Having a Builder’s Warranty in Portugal: An Overview

Updated: April 19, 2023

If you are looking to construct a new building in Portugal – a stunning villa in the Algarve or a charming countryside house in the depths of the Alentejo – then this article is for you. When building a property, you’ll want to have an assurance that the property works will be carried out well and that you are safeguarded from costly issues further down the line – this is where having a builder’s warranty comes in.

Yes, having a builder’s warranty can be a lifeline to ensure that your transition to life in Portugal is hassle-free – at least when it comes to your property. There can be nothing worse than having construction works on your property and then facing major structural defects at a later date.

In this article, we’ll run over what a builder’s warranty is, what it includes, and why you should definitely consider having one if you are thinking about carrying out construction work in Portugal.

What is a builder’s warranty?

If you are considering taking out a builder’s warranty, the first thing is to understand what it is and whether you may require one. Simply put, a builder’s warranty is an insurance policy that is provided by the builder on property constructions. A builder’s warranty will state that they are liable to address the structural defects for a two-year or five-year period (or other specified time period) from the handover date. You can also get a one year builder’s warranty.

Builder’s warranties have become more commonplace recently. There are numerous cases where homebuyers have reported major structural defects with their properties after building works have been carried out, sometimes even being reported months or years after the construction works were completed.

These include leakages, seepage issues, and dampness and are indications that there are structural issues with the new home and that construction mandates were not followed accurately when the building work was carried out.

A builder’s warranty usually comes with new home constructions or when you are remodeling your property. Typically, a home builders warranty covers items that are a permanent part of the home, such as electrical work, plumbing, and concrete floors. It is quite usual for built homes to come with a builder’s warranty

The Importance of Taking out a Builder's Warranty

If you have construction works and there are inherent issues with the structural and building works, this can cause no end of hassle and inconvenience in the coming years.

Home builders warranties are a means of assurance and include the maintenance of necessary services and the repair or replacement of some elements in the home if structural and building issues are discovered in the years following the construction works.

A builder’s warranty protects property buyers and includes insurance against potential structural deficiencies in the years after the construction is completed. This includes building companies providing maintenance, repair, and replacement services.

In Portugal, it is not uncommon for new houses to come with defects, usually associated with errors in design and execution. It’s, therefore, a good idea to opt for a builder’s warranty.

Builder's Warranty: Inclusions and Exclusions

In this section, you will find a comprehensive list of what is usually included and excluded in a builder’s warranty. The excluded list normally forms a part of the builder’s warranty with something along the lines of “in the case of a defect, then the buyer will be the responsible party for its maintenance and repair.”

What is usually included in a builder’s warranty?

Concrete foundations
Floors
Heating and cooling systems in the property
Garage doors
Septic systems
Painting jobs on the property
Doors and windows
The roof and sidings of the property
Plumbing works
Electrical works
Dry basement

What is usually excluded from a builder’s warranty?

Expansion and shrinking of the property
Normal fading of paint over time
Insect damage
Problems caused by weather
Minor cracks in the house
Condensation and dampness arising from inadequate ventilation in the property. It is important that homeowners maintain adequate ventilation in their properties.
Defects arising from work conducted by the homeowner after the builder’s works were completed
Household appliances

The quality of work carried out on real estate projects in any country is a serious concern for homeowners or potential property buyers – and in Portugal, this is no different.

Providing a safety blanket against poor construction benefits the buyer. The seller is also encouraged to keep up with the quality of their projects, not least because a property in good condition will sell for a higher price, so it is in their best interests to invest in the property for long-term gains.

How to Guard Against Poor Building Works

There is a whole assortment of issues that can arise from poor property works, from structural deficits to plumbing works not running as they should. In this section, we’ll delve into how to guard against poor building works.

Issues with building works are more common than you may imagine, and to alleviate a potential headache further down the line, here are some important factors that you should be aware of right from the get-go.

