Warranty Letters and When the Warranty Clock Starts

Why this matters

On a construction job there is rarely one warranty. There is the contractor's promise to come back and fix defective work, and there is the manufacturer's promise to replace a failed part, and the two clocks start on different days for different reasons. A shop that assumes they line up finds out the hard way: a compressor fails in month eleven of the owner's first year, the owner calls you because your letter says one year, and the manufacturer says its coverage ended a month ago because it counted from startup during construction. The gap is yours to pay for in labor and parts unless you saw it coming and closed it.

The two promises, defined

Contractor correction period. The period after the work is accepted during which the contractor must return and correct work found not to conform to the contract documents. Commonly one year. Under the AIA A201 general conditions, in the edition the contract incorporates, the correction period runs one year from the date of substantial completion (Section 12.2 in the 2017 edition). Other contract forms and owner-written contracts set their own term and start, so read the general conditions and Division 01 of the spec book, usually a section titled Warranties or Closeout Procedures. In substance, A201 also says the correction period does not shorten the owner's time to bring other claims, which is a separate question governed by state law. That boundary is a legal one for your attorney, not something this card resolves, and this is not legal advice.

Manufacturer warranty. The factory's promise on its product: parts, sometimes a compressor or heat exchanger for longer, rarely labor. It is written by the manufacturer, not the contract, and its start date is whatever the manufacturer's warranty document says. The contract can require you to deliver it, but it cannot move its start date.

Special or extended warranty. A spec section sometimes requires a longer warranty on a specific product (a roof membrane, a compressor, a variable-frequency drive), often with a form the manufacturer signs. Those sections usually sit in Part 1 of the product's own spec section under a heading like Warranty or Special Warranty. See related: The Three-Part Spec Section: General, Products, Execution.

Where each clock commonly starts

Substantial completion is the date the architect or owner certifies the work is complete enough for the owner to occupy or use it for its intended purpose, with only punch list items left. It is a document, usually a signed certificate with a date on it, not a feeling. The contractor's correction period commonly starts there for the whole project.

Two exceptions to watch, both written into the contract when they exist:

• Phased occupancy. An owner who moves into one area early may get a separate substantial completion date for that area, and the correction period for that area starts then.
• Work completed after substantial completion. Punch list items and items finished late commonly get their own correction period starting when they are actually completed. A201 handles this explicitly in substance; other contracts may not.

Manufacturer warranty start dates vary by product and by maker, and the document governs. Common patterns:

A commonly seen commercial form runs 12 months from startup or 18 months from shipment, whichever comes first. Treat that as a pattern to recognize, not a figure to assume: read the warranty certificate that ships with the unit, or ask the manufacturer's representative for it before you order.

Registration windows. Many residential warranties pay a longer term only if the product is registered within a short window after installation. If nobody registers it, the product commonly falls back to a shorter base term. That is a task with a deadline, and it belongs on the closeout checklist with an owner and a date.

The warranty letter itself

At closeout the contractor commonly issues a letter on its own letterhead stating what it warrants, for how long, and from when. The spec may prescribe a form; if it does not, this is the shape. Each field is there because someone will read it a year later trying to decide who pays.

[SHOP LETTERHEAD]
Date: June 20
To: Owner, c/o Architect of record

Project:  Suite 210 Tenant Improvement
Contract: Mechanical, Div 23 scope per bid
Spec ref: 01 78 36 Warranties

We warrant the work of our contract against
defects in materials and workmanship for ONE
YEAR from the Date of Substantial Completion,
June 14, as stated on the certificate of
substantial completion.

Punch items completed after that date carry
one year from their own completion date,
listed on the attached schedule.

Manufacturer warranties are separate and run
on the manufacturer's terms. Certificates,
startup reports and registration records are
in the O&M manual, Tab 4.

RTU-1  factory start basis: startup Apr 24
       (startup report, Tab 4)

Signed: [Name], [Title]

Read the letter field by field:

• The start date is a date, not a phrase. "One year from substantial completion" with no date invites an argument about which document set it. Copy the date off the signed certificate.
• The scope is named. "Work of our contract" tied to the bid scope stops the letter being read as a warranty over other trades' work.
• Manufacturer terms are disclaimed as separate, so nobody reads your letter as converting a factory parts warranty into a contractor promise. Whether that sentence fully limits your exposure is a contract and state-law question for your attorney; operationally, it puts the two promises on paper as two.
• Late items have their own dates, on an attached schedule.
• The O&M tab is named, so the facility manager finds the startup report without calling you.

