed bankruptcy or is no longer in business and cannot be located during the oneyear warranty period, WPIC agrees to perform your Builder s obligations under the state performance standards. This does not release the Builder from liability to you, it simply provides that WPIC will become additionally liable for the workmanship standards during this warranty period. If your Builder only disputes your claim or ignores your notice, this will not trigger WPIC s obligation, and in such event, you must exhaust any claim with your Builder through a final judgment before making a claim under this warranty. If your Builder has filed bankruptcy or is no longer in business and cannot be located during the one-year warranty period, and you would like to make a claim with WPIC under this additional warranty, you must follow the steps for Warranty Claims in Years 1 and 2 outlined below. 2. Performance Standards for Plumbing, Electrical, Heating and Air-conditioning Delivery Systems for Years 1 and 2 As explained above, all Builders in Texas warrant the Plumbing, Electrical, Heating, and Air- Conditioning delivery Systems for a period of two years, under the performance standards adopted by the TRCC. This TRCC Addendum does not diminsh or transfer that warranty obligation away from your Builder. However, your Builder has provided this additional warranty that adds a layer of protection. If your Builder has filed bankruptcy or is no longer in business and cannot be located during the warranty period, WPIC will perform your Builder s obligations under the state performance standards. This does not release the Builder from liability to you, it simply provides that WPIC will become additionally liable for the systems standards during this warranty period. If your Builder only disputes your claim or ignores your notice, this will not trigger WPIC s obligation, and in such event, you must exhaust any claim with your Builder through a final judgment before seeking relief from WPIC. If your Builder has filed bankruptcy or is no longer in business and cannot be located during the warranty period, and you would like to make a claim with WPIC under this additional warranty, you must follow the steps for Warranty Claims in Years 1 and 2 outlined below. 3.Performance Standards for Major Structural Components While all Builders in Texas must warrant the Major Structural Components of their Homes to meet the performance standards adopted by the TRCC, your Builder and WPIC have agreed to transfer some of this responsibility to WPIC. For the first two years of the life of the Home, your Builder retains the warranty obligations for the Major Structural Components. Beginning in the third year, and continuing through the tenth year of the warranty, WPIC has agreed to assume your Builder s liability as permitted by Sections and of the rules of the TRCC. However, your Builder has provided an additional layer of warranty protection in the event your Builder is out of business during the first or second year of this warranty. If your Builder has filed bankruptcy or is no longer in business and cannot be located, WPIC will per form your Builder s obligations under the state performance standards applicable to Major Structural Components. This does not release the Builder from liability to you, it simply provides that WPIC will become additionally liable for these standards. If your Builder only disputes your claim or ignores your notice, this will not trigger WPIC s obligation, and in such event, you must exhaust any claim with your Builder through a final judgment before seeking relief from WPIC. If your Builder has filed bankruptcy or is no longer in business and cannot be located during the first or second year of this warranty, and you would like to make a claim with WPIC under this additional warranty, you must follow the steps for Warranty Claims in Years 1 and 2 outlined below.

7 Section III. Making a Claim Under this Warranty We hope that you will not experience problems with your Home. If you do, WPIC has set forth a step-by-step outline for making a warranty request of WPIC. The first process applies if your Builder is no longer in business, and the second process applies to Construction Defect claims for Major Structural Components during the third through tenth years of the warranty. A. Claims Made During Years One and Two As explained above, WPIC will only fulfill your Builder s responsibility for claims arising in years one and two when your Builder has filed bankruptcy or is no longer in business and cannot be located. If you believe that during this period a component of your Home does not meet one of the performance standards applicable to: 1. A one-year warranty for workmanship and materials; 2. A two-year warranty for Plumbing, Electrical, Heating and Air-Conditioning delivery Systems; or 3. A ten-year warranty for Major Structural Components; and your Builder has filed bankruptcy or is no longer in business and cannot be located, follow the following steps to make a claim against WPIC under this TRCC Addendum. Step 1: Provide written notice to WPIC of the alleged Construction Defect and present evidence to WPIC that your Builder has filed bankruptcy or is no longer in business and cannot be located. Step 2: WPIC will investigate the evidence regarding the status of your Builder; and if it is determined that your Builder has filed bankruptcy or is no longer in business and cannot be located, proceed to Step 3. Otherwise, you must proceed against your Builder to seek repairs and/or recovery of damages. Step 3: WPIC will review the notice of the alleged Construction Defect to determine if it is complete, if the Home is enrolled in the warranty program, if the warranty period has not expired relative to the complaint, if the complaint is of a type that could be covered under an existing performance guideline, and if it otherwise is proper in Step 4: form. Within 15 days after determining that the notice is