I am going to let you in on a little secret when buying a home: Oftentimes, when there is a dispute on an inspection issue, the easiest fix is to have the seller pay for a home warranty to get the deal closed. This may have been sold to you as a great idea, and if you are buying the home for yourself to live in, it's better to have one than not. Over the years, however, I have heard numerous complaints about these companies finding a way to not cover items that are thought to be covered.
One recent example was an A/C breakdown that the home warranty company denied, because the owners could not prove they had their vents cleaned this year. And this is precisely the first reason why we do not use home warranties for repairs of our rental units. It creates a huge burden on the owners of the properties to keep paperwork and receipts around much longer than they would want to. And if one gets lost, they may not be able to get a repair covered!
Which brings us to point number two: These warranties take a really long time to approve a claim and send someone out to do the repair. It can take 4 to 6 weeks for someone to review the file and determine if the claim will be serviced or not by their service techs. And in that time, tenants are becoming extremely unhappy!
Many service people with home warranties is our third strike against them. The service companies they hire may not be the best at their job, we can’t screen them to make sure we aren’t letting criminals into our clients' homes, and we can’t guarantee they show up on time... or at all!
Now, there are some policies that are good. If you are buying a home to live in, do your research and get a plan with 5-star reviews if you can find one. When it comes down to it, you may be willing to sit in a home with no A/C for a few weeks because the temperatures dropped. But, if it's gonna be 100 degrees out, you can make the choice to just get it fixed and pay for it. Tenants of properties, where the owner wants to use a home warranty, don’t have that choice. And by making them wait for things like a fridge or a/c for weeks, landlords like yourself may lose a great tenant that would've stayed for many years.