Before construction starts

When you are looking for a building contractor, make sure that you are well-informed about the company. Take a look at their credentials, get quotes, and speak with them to ensure that they are able to carry out the work that you would like them to do.

Next, ask the company to put together a list of all the jobs that need to be performed, the price to be paid for each job, and the materials that will need to be purchased. This should be included in the price.

This quote should include the time frame in which the work will be carried out and the form of payment (e.g., down payment, 50 percent at the beginning and 50 percent at the end, etc.). This should all be put down in writing.

And, importantly, always ensure you have the invoice or receipt, as this will protect you in case of a later claim. Also, be sure to ask about the possibility of a builder’s warranty and what this will cover. Home builders warranties cover different things, so make sure you have a clear understanding of what will – and will not – be covered. Some companies may not speak a good level of English, so it is worth seeking assistance from a Portuguese-speaking expert who can help ensure that everything is in order.

Most common problems

When looking to hire a construction company, you’ll want to be aware of the most common problems that can crop up when having building works done.

The most common situation is when the work is carried out after the agreed deadline, but it can also happen when the contractor abandons the work, leaving the owner in a difficult position where they will need to find a new company to complete the building works.

Other instances include cases where work is completed and defects are only detected at a later date. This is where having a builder’s warranty can prove to be a lifesaver, as, depending on the problem, they will be able to replace and repair the problematic defect.

There is also the possibility that the property owner is charged more than the previously agreed price, usually justified by the contractor stating that extra work needed to be carried out. You should be cautious and aware that you should always be informed and only allow modification of the contract, no matter how small, with your expressed consent.

You should also be aware that the contractor cannot charge you for transport, materials, work hours, or other expenses to repair any issue that they themselves have caused.

Double-check the building works

Even if you have a builders warranty, it can be worth hiring an expert to inspect the building works after they are complete. You should not accept the building works without first checking that the terms in the contract have been met and the building works carried out to your satisfaction.

Goldcrest: How We Can Help You

Goldcrest is a local buyer’s agent based in Lisbon that provides insightful real estate expertise and strategic advice. From sourcing to property acquisition, we offer a tailor-made service for our clients, assisting them in identifying outstanding investment opportunities in some of Portugal’s finest locations, from relocation to investment projects.

We are more than happy to help you on your property-buying journey – contact us today!

If you are contemplating investing in Portugal or securing your dream home here, the following articles may be of interest to you:

Frequently Asked Questions about the Builder’s Warranty in Portugal

What is the difference between a builders warranty and a home warranty?

A home warranty is purchased by the homeowner and will cover the essential appliances and systems in your home. A builder’s warranty, on the other hand, is provided by a builder or from a third-party provider. Builder warranties have become more common in recent years.

Both are good options for homeowners insurance, as warranty cover can protect against inconvenient costs and hassle further down the line. Home builder warranties are concerned with ensuring the construction works are carried out well and that you will be provided with repairs for inadequate building works – almost like a structural warranty. On the other hand, a home warranty covers essential appliances and systems within the house.

What is a typical building warranty?

Your typical standard home building warranty should include the following: Workmanship, distribution systems, and building materials for a specified time period. Warranty coverage for many new building warranties include ductwork, plumbing, and electrical systems.

What does a builder warranty cover?

A home builders warranty usually includes the following: Major structural components, concrete foundations, floors, heating and cooling systems in the property (e.g., air conditioning), garage doors, septic systems, painting jobs on the property, doors, windows, roof framing, sidings of the property, plumbing works, and electrical systems.

Builder warranties have become more common in recent years. If you are considering conducting construction works or building a newly constructed home, we recommend ensuring builder warranties. Home builders warranties will protect you against major structural defects in the future.

Can you buy a house without a builders warranty?

No, but a builder’s warranty is becoming increasingly common. Homebuyers want to save money, have reassurance, and protect against property devaluation, which is why having a builder’s warranty is a good idea if you are building a newly constructed home or having building works done on your property. For example, if, at a later date, you discover a major structural defect, most home builder warranties will protect against this eventuality.

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