appropriate to proceed, RWC (as Administrator) will assign a person to inspect the alleged complaint. This person may be an employee of RWC or an affiliate or it may be an independent consultant. However, if the complaint asserts a problem with a Major Structural Component, RWC will direct a structural engineer to inspect the alleged complaint. Step 5: RWC will arrange for the inspection of your Home as soon as practical and within normal business hours. RWC will endeavor to arrange for the inspection within 10 days after the assignment of the inspector to perform the inspection. Step 6: The inspector will conduct an inspection, taking photos, measurements, or other data as the inspector determines is relevant and report back to RWC. If the complaint concerns workmanship or systems, RWC will endeavor to report back to you within 15 days of completing the inspection. If the complaint concerns a Major Structural Component, RWC will endeavor to report back to you within 30 days after completing the inspection. Step 7: If RWC determines that the component does not meet the applicable performance standards and is not otherwise excluded, RWC s report will also include a recommendation for repairs. If the complaint involves a Major Structural Component, the recommendation may include a suggestion for additional testing (plumbing tests, concrete tests, soils tests, etc.), interim repairs, or other efforts to further investigate or remediate the condition. Step 8: Because WPIC is not assuming your Builder's state-mandated warranties for years 1 and 2, you are not required to submit a request for inspection under the State- Sponsored Inspection and Dispute Resolution procedures. You can simply proceed to arbitration under this Addendum if you are not satisfied with RWC's response. B. Mediation of Claims During Years One and Two If you believe during this period that a component of your Home does not meet one of the Performance Standards applicable to 1. A one-year warranty for workmanship and materials; 2. A two-year warranty for Plumbing, Electrical, Heating and Air-Conditioning delivery Systems; or 3. A ten-year warranty for Major Structural Components; then, at your or the Builder's written request the Administrator will mediate your claim by communicating with you, your Builder, and any other individuals or entities who the Administrator believes possesses relevant information for a period of thirty (30) days or longer by agreement of you and your Builder. Page 4

8 Section III. Making a Claim Under this Warranty Page 5 C. Claims Made During Years Three through Ten As explained above, your Builder has agreed to transfer to WPIC its responsibility for Construction Defects in Major Structural Components arising during years three through ten. To proceed with a claim against WPIC under this warranty and for a complaint arising during these years, please proceed as follows: Step 1: WPIC will review the notice of the alleged Construction Defect to determine if it is complete, if the Home is enrolled in the warranty program, if the warranty period has not expired relative to the complaint, if the complaint is of a type that could be covered under an existing performance guideline, and if it otherwise is proper in form. Step 2: Within 15 days after determining that the notice is appropriate to proceed, RWC (as Administrator) will assign structural engineer to inspect the alleged Construction Defect. This person may be an employee of RWC or an affiliate or it may be an independent consultant. Step 3: RWC will arrange for the inspection of your Home as soon as practical and within normal business hours. RWC will endeavor to arrange for the inspection within 10 days after the assignment of the inspector to perform the inspection. Step 4: The inspector will conduct an inspection, taking photos, measurements, or other data as the inspector determines is relevant and report back to RWC. RWC will endeavor to report back to you within 30 days after completing the inspection. Step 5: If RWC determines that the component does not meet the performance standards for Major Structural Components and is not otherwise excluded, RWC s report will also include a recommendation for repairs. The recommendation may include a suggestion for additional testing (plumbing tests, concrete tests, soils tests, etc.), interim repairs, or other efforts to further investigate or remediate the condition. Step 6: If you are not satisfied with RWC s response, you must initiate the Statesponsored Inspection and Dispute Resolution process administered by the TRCC. This is a condition precedent to pursuing arbitration with WPIC. D. General Information Applicable to All Claim Notices 1. Please note that a written request for warranty performance must be postmarked no later than thirty (30) days after the expiration of the applicable warranty period. This applies even if your Builder has filed bankruptcy or is no longer in business. 2. All notices to RWC must be presented in writing to Residential Warranty Corporation, Administrator, 5300 Derry Street, Harrisburg, Pennsylvania , Attn: Warranty Resolution Department, by certified mail, return receipt requested, within a reasonable time after the situation arises. Any such notice should describe the condition in reasonable detail. Requests for warranty performance post marked more than thirty (30) days after the expiration of the term of this TRCC Addendum will not be honored. 3. Your notice to the Administrator must contain the following information: a. Validation Number and Effective Date Of Warranty; b. Your Builder s name and address (even for claims in years 3 10); c. Your name, address and phone number (including Home and work numbers); d. Reasonably specific description of the warranty item(s) to be reviewed; e. A copy of any written notices previously sent to your Builder; f. Photograph(s) may be required; and g. A copy of each and every report you have obtained from any inspector or engineer. 