Can a Home Warranty Be Transferred?

Home warranties protect homeowners from unexpected repair or replacement costs for major systems and appliances that fail due to normal wear and tear. These contracts cover items such as HVAC systems, plumbing, electrical wiring, and kitchen appliances, offering financial predictability against common household breakdowns. A common question in property transactions is whether these warranties can be transferred to a new owner. Home warranties are generally designed with transferability in mind, a feature that can significantly benefit both sellers and buyers in a real estate exchange.

General Transferability Principles

Most home warranties are transferable because they are tied to the property itself, rather than the original homeowner. This ensures coverage remains with the residence, providing continuous protection for its systems and appliances. This transferability streamlines real estate transactions, offering an added layer of assurance to prospective buyers. When a home is sold, the existing warranty can be passed along, providing peace of mind that unexpected repair expenses for covered items will not immediately fall to the new owner.

For a home warranty to be transferred, the policy must be in good standing and within its active term. The new property owner must also accept the terms and conditions of the existing policy. While transferability is a common feature across providers, procedures and requirements may vary slightly depending on the specific warranty company.

Information Needed for Transfer

Before initiating a home warranty transfer, gather specific information and documentation. The existing home warranty policy number and contract details are necessary to identify the coverage. Contact information for the home warranty provider should also be available, as they are the primary point of contact for the transfer process.

The full name and complete contact information of the new property owner(s) are required. The closing date of the property sale is also a critical piece of information for the transfer. Warranty providers often have specific forms for transfers, which can typically be obtained from their website or by contacting customer service. These forms will require accurate completion using the gathered details, ensuring a smooth transition of coverage.

Executing the Transfer Process

Once information and forms are prepared, complete the transfer. The home warranty provider can be contacted through various methods, including a direct phone call, an online portal, or mail. Submitting the completed transfer forms along with any other required information, such as proof of sale, is the core of this procedural step.

Some home warranty providers may charge a small fee for the transfer of coverage. These fees can range from approximately $25 to $99, depending on the company and the specific policy, though some providers may not charge a transfer fee at all. After submission, the process involves a review by the warranty company, followed by a confirmation of the transfer and the issuance of updated policy documents to the new homeowner. This typically occurs within a few days to a couple of weeks, ensuring the new owner receives timely confirmation of their coverage.

Implications of Non-Transfer

If a home warranty is not transferred during a property sale, the coverage becomes void or inactive upon the change of ownership. This means the warranty no longer protects the property, and the new homeowner will not be able to file claims for repairs or replacements under that policy. The new owner would then be responsible for the full cost of any system or appliance breakdowns, potentially needing to purchase a new warranty to regain protection.

For the seller, failing to transfer a home warranty can mean missing out on a marketing advantage, as an active warranty can enhance a home’s appeal to buyers. The absence of coverage could also lead to buyer dissatisfaction if issues arise shortly after moving in, potentially impacting post-sale relations. Without a transfer, the benefits of the existing warranty are lost to both parties.