What is a transferable guarantee?
A transferable guarantee is an assurance from a contractor, service provider or manufacturer that certain work will meet set standards and stay free from defects for a specified period, and which can pass to a new owner when the property is sold. The new owner then has the same cover as the original owner.
These guarantees typically cover the cost of repairs or replacements if the work fails within the guarantee period. The areas most commonly covered are:
- Roofing: materials and workmanship, so that the roof stays watertight and structurally sound.
- Structural repairs: work to structural elements such as foundations, walls and beams.
- Remedial damp works: damp proofing and treatments to prevent or address damp.
Why do transferable guarantees matter to a buyer?
They matter because roofing and damp works can be costly to repair, and a valid guarantee means significant work done by the previous owner is still under warranty. The main benefits are:
- Financial cover: if a defect covered by the guarantee arises, the guarantee may cover the cost of repairs or replacements, subject to its terms and exclusions.
- Reassurance: knowing that major works are covered reduces uncertainty about future issues.
Buying a home with an older roof? Get a survey price for the home you are buying.
What types of transferable guarantee are there?
The three types most often met when buying a property are roofing, damp proofing and remedial works guarantees. Their typical lengths, as given when this guide was first written, are set out below.
| Type | What it covers | Typical duration | Points to check |
|---|---|---|---|
| Roofing | Materials and workmanship in roofing repairs or installations | Often 10 to 25 years, depending on the materials used and the contractor's policies | Material cover, workmanship cover, transferability |
| Damp proofing | Works carried out to prevent or remediate damp | Typically 10 to 30 years | Scope of work, duration, transferability |
| Remedial works | Repairs and improvements such as structural repairs and timber treatments | As stated in the guarantee | Which works are covered, duration, transferability |
Damp proofing guarantees matter because damp can cause significant structural damage and health issues if not properly addressed.
What are the risks with transferable guarantees?
The three main risks are that the company goes bust, that it phoenixes, or that the guarantee has become invalid.
The company goes out of business
If the company that gave the guarantee ceases trading, the guarantee may become worthless. To reduce this risk:
- Research the company, looking for a long-established firm with a solid reputation and financial stability.
- Check whether the guarantee is insurance-backed. With an insurance-backed guarantee, the insurance policy may cover the cost of necessary repairs if the company goes bust, subject to its terms. Verify the details of the policy.
The company phoenixes
Phoenixing is often done to avoid liabilities, and it can leave a buyer without the cover they thought they had. To reduce this risk:
- Investigate the company's history for signs such as frequent name changes or a pattern of dissolving and re-forming.
- Consider guarantees provided by independent third parties rather than the contractor, as these are less likely to be affected by the contractor's business practices.
The guarantee has become invalid
A guarantee can become invalid through improper maintenance, unauthorised alterations or failure to follow its terms and conditions. To reduce this risk, read and understand the terms and conditions and comply with them, keep detailed records of maintenance, repairs and alterations, and take advice from a surveyor or legal adviser on what the guarantee requires.
How do you check a transferable guarantee is valid?
Obtain the full guarantee documentation from the seller, read the terms, confirm transferability and then confirm everything in writing with the issuing company.
- Obtain the documents. Ask for the original guarantee certificate, any associated insurance policies, proof of the work completed (invoices and contracts), any correspondence with the contractor, and any transfer forms the provider requires. Check the documents are complete and up to date.
- Read the terms and conditions. Note the duration, what specific issues or defects are covered, and any conditions or exclusions that could void the guarantee.
- Check the expiry date. The guarantee should still be valid and give cover for a reasonable period after the purchase.
- Confirm transferability. Not all guarantees are transferable. Some set conditions for transfer, such as notifying the issuing company, paying a transfer fee, completing a transfer form or providing proof of purchase.
- Contact the issuing company. Ask for written confirmation that the guarantee is still valid, and for details of the process for transferring it to a new owner.
- Complete the transfer. Follow the provider's instructions carefully when putting the guarantee into the new owner's name.
What does a guarantee usually exclude?
Guarantees vary widely in scope, and most carry exclusions and limitations that affect what is covered. For example, a roofing guarantee may cover materials and workmanship but exclude damage caused by severe weather. Common exclusions include:
- damage caused by neglect;
- unauthorised alterations;
- natural wear and tear.