4. You have an obligation to cooperate with the Administrator s inspection and investigation of your warranty request. From time to time, the Administrator may request information from you regarding an alleged Defect. Failure by you or your appointed representative to respond with the requested information within thirty (30) days of the date of the Administrator s request can result in the closing of your warranty file. 5. Actions taken to cure Defects will NOT extend the periods of specified coverages in this TRCC Addendum. E. Obligations for Repair and Exclusions Items that Might Impact Warranty Obligations State Standards. The TRCC has established additional regulations that may impact whether a Construction Defect should be covered under the performance standard, what items are excluded under the performance standards and warranties, and what a Builder s obligations are regarding repairs. This TRCC Addendum attaches those provisions and incorporates them herein. Generally, the requirements for repairs to covered items are set out in section 304.2(a) of the regulations. WPIC s repair obligations under this TRCC Addendum for covered items are as set forth therein for Builders. Those exceptions and exclusions from warranty coverage explained in section 304.2(b) also apply to WPIC. Finally, you are obligated to comply with the Homeowner obligations set forth in 304.2(c). Failure to do so may exclude a Construction Defect from coverage

9 Section III. Making a Claim Under this Warranty Section IV. Resolving Disputes under this Limited Warranty. Finally, the detailed repair obligations set forth in sections to apply to WPIC, in the event that WPIC is otherwise liable for repairs under this Limited Warranty. F. Additional Exclusions Notwithstanding WPIC s limited guaranty of portions of your Builder s warranty obligations and the assumption of the warranty on Major Structural Components during years 3 through 10, WPIC is not liable for: 1. Any deficiency which does not result in actual physical damage or loss to the Home. 2. Any Consequential Damages. 3. Personal property damage, death, or bodily injury. 4. Violation of applicable Building Codes or ordinances unless such violation results in a Defect which is otherwise covered under this TRCC Addendum. Under such circumstances, the obligation of the Warrantor under this TRCC Addendum shall only be to repair the defective warranted portion of the Home, but not to restore or bring the Home to conform to code. 5. Any request for warranty performance submitted to the Administrator after an unreasonable delay or later than thirty (30) days after the expiration of the applicable warranty period. 6. Warranted Defects that you repair without prior written authorization of the Administrator. A. Resolving Disputes 1. All Unresolved Warranty Issues will be submitted to binding arbitration. The Arbitrator shall be an independent Arbitrator or arbitration service upon which you and RWC agree. This binding arbitration is governed by the procedures of the Federal Arbitration Act, 9 U.S.C. 1 et. seq. The party requesting arbitration must pay the arbitration filing fees before the matter is submitted to the arbitration service. Additional fees may be required by the Arbitrator and the initial costs may be allocated by the Arbitrator. After arbitration, the Arbitrator shall have the power to award the cost of this fee to any party or to split it among the parties to the arbitration. The arbitration shall be conducted in accordance with this TRCC Addendum and the arbitration rules and regulations to the extent that they are not in conflict with the Federal Arbitration Act. 2. Within one (1) year after an arbitration award, either party may apply to any court of competent jurisdiction to confirm the award. RWC s receipt of a written request for arbitration shall stop the running of any statute of limitations applicable to the matter to be arbitrated until the Arbitrator renders a decision. The decision of the Arbitrator shall be final and binding upon all parties. 7. Any damages to, or resulting from, a swimming pool whether located within or outside the Home, as a result of its construction, placement, use, equipment, maintenance, etc. 8. The removal and/or replacement of items specifically excluded from coverage under this TRCC Addendum, such as landscaping or personal property, items not originally installed by your Builder, such as wallpaper, where removal and replacement are required to execute a repair. 9. The warranty of habitability. 10. Any Manufactured Products warranty. 11. Special Exclusions for Water Damage. Your Builder warrants your Home against water intrusion or water leaks under several of the performance standards adopted by the TRCC. However, notwithstanding any provisions in this TRCC Addendum that appear to be to the contrary, WPIC does not warrant the Home or any personal property against any water intrusion, water leaks, water damage, or any damage resulting from water. This applies to roof leaks, water leaks, plumbing leaks, or other complaints of water discharge. This further applies to the consequence of water damage, including mold, rust, dry rot, mildew, fungus, bacteria, damage to personal property, and other consequential damages. However, if a water leak resulting from a Construction Defect results in a non-compliance with the performance standards for Major Structural Components, WPIC will warrant that condition as set forth above. 3. Since this TRCC Addendum provides for mandatory binding arbitration of Unresolved Warranty Issues, if any party commences litigation in violation of this TRCC Addendum, such party shall reimburse the other parties to the litigation for their costs and expenses, including attorney fees, incurred in seeking dismissal of such litigation. 4. If the Arbitrator awards repairs as a form of relief the Arbitrator shall specify the time in which the repairs must be performed, which shall not be less than (60) days from the date of the Arbitrator s award. Repairs will begin as soon as possible and will be completed within the specified period with the exception of any repair that would reasonably take more than sixty (60) days to complete, including, but not limited to, repair delayed or prolonged by inclement weather. WPIC will complete any ordered repair or replacement as soon as possible without incurring overtime or week end expenses. 5. You may request a compliance arbitration after repairs are completed if any dispute remains about the re pairs. You must pay the fees for the compliance arbitration prior to the matter being submitted to the arbitration service. Page 6