Where O&M manuals fit

The operation and maintenance manual is the binder (or file set) the owner keeps: product data, maintenance instructions, parts lists, warranty certificates, startup reports, test and balance report, and the contractor's warranty letter. For warranty purposes it does two jobs.

It holds the evidence of each start date. A startup report signed and dated by whoever started the unit is the document that tells the manufacturer when its clock began. Without it, many manufacturers fall back to the shipment or manufacture date, which is earlier and costs coverage.

It holds the maintenance conditions. Many manufacturer warranties require the owner to maintain the equipment (filter changes, water treatment on a boiler). The O&M is how the owner was told. Assembling the binder is covered elsewhere; see related: How to Assemble a Closeout Package.

Worked example: the gap between two clocks

A tenant improvement includes one new rooftop unit, RTU-1. The dates as they actually happened:

• Unit shipped: March 1
• Set on curb: April 10
• Started up by the shop, with a signed startup report: April 24, because the GC wanted temporary heat and ventilation while drywall finished
• Substantial completion certificate signed: June 14

The unit's warranty certificate reads 12 months from startup or 18 months from shipment, whichever comes first.

Factory clock. Startup plus 12 months is April 24 next year. Shipment plus 18 months is September 1 next year. Whichever comes first: April 24 next year.

Contractor clock. One year from substantial completion: June 14 next year.

The gap. From April 24 to June 14 next year is 30 days to May 24 plus 21 days to June 14, so 51 days. In those 51 days a failed compressor is a defect inside your correction period with no factory parts coverage behind it. The owner calls you, correctly, and you buy the compressor.

Why the gap opened. Running the unit during construction started the factory clock early. Temporary use also exposes the unit to drywall dust, which is a second issue: some warranties exclude damage from operation during construction, or require filters changed before turnover. That is in the certificate's exclusions, which is one more reason to read it before agreeing to temporary conditioning.

What closes it. Four options, roughly in order of how early you have to act:

1. Decline temporary use, or agree to it only with a change order that covers the warranty gap.
2. Ask the manufacturer before startup whether it will issue a letter setting the warranty start at substantial completion. Some will for a commercial job if asked in advance, sometimes for a fee; few will after the fact.
3. Price an extended parts warranty to cover the gap and carry it in the bid or the change order.
4. Disclose the gap in the warranty letter, stating the factory start date beside your own, so the owner knows which months carry which coverage. That does not remove your obligation; it removes the surprise.

What would change the answer.

• Substantial completion slips. Same startup, but the certificate is signed October 1. The factory clock still ends April 24 next year (startup plus 12 still beats shipment plus 18, September 1), and your clock now ends October 1 next year. The gap grows to 160 days: April 24 to May 24 is 30, then 31, 30, 31, 31 to September 24, then 7 to October 1. A late project with early startup is the worst case, and it is the common one.
• No startup report exists. The manufacturer falls back to the shipment basis, 18 months from March 1, which is September 1 next year, unless its document says manufacture date. That basis is later than the startup basis in this case, but you cannot pick it: you are at the mercy of whatever the manufacturer can prove, and you cannot prove anything.
• The unit is started at turnover instead. Startup on June 12, two days before substantial completion. Factory clock ends June 12 next year, two days before yours. Close enough that a written start-date letter from the manufacturer usually aligns them.

How to check you have this right

Before you sign the warranty letter, put three dates side by side for each piece of warrantable equipment: the substantial completion date from the certificate, the factory start date from the startup report or the certificate's basis, and the factory end date computed from the certificate's own terms. Any piece where the factory end comes before your correction period end is a gap. Write the gap into the letter or close it with the manufacturer, and record which you did in the job file. Then confirm every registration window has been met, with the confirmation in the O&M. Do it while you still have the startup technician's name and the bill of lading in the job folder.

References

• AIA A201 General Conditions of the Contract for Construction, in the edition your contract incorporates: Section 12.2, correction of work after substantial completion
• The manufacturer's warranty certificate and startup requirements for each product, which govern its start date
• See related: How to Assemble a Closeout Package
• See related: The Three-Part Spec Section: General, Products, Execution
• See related: The Punch List: Finishing the Last 10 Percent