Selling a home or investment property comes with a long list of considerations, and one that is often overlooked is the transferability of the building warranty. Also known as warranty insurance, this form of protection offers coverage against structural defects and construction-related issues. For new buyers, it can be a major reassurance. For sellers, it can make a property more attractive on the market. But can this insurance be transferred when ownership changes hands? Let’s explore how warranty insurance works and whether it can follow the property to its new owner.
Understanding Building Warranty Insurance
Purpose and Coverage
Building warranty insurance is designed to protect homeowners and property buyers from faults that may arise due to defective materials, poor workmanship, or failures in the construction process. It typically covers structural elements such as foundations, walls, roofs and load-bearing components. Depending on the provider and policy, it may also include cover for weatherproofing issues, drainage defects, or builder insolvency if the home is not yet completed.
This type of insurance is particularly vital for newly built or recently converted properties. It provides confidence that, should a problem arise that meets the terms of the policy, the repair costs will not fall to the property owner.
Duration of Warranty Periods
Most building warranty policies in the UK last for 10 years from the point of practical completion. The coverage is generally split into two key periods:
- The first two years, during which the builder is responsible for addressing faults.
- The remaining eight years, which typically cover only major structural defects and exclude minor or cosmetic issues.
Some providers offer extended policies that cover up to 12 years or include extra protections for elements like waterproofing or mechanical systems.
Who Typically Holds the Policy
The original policyholder is usually the developer or builder, who takes out the warranty during the construction phase. Once the property is completed and sold, the benefit of the warranty typically transfers to the first homeowner. From that point, subsequent owners may also be eligible to inherit the policy, depending on the provider’s terms.
Transferability of Warranty Insurance
Can It Be Transferred to a New Owner?
In most cases, yes, warranty insurance is transferable to a new owner. This is especially important when the home is being sold within the warranty period. The new owner inherits the remaining years of cover, offering them the same protection the original owner had.
However, transfer terms vary between warranty providers. Some make it automatic, while others require the new owner or the seller to notify the insurer and pay a transfer or administration fee.
Situations Where Transfer Is Automatic
For many well-known providers such as NHBC, LABC Warranty and Premier Guarantee, the warranty automatically transfers to a new owner as long as the property changes hands through a standard legal sale. The buyer simply receives the existing warranty documentation from the seller or conveyancer.
This seamless process helps maintain continuous coverage and ensures that there are no gaps in protection as ownership changes.
When Transfer Requires Action or Approval
In some cases, a formal transfer process may be necessary. The provider may request that the new owner registers their details with the insurer, particularly if there is an online customer portal or a claim-tracking system.
Some warranty policies may charge a modest transfer fee, or the insurer might require proof of sale before updating the policyholder information. If you’re unsure, it’s always worth contacting the provider directly to confirm what’s needed.
How to Transfer the Warranty
Required Documentation
To ensure a smooth transfer, the following documents are commonly required:
- A copy of the property’s original warranty certificate
- The completion or handover certificate from the developer
- Details of the buyer and seller, including the date of sale
- Any supporting paperwork from solicitors or conveyancers
This paperwork ensures that the insurer has accurate information and can maintain an up-to-date claims record for the property.
Steps the Seller Needs to Take
If the transfer isn’t automatic, the seller should notify the warranty provider in writing or through the provider’s online portal. They should provide the buyer’s name, sale date, and property address.
Some providers request that the seller includes proof of ownership and a copy of the sale agreement. It’s also good practice to pass all warranty documents to the buyer before completion.
Responsibilities of the Buyer
Buyers should ask their solicitor or conveyancer to confirm the status of the building warranty early in the purchase process. Once the sale is completed, the buyer may need to register their details with the warranty provider to ensure smooth communication and eligibility for claims.
It’s also wise for the buyer to familiarise themselves with the policy terms, especially the remaining coverage duration and any conditions or exclusions.
Legal and Regional Considerations
Transfer Rules by Country or Region
In the UK, there is no universal law requiring warranty insurance to be transferable, but most providers include transfer provisions as standard. In devolved regions such as Scotland and Northern Ireland, processes are broadly similar but may involve different legal documentation or regulatory frameworks depending on the conveyancing system.
If you’re buying or selling a property outside England and Wales, consult a local legal advisor to understand the regional specifics.
Builder or Insurer-Specific Policies
Some developers work with bespoke or smaller warranty providers that have unique transfer rules. These policies might require more paperwork or formal registration steps compared to mainstream providers.
Always check with the original developer or insurer to confirm whether a transfer is permitted and what the conditions are. Some warranties are non-transferable in specific circumstances – such as when a property has been significantly altered since the warranty was issued.
Common Issues and Tips
Avoiding Gaps in Coverage
One of the biggest risks when transferring a building warranty is allowing coverage to lapse. This can happen if documentation isn’t properly passed on, or if the new owner fails to register with the provider when required.
Buyers should double-check that the policy remains valid and active before completing the purchase, particularly on properties under 10 years old.
Checking the Warranty Before Finalising a Sale
Sellers should review the warranty policy before marketing the property. Ensure the paperwork is complete, up to date and available for the buyer’s solicitor. Providing clear evidence of warranty insurance can make the sale smoother and more attractive to potential buyers.
Communicating with the Warranty Provider
Good communication is key. If either party has concerns or questions, contacting the warranty provider directly can help clarify the process and prevent unnecessary delays. Many providers offer dedicated customer service teams for warranty transfers, making the process easier to manage.
Why Warranty Transfer Matters
Transferring warranty insurance when selling a property ensures continued protection for the new owner and preserves the value of the original policy. It can significantly impact the resale value, marketability and peace of mind for all parties involved.
A lapse in cover or lack of proper documentation could lead to claims being rejected down the line, even for faults that should be covered under the original warranty.
Key Takeaways for Buyers and Sellers
For sellers, confirming the warranty status early and passing on accurate information helps ensure a smooth transition. For buyers, checking the policy terms and confirming transfer conditions can safeguard your investment.
If you’re unsure about the process, working with a solicitor and contacting the warranty provider directly will help you stay on the right path. BuildSafe can also provide advice and connect you with recognised providers offering transferable building warranty insurance tailored to your property type – contact us today to find out more.