10 Section IV. Resolving Disputes Page 7 6. You must provide reasonable weekday access during normal business hours in order to perform repairs. Failure by you to provide such access may relieve the Warrantor of its obligations under this TRCC Addendum. 7. The Warrantor has the choice to repair, replace or pay the reasonable cost to repair or replace warranted items which do not meet the Performance Standards and are not excluded for coverage. B. Conditions 1. This TRCC Addendum provides coverage only in excess of coverage provided by other warranties or insurance, including, but not limited to, the RWC Limited Warranty # This TRCC Addendum is binding on the Builder and you and your heirs, executors, administrators, successors and assigns. 3. This TRCC Addendum is separate and apart from your contract and/or other sales agreements with your Builder. It cannot be affected, altered or amended in any way by any other agreement which you may have. 4. This TRCC Addendum cannot be modified, altered or amended in any way except by a formal written instrument signed by you, your Builder and the Administrator. 5. If any provision of this TRCC Addendum is determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 6. All notices required under this TRCC Addendum must be in writing and sent by certified mail, return receipt requested, postage prepaid, to the recipient s address shown on the Application For Warranty form, or to whatever address the recipient may designate in writing. 7. If actions by the Warrantor on any obligations under this TRCC Addendum are delayed by an event beyond its control, such performance will be excused until the delaying effects of the event are remedied. Such events include, but are not limited to, acts of God or nature, acts of the common enemy, war, riot, civil commotion or sovereign conduct, or acts or omissions by you or any other person not a party of this TRCC Addendum. 8. If your Builder fails to complete any part of the Home that is reasonably foreseeable to cause structural damage to the Home, then it is your responsibility to complete such parts of the Home to avoid the structural damage. If you fail to complete the work, then any resulting structural damage is not covered under this TRCC Addendum. 9. Costs incurred for unauthorized repairs to warranted items are not reimbursable. Written authorization prior to incurring expenses must be obtained from the Administrator. 10. Whenever appropriate, the use of one gender includes all genders and the use of the singular includes the plural. 11. Under this TRCC Addendum, the Warrantor is not responsible for exact color, texture or finish matches in situations where materials are replaced or repaired, or for areas repainted or when original materials are discontinued. 12. Your Builder must assign to you all manufacturers warranties on products included in the Final Sales Price of your Home. Neither the Insurer nor the Administrator shall be liable for your Builder s failure to do so. 13. You are responsible for establishing a written, final walk-through inspection list of items in need of service prior to occupancy or closing, whichever is first. This list must be signed and dated by you and your Builder. Keep a copy for your records. C. Limitation of Liability 1. The Warrantor s liability and obligations are limited to the repair, replacement or the payment of the reasonable cost of repair or replacement of warranted items not to exceed an aggregate equal to the Final Sales Price of the Home listed on the Application For Warranty form or in the absence of an Application for Warranty form, as otherwise provided to the Administrator by the Builder. The choice to repair, replace or make payment is the Warrantor s. 2. Only warranted items which are specifically designated in the Performance Standards are covered by this TRCC Addendum. D. Conditions of Warranty Performance 1. When your request for warranty performance is determined to be a warranted issue, the Warrantor reserves the right to repair or replace the warranted item, or to pay you the reasonable cost of repair or replacement. 2. In Years 1 and 2, if your Builder has filed bankruptcy or is no longer in business and cannot be located during the warranty period, the Administrator will process the request for warranty performance provided you pay a warranty service fee of $250 for each request prior to repair or replacement. 3. If the Administrator elects to award you cash rather than repair or replace a warranted item, the warranty service fee will be subtracted from the cash payment. 4. If the Warrantor pays the reasonable cost of repairing a warranted item, the payment shall be made to you and to any mortgagee or mortgagee s successor as each of your interests may appear; provided that the mortgagee has notified the Administrator in writing of its security interest in the Home prior to such payment. Warrantor shall not have any obligation to make payment jointly to the Purchaser and mortgagee where the mortgagee has not notified your Builder or the Administrator in writing of its security interest in the Home prior to such payment. Any mortgagee shall be completely