A buyer should also understand the claim process: the steps to take and the documentation needed to support a claim.
How do you investigate the contractor behind a guarantee?
The reliability of a transferable guarantee is closely tied to the credibility of the contractor who issued it, so check its reputation, credentials, insurance and history.
- Reputation: look at online reviews on sites such as Trustpilot, Google Reviews and social media, and at reviews, testimonials or case studies of the contractor's previous work.
- Trade associations: check membership of reputable bodies such as the Federation of Master Builders (FMB) or the National Federation of Roofing Contractors (NFRC), or the Property Care Association (PCA) for damp proofing specialists.
- Certifications: industry certifications such as ISO 9001 for quality management.
- Insurance: public liability insurance, covering damage caused during the work, and professional indemnity insurance, covering professional negligence.
- Company history: how long the company has been in business, signs of financial instability such as late filings with Companies House, and whether it has operated under previous names. Companies House can be used to check a company's history, including recent name changes.
Is the work covered by the guarantee any good?
The guarantee does not tell a buyer whether the work was done well, so the work itself should be inspected by a qualified surveyor. The surveyor can assess the quality of the roofing, structural repairs or damp works and identify potential issues.
The work should also comply with relevant building regulations and standards. Non-compliance can affect both the validity of the guarantee and the safety of the property.
What to do next
- Request information about any transferable guarantees at the start of negotiations, so issues come to light early.
- Include a clause in the sale agreement requiring the seller to provide all guarantee documentation and complete the transfer process.
- If there are concerns about validity or transferability, or a guarantee is near its end, negotiate: this may mean further documentation, repairs or improvements, a price reduction, additional assurances, or a retention of funds until the transfer is complete.
- After purchase, maintain the property, carry out repairs promptly and comply with the guarantee's terms so it stays valid.
- Keep detailed records of all maintenance, repairs and communications related to the guarantees, in case of a claim or dispute.
What a survey can — and cannot — tell you
A building survey provides an informed assessment of the visible condition of a property. Inspections are non-intrusive and limited to areas that are accessible at the time of inspection.
A survey can identify issues with the property, including those related to roofing and damp works. This helps a buyer judge whether the guarantees are likely to be needed and whether the guaranteed work was carried out to a good standard. Surveyors can also assist in checking guarantee documentation and advise on the implications of the guarantees.
- The visible condition of roofing work covered by a guarantee.
- Visible signs of damp in areas where damp proofing has been carried out.
- Visible evidence of structural repairs to elements such as walls and beams.
- Points in the guarantee documentation that need clarifying with the issuer or a legal adviser.
However, there are limitations to what a survey can determine without intrusive investigation.
- A survey cannot confirm that a guarantee is valid or transferable; only the issuing company can confirm that in writing.
- Work hidden within walls, floors or foundations cannot be inspected without opening up.
- A survey cannot confirm the financial stability of the contractor or guarantee provider.
Where higher-risk indicators are identified, further specialist or intrusive investigation may be recommended.
Frequently asked questions
How long do roofing and damp proofing guarantees last?
Roofing guarantees often run from 10 to 25 years, depending on the materials used and the contractor's policies. Damp proofing guarantees typically run from 10 to 30 years.
What happens to a guarantee if the company goes bust?
If the company ceases trading, the guarantee may become worthless. An insurance-backed guarantee is different: the insurance policy may cover the cost of necessary repairs if the company goes bust, subject to its terms.
What is a phoenix company?
A phoenix company is a new company that emerges from the collapse of another, often with the same directors and assets but without the liabilities. It may not honour guarantees issued by the previous company.
Can a guarantee become invalid?
Yes. Improper maintenance, unauthorised alterations or failure to follow the terms and conditions can all invalidate a guarantee.
Is there a fee to transfer a guarantee?
Some guarantees require a transfer fee, as well as notifying the issuing company, completing a transfer form or providing proof of purchase. The guarantee's terms set out what is needed.
What if the guarantee is about to expire?
If a guarantee is nearing its end, a buyer can negotiate with the seller for additional assurances or a price reduction.