11 Section IV. Resolving Disputes bound by any mediation or arbitration relating to a request for warranty performance between you and the Warrantor. 5. Prior to payment for the reasonable cost of repair or replacement of warranted items, you must sign and deliver to the Builder or the Administrator, as appli cable, a full and unconditional release, in recordable form, of all legal obligations with respect to the warranted Defects and any conditions arising from the warranted items. 6. Upon completion of repair or replacement of a warranted Defect, you must sign and deliver to the Builder or the Administrator and WPIC, as applicable, a full and unconditional release, in recordable form, of all legal obligations with respect to the Defect and any conditions arising from the situation. The repaired or replaced warranted item will continue to be warranted by this Limited Warranty for the remainder of the applicable period of coverage. 7. If the Warrantor repairs, replaces or pays you the reasonable cost to repair or replace a warranted item, the Warrantor shall be subrogated to all your rights of recovery against any person or entity. You must execute and deliver any and all instruments and papers and take any and all other actions necessary to secure such rights, including, but not limited to, assignment of proceeds of any insurance or other warranties to the Warrantor. You shall do nothing to prejudice these rights of subrogation. 8. Any Warrantor obligation is conditioned upon your proper maintenance of the Home and grounds to prevent damage due to neglect, abnormal use or im proper maintenance. Page 8

12 SECTION V. The following Performance Standards are applicable only to Warranted Items stated in Section I of 1. FOUNDATIONS AND SLABS RAISED FLOOR FOUNDATIONS OR CRAWL SPACES CONCRETE SLAB FOUNDATIONS, EXCLUDING FINISHED CONCRETE FLOORS 1.1 A crawl space shall be graded and drained properly to prevent surface run-off from accumulating deeper than two inches in areas 36 inches or larger in diameter. Exterior drainage around perimeter crawl space wall shall not allow water to accumulate within ten feet of the foundation for more than 24 hours after a rain except in a sump that drains other areas. 1.2 Water shall not enter through the basement or crawl space wall or seep through the basement floor. 1.3 Concrete floor slabs in living spaces that are not otherwise designed with a slope for drainage, such as a laundry room, shall not have excessive pits, depressions or unevenness equal to or exceeding 3/8 of an inch in any 32 inches and shall not have separations or cracks that equal or exceed 1/8 of an inch in width or 1/16 of an inch in vertical displacement. 1.4 Concrete slabs shall not have protruding objects, such as a nail, rebar or wire mesh. If the crawl space is not graded or does not drain in accordance with the Performance Standard, the Builder shall take such action as is necessary to bring the If water enters the basement or crawl space wall or seeps through the basement floor, the Builder shall take such If a concrete floor slab in a living space fails to meet the stated standard, the Builder shall take action as is necessary to bring the variance within that standard. If a concrete slab has a protruding object, the Builder shall take such action as is necessary to bring the variance within The Homeowner shall not modify improperly the existing grade or allow water from an irrigation system to cause water to accumulate excessively under the foundation. The Homeowner shall not allow landscape plantings to interfere with proper drainage away from the foundation. The Homeowner shall not use the crawl space for storage of any kind. The Homeowner shall not modify improperly the existing grade or allow water from the irrigation system to cause water to accumulate excessively near the foundation. The Homeowner shall not allow landscape plantings to interfere with proper drainage away from the foundation. 1.5 A separation in an expansion joint in a concrete slab shall not equal or exceed 1/4 of aninch vertically or one inch horizontally from an adjoining section. If an expansion joint in a concrete slab fails to meet the standard, the Builder bring the EXTERIOR CONCRETE INCLUDING PATIOS, STEM WALLS, DRIVEWAYS, STAIRS OR WALKWAYS Page Concrete corners or edges shall not be damaged excessively due to construction activities. 1.7 A crack in exterior concrete shall not cause vertical displacement equal to or in excess of 1/4 of an inch or horizontal separation equal to or excess of 1/4 of an inch. If a concrete corner or edge is damaged excessively, the Builder shall take such If an exterior concrete slab is cracked, separated or displaced beyond the Performance Standard, the Builder shall take such action as is necessary to bring the The Homeowner shall not over-water surrounding soil or allow the surrounding soil to become excessively dry. The Homeowner shall not allow heavy equipment to be placed on the concrete.

13 The following Performance Standards are applicable only to Warranted Items stated in Section I of SECTION V. 1. FOUNDATIONS AND SLABS EXTERIOR CONCRETE INCLUDING PATIOS, STEM WALLS, DRIVEWAYS, STAIRS OR WALKWAYS 1.8 The finish on exterior concrete shall not be excessively smooth, so that the surface becomes slippery. 1.9 Exterior concrete shall not contain a protruding object, such as a nail, rebar or wire mesh A separation in an expansion joint in anexterior concrete shall not equal or exceed 1/2 of aninch vertically from an adjoining section or one inch horizontally, including joint material A separation in a control joint shall not equal or exceed 1/4 of an inch vertically or 1/2 of an inch horizontally from an adjoining section Concrete stair steepness and dimensions, such as tread width, riser height, landing size and stairway width shall comply with the Code Handrails shall remain securely attached to concrete stairs Concrete stairs or stoops shall not settle or heave in an amount equal to orexceeding 3/8 of an inch. Concrete stairs or stoops shall not separate from the Home in an amount equal to or exceeding one inch, including joint material. If the finish on exterior concrete is excessively smooth so that the surface becomes slippery, the Builder shall take such If an exterior concrete surface has a protruding object, the Builder shall take such If an expansion joint fails to perform in accordance with the standard, the If a control joint fails to perform in accordance with the standard, the If the steepness and dimensions of concrete stairs do not comply with the Code, the Builder shall take such action as is necessary to bring the variance within the standard for Code compliance. If handrails are not firmly attached to the concrete stairs, the Builder shall take such steps necessary as to attach the rails securely. If the stairs or stoops settle or heave or separate from the Home in an amount equal to or exceeding the standard, A concrete surface that has been designed to be smooth is excepted from this Performance Standard A driveway will not have a negative slope unless due to site conditions, the lot is below the road. If a driveway has a negative slope due to site conditions, it shall have swales or drains properly installed to prevent water from entering into the garage Concrete floor slabs in detached garages, carports or porte-cocheres shall not have excessive pits, depressions, deterioration or unevenness. Separations or cracks in these slabs shall not equal or exceed 3/16 of an inch in width, except at expansion joints, or 1/8 of an inch in vertical displacement. If a driveway has a negative slope that allows water to enter the garage in normal weather conditions, the Builder bring the If a concrete floor slab in a detached garage, carport or porte-cochere does not meet the standards, the Builder shall take such action as is necessary to bring the Page 10

14 SECTION V. The following Performance Standards are applicable only to Warranted Items stated in Section I of 2. FRAMING WALLS 2.1 Walls shall not bow or have depressions that equal or exceed 1/4 of an inch out of line within any 32-inch horizontal measurement as measured from the center of the bow or depression or 1/2 of an inch within any 8-foot vertical measurement. 2.2 Walls shall be level, plumb and square to all adjoining openings or other walls within 3/8 of an inch in any 32-inch measurement. 2.3 A crack in a beam or a post shall not equal or exceed 1/2 of an inch in width at any point along the length of the crack. 2.4 A non-structural post or beams shall not have a warp or twist equal or exceeding one inch in 8- feet of length. Warping or twisting shall not damage beam pocket. 2.5 Exterior sheathing shall not delaminate or swell. 2.6 An exterior moisture barrier shall not allow an accumulation of moisture inside the barrier. If a wall does not meet the standard, the If a wall does not meet the standard, the If a crack in the beam or post fails to meet the standard, the Builder shall take such action as is necessary to bring the If a non-structural post or beam fails to meet the standard, the Builder shall take such action as is necessary to bring the If exterior sheathing delaminates or swells, the Builder shall take such If an exterior moisture barrier allows an accumulation of moisture inside the barrier, the Builder shall take such The Homeowner shall not make penetrations in the exterior finish of a wall that allow moisture to come in contact with the exterior sheathing. The Homeowner shall not make penetrations through the exterior moisture barrier that permit the introduction of moisture inside the barrier. CEILINGS 2.7 A ceiling shall not bow or have depressions that equal or exceed 1/2 of an inch out of line within a 32-inch measurement as measured from the center of the bow or depression running parallel with a ceiling joist. If a ceiling has a bow or depression that is greater than the standard, the Builder bring the SUB-FLOORS 2.8 Under normal residential use, the floor shall not make excessive squeaking or popping sounds. If the floor makes excessive squeaking and popping sounds under normal residential use, the Builder shall take such Page Sub-floors shall not delaminate or swell to the extent that it causes observable physical damage to the floor covering or visually affects the appearance of the floor covering. If a sub-floor delaminates or swells to the extent that it affects the flooring covering as stated, the Builder shall take such action as is necessary to bring the Exposed structural flooring, where the structural flooring is used as the finished flooring, is excluded from

15 The following Performance Standards are applicable only to Warranted Items stated in Section I of SECTION V. 2. FRAMING SUB-FLOORS 2.10 Sub-flooring shall not have excessive humps, ridges, depressions or slope within any room that equals or exceeds 3/8 of an inch in any 32-inch direction. If the sub-flooring fails to meet the STAIRS 3. DRYWALL DRYWALL 2.11 Stair steepness and dimensions such as tread width, riser height, landing size and stairway width, shall comply with the Code Under normal residential use, stairs shall not make excessive squeaking or popping sounds. 3.1 A drywall surface shall not have a bow or depression that equals or exceeds 1/4 of an inch out of line within any 32-inch horizontal measurement as measured from the center of the bow or depression or 1/2 of an inch within any 8-foot vertical measurement. If stair steepness and dimensions do not comply with the Code, the Builder shall take such action as is necessary to bring the If stairs make excessive squeaking and popping sounds under normal residential use, the Builder shall take such 3.2 A ceiling made of drywall shall not have bows or depressions that equal or exceed 1/2 of an inch out of line within a 32-inch measurement as measured from the center of the bow or depression running parallel with a ceiling joist or within 1/2 of an inch deviation from the plane of the ceiling within any 8-foot measurement. If a drywall surface fails to meet the If a drywall ceiling fails to meet the 3.3 A drywall surface shall not have a crack such that any crack equals or exceeds 1/32 of an inch in width at any point along the length of the crack. 3.4 Crowning at a drywall joint shall not equal or exceed 1/4 of an inch within a 12-inch measurement centered over the drywall joint. 3.5 A drywall surface shall not have surface imperfections such as blisters, cracked corner beads, seam lines, excess joint compound or trowel marks that are visible from a distance of 6 feet or more in normal light. If a drywall surface has a crack that exceeds the standard, the Builder shall take such action as is necessary to bring the If crowning at a drywall joint exceeds the standards, the Builder shall take such If a drywall surface fails to meet the Crowning occurs when a drywall joint is higher than the plane of the drywall board on each side. Page 12

16 SECTION V. The following Performance Standards are applicable only to Warranted Items stated in Section I of 3. DRYWALL DRYWALL 4. INSULATION INSULATION 3.6 A drywall surface shall not be out of level (horizontal), plumb (vertical) or square (perpendicular at a 90-degree angle) such that there are variations in those measurements to wall or surface edges at any opening, corner, sill, shelf, etc. shall not equal or exceed 3/8 of an inch in any 32-inch measurement along the wall or surface. 3.7 Nails or screws shall not be visible in a drywall surface. 4.1 Insulation shall be installed in the walls, ceilings and floors of a Home in accordance with the building plan and specifications and the Code. 4.2 Blown insulation in the attic shall not displace or settle so that it reduces the R-value below manufacturer s specifications, the building plans and the Code. If a drywall surface fails to meet the If nails or screws are visible, the builder bring the 4.3 A gap equal to or in excess of 1/4 of an inch between insulation batts or a gap between insulation batts and framing members is not permitted. If the insulation in walls, ceilings or floors is not in accordance with the building plans and specifications and the Code, the Builder shall take such If the blown insulation in the attic reduces, settles or is displaced to the extent that the R-value is below the manufacturer s specifications, the building plans and Code, the Builder bring the If a gap equal to or greater than 1/4 of an inch occurs between insulation batts or a gap occurs between an insulation batt and a framing member, the Builder bring the 4.4 Insulation shall not cover or block a soffit vent to the extent that it blocks the free flow of air. If the insulation covers or blocks the soffit vent, the Builder shall take such 5. EXTERIOR SIDING & TRIM EXTERIOR SIDING Page Exterior siding shall be equally spaced and properly aligned. Horizontal siding shall not equal or exceed 1/2 of an inch off parallel with the bottom course or 1/4 of an inch off parallel with the adjacent course from corner to corner. If siding is misaligned or unevenly spaced and fails to meet the standard, the

17 The following Performance Standards are applicable only to Warranted Items stated in Section I of SECTION V. 5. EXTERIOR SIDING & TRIM EXTERIOR SIDING 5.2 Siding shall not gap or bow. A siding end joint shall not have a gap that equals or exceeds 1/4 of an inch in width. Siding end joint gaps shall be caulked. A bow in siding shall not equal or exceed 3/8 of an inch out of line in a 32-inch measurement. If siding has gaps or bows that exceed the standards, the Builder shall take such 5.3 Nails shall not protrude from the finished surface of siding but nail heads may be visible on some products where allowed by the manufacturer s specifications. 5.4 Siding shall not have a nail stain. 5.5 Siding and siding knots shall not become loose or fall off. 5.6 Siding shall not delaminate. 5.7 Siding shall not cup in an amount equal to or exceeding 1/4 of an inch in a 6-foot run. If a nail protrudes from the finished surface of siding, the Builder shall take such If siding has a nail stain, the Builder bring the If siding or siding knots become loose or fall off, the Builder shall take such If siding fails to comply with the If siding fails to comply with the 5.8 Siding shall not have cracks or splits that equal or exceed 1/8 of an inch in width. If siding fails to comply with the EXTERIOR TRIM 5.9 A joint between two trim pieces shall not have a separation at the joint equal to or exceeding 1/4 of an inch in width and all trim joints shall be caulked. If there is a separation at a trim joint that fails to comply with the standard, the 5.10 Exterior trim and eave block shall not warp in an amount equal to or exceeding 1/2 of an inch in an 8-foot run Exterior trim and eave block shall not cup in an amount equal to or in excess of a 1/4 of an inch in a 6-foot run. If exterior trim or eave block warps in excess of the standard, the Builder shall take such action as is necessary to bring the If exterior trim or eave block cups in excess of the standard, the Builder shall take such action as is necessary to bring the Page 14

18 SECTION V. The following Performance Standards are applicable only to Warranted Items stated in Section I of 5. EXTERIOR SIDING & TRIM EXTERIOR TRIM 5.12 Exterior trim and eave block shall not have cracks or splits equal to or in excess of 1/8 of an inch in average width. If exterior trim or eave block has cracks in excess of the standard, the Builder bring the MASONRY 5.13 Trim shall not have nails that completely protrude through the finished surface of the trim but nail heads may be visible on some products Trim shall not have a nail stain. 6. MASONRY INCLUDING BRICK, BLOCK & STONE 6.1 A masonry wall shall not bow in an amount equal to or in excess of one inch when measured from the base to the top of the wall. 6.2 A masonry unit or mortar shall not be broken or loose. If a nail protrudes from the finished surface of the trim, the Builder shall take such action as is necessary to bring the If trim has a nail stain, the Builder shall take such action as is necessary to bring the Some products specify that the nails be flush with the trim surface. When these products are used, visible nail heads are not considered protruding nails as long as they are painted over. 6.3 A masonry mortar crack shall not equal or exceed 1/8 of an inch in width. 6.4 A masonry unit or mortar shall not deteriorate. If a masonry wall fails to meet the If a masonry unit or mortar fails to meet the standard, the Builder shall take such action as is necessary to bring the If a crack in masonry mortar fails to meet the standard, the Builder shall take such action as is necessary to bring the If a masonry unit or mortar fails to meet the standard, the Builder shall take such action as is necessary to bring the The standard does not apply to natural stone products. 6.5 Masonry shall not have dirt, stain or debris on the surface due to construction activities. 6.6 A gap between masonryand adjacent material shall not equal or exceed 1/4 of an inch in average width and all such gaps shall be caulked. 6.7 Mortar shall not obstruct a functional opening, suchas a vent, weep hole or plumbing cleanout. If masonry fails to meet the standard, the If a gap between masonry and adjacent material fails to meet the standard, the If the mortar obstructs a functional opening, the Builder shall take such The Homeowner shall not put any material into weep holes. Weep holes are an integral part of the wall drainage system and must remain unobstructed. Page 15

19 The following Performance Standards are applicable only to Warranted Items stated in Section I of SECTION V. 7. STUCCO STUCCO 7.1 Stucco surfaces shall not be excessively bowed, uneven, or wavy. If a stucco surface fails to perform as stated, the Builder shall take such action as is necessary to bring the variance within This standard shall not apply to decorative finishes. 7.2 Stucco shall not be broken or loose. 7.3 Stucco shall not have cracks that equal or exceed 1/8 of an inch in width at any point along the length of the crack. 7.4 Stucco shall not deteriorate excessively. 7.5 Stucco shall not have dirt, stain or debris on surface due to construction activities. 7.6 Stucco surfaces shall not have imperfections that are visible from a distance of 6 feet under normal lighting conditions that disrupt the overall uniformity of the finished pattern. If stucco is broken or loose, the Builder bring the If the stucco fails to perform as stated, the If the stucco deteriorates excessively, the If the stucco fails to meet the standard, the the standards. If the stucco fails to meet the standard, the The Builder shall not be responsible for repairing cracks in stucco caused by the Homeowner s actions, including the attachment of devices to the stucco surface, such as, but not limited to, patio covers, plant holders, awnings and hose racks. The Homeowner shall not allow water from irrigation systems to contact stucco finishes excessively. 7.7 The lath shall not be exposed. 7.8 A separation between the stucco joints shall not equal or exceed 1/16 of an inch in width. 7.9 A separation between a stucco surface and adjacent material shall not equal or exceed 1/4 of an inch in width and all separations shall be caulked. If the lath is exposed, the Builder shall take such action as is necessary to bring the If a separation between the stucco joints occurs in excess of the standard, the If a separation occurs between a stucco surface and adjacent material occurs in excess of the standard or if such a separation is not caulked, the Builder bring the Page 16

20 SECTION V. The following Performance Standards are applicable only to Warranted Items stated in Section I of 7. STUCCO STUCCO 7.10 Stucco shall not obstruct a functional opening, suchas a vent, weep hole or plumbing cleanout. If stucco obstructs a functional opening, the Builder shall take such 8. ROOFS ROOFS 7.11 Stucco screed shall have a minimum clearance of at least 4 inches above the soil or landscape surface and at least 2 inches above any paved surface Exterior Installation Finish Systems (EIFS) stucco screed shall clear any paved or unpaved surface by 6 inches. 8.1 Flashing shall prevent water penetration. 8.2 The roof shall not leak. If the stucco screed clearance does not meet the standard, the Builder shall take such If the EIFS stucco screed clearance does not meet the standard, the Builder shall take such action as is necessary to bring the 8.3 A vent, louver or other installed attic opening shall not leak. If the flashing fails to meet the standard, the If the roof fails to meet the standard, the If a vent, louver or other installed attic opening fails to meet the standard, the The Builder shall not be responsible for leaks caused by extreme weather. The Builder shall not be responsible for leaks caused by extreme weather. The Homeowner shall perform periodic maintenance to prevent leaks due to build-up of debris, snow or ice. The Homeowner shall take such action as is necessary to prevent downspouts and gutters from becoming clogged. The Builder shall not be responsible for leaks caused by extreme weather. 8.4 A gutter or downspout shall not leak or retain standing water. After cessation of rainfall, standing water in anunobstructed gutter shall not equal or exceed 1/2 of an inch in depth. If a gutter or downspout fails to meet the The Builder shall not be responsible for leaks caused by extreme weather. The Homeowner shall maintain and clean gutters and downspouts to prevent buildup of debris or other obstructions. 8.5 Shingles, tiles, metal or other roofing materials shall not become loose or fall off in wind speeds less than those set forth in the manufacturer s specifications. If the shingles, tiles, metal or other roofing materials fail to meet the Page A skylight shall not leak. If a skylight fails to meet the standard, the