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The Number You Have Dialed Is No Longer in Service

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The Number You Have Dialed Is No Longer in Service

Homeowners are often shocked to discover that the roofing company that installed their new roof or repaired their old one is out of business

By by Jim Cory November 9, 2017
Roofer with harness on rooftop
Harnessed roofer

Here’s a simple fact that you might want to cite in your sales presentation to homeowners who are thinking about replacing the roof: “Since roofing is a “high-turnover” business, the majority of roofing contractors are out of business within five years." The source is the FAQ section of GAF’s website. The FAQ page is there to provide some clarity to homeowners on the subject of roofing warranties and to educate them on the various types of manufacturer warranties they can buy (in addition to the roofing job) when their contractor is installing a roof using GAF products.

According to the same FAQ, two-thirds of warranty claims in roofing involve faulty installation. Which begs the question: If a roofing job is defective such that it requires service, and that is usually the fault of the installing contractor, what does the customer do when he or she calls that contractor’s office about a problem with a new (or recent) roof and the number is no longer in service? 

GAF’s answer is to spend more money on one of the warranty upgrades it offers. The most well known is called the “Golden Pledge Ltd. Warranty.” Purchased exclusively through a GAF-trained contractor (one who belongs to the manufacturer’s Master Elite contractor group), the Golden Pledge Ltd. Warranty is good for 50 years on products and 25 years on workmanship. As the FAQ states, that means: “Whether or not your contractor remains in business, GAF will sAstand behind his workmanship for 25 years!”

Who to Trust

Most homeowners don’t know that the manufacturer’s warranty on product and the roofer’s warranty on installation (workmanship) are separate. Roofing companies that truly stand behind their work will no doubt point this out in the sales process, but roofing customers are often a little stressed out during those meetings and stress makes for its own kind of amnesia. In fact, warranties are a marketing and selling tool, reassuring the nervous homeowner that if, God forbid, something goes wrong with that new roof, there’ll be someone to fix it. Since that’s probably going to be the installing contractor, that’s who you’d call, right? But not if he’s out of business. 

Is the GAF claim accurate? Do most roofing companies go out of business within five years? 
Not exactly, but the roofing manufacturer is not that far off the mark. Citing a US Census Bureau study measuring failure rates of construction businesses with payrolls, The Harvard Joint Center on Housing Studies reports that between 2007 and 2012, 39 percent of residential roofers went out of business. 

That said, the Master Elite roofers who belong to GAF’s program are probably not going out of business anytime soon. They’re the “top 3 percent” of residential roofers, according to BRC Roofing and Construction, in Jacksonville, Fla. As the company webite explains to visitors, to belong to GAF’s Master Elite dealer program and be eligible to offer the Golden Pledge Ltd. Warranty, a contractor has to have proper licensing and insurance, a proven local reputation, and a commitment to ongoing training. ”We can proudly say that our 22-plus years of service to residents of Jacksonville and nearby areas can speak [for] itself.” 

Homeowner, It’s on You 

But homeowners looking for assurance that service work on warranty will be performed for the life of the roof are still left scratching their heads. Why is the manufacturer offering a warranty that the contractor normally offers? What if I don’t want to pay hundreds of dollars for an additional warranty? Is it asking too much for a contractor to guarantee the quality of his company’s work?
No, that’s not an unreasonable expectation. In fact there are plenty of companies that are not members of the Master Elite program who do great work and back it up with serious workmanship warranties of ten years or more. You’ll find them in every market. They just happen to install a different manufacturer’s shingle. 

But don’t expect that you’re going to stumble on them as a matter of course. Homeowners in need of a roofer who does consistently excellent work backed by not just manufacturer’s warranties—worthless if installation isn’t to spec—but their own ironclad guarantee, should expect to do some serious research. Reviews will tell you a lot, as will company longevity. Because while, yes, the failure rate of residential roofing companies is high, it’s also the case that there are companies in most markets who’ve been in the business for decades, even for two or more generations.

As Josh Garshkof points out in Money ("5 Things to Know Before You Replace Your Roof"), “Some roofers don’t worry much about customer satisfaction since replacing a roof is a once-every-few-decades job, which means they don’t have to count on repeat business. Plus, many homeowners (mistakenly) choose their roofer based largely on price, and many roofing contractors hire low-wage workers so they can deliver the lowest possible bids. All of which is to say: You need to be extremely careful whom you hire.” 

How do you know a company’s going to be there if you have a workmanship warranty issue? The best predictor would be longevity in the market, with all the brand assets (a company-owned office and showroom, a fleet of trucks, specialty equipment, solid reputation) to go along with it. 

“It’s a good idea to get references for the roofing company and investigate its history and length of time in business,” advises a blog at the website of Roofing Southwest in Phoenix ("Contractor Warranty Vs. Manufacturer Warranty").
“It’s not unheard of for a shady roofing company to offer a warranty but refuse to honor it, or to suddenly go out of business or leave town—as storm chasing contractors often do. Look for a company that has a solid and long-established reputation in your community and check to make sure they honor their promises.” Don’t be shy about calling past customers. Most of the time people are happy to talk about contractors who worked for them, for better or worse.

The one flaw in this commonsense advice is that a new roof is rarely a discretionary purchase. The homeowner is calling the roofer because there’s a problem. Often homeowners are calling in panic mode. They’re too stressed to consider doing research that might help avoid an issue down the road.

If They’re Out of Business

If the roofer a homeowner calls for service is out of business, most often the homeowner is out of luck. “The contractor’s guarantee or workmanship warranty covers deficiencies occurring from installation in the roofing system,” notes a blog on the website of P&A Roofing and Sheet Metal, in Orlando ("Warranty & Bonds"). “A contractor’s guarantee is only as good as the contractor supporting it. If a contractor goes out of business, a guarantee will no longer be active.”

On the other hand, if the company has simply been sold or changed its name, and the warranty information is included in the contract, the homeowner would be perfectly within his or her rights in requesting service work on the workmanship warranty. If ownership passes, the new owner is still responsible for honoring warranties. 

That’s what Beverly Tarbell found out ("Will long warranty help if company goes belly up?" ABC7 News). She called Sierra Spray Foam Roofing with a serious leak and the contractor the company sent to fix it told her that the whole job was failing apart. When she called Sierra Spray Foam again, they wanted $3,000 for additional work. She told them she had a 15-year warranty and expected them to honor it. At which point the company—operating with new owners and under different state licenses—stopped taking her calls.  But as Rick Lopes from the California Contractors State License Board told ABC 7 News, “companies remain responsible for construction warranties even if they change hands … So, if they made these commitments, they are then required by law to uphold them. If they don’t, then the contractors board can take action against the license.” And when Tarbell called a local TV station and reporters—and videographers—went to visit, the roof was quickly fixed under warranty.

But who wants to go through all that? The homeowner who signed a contract in the heat of the moment or who thought he or she got a great deal on that roof because the price was so low may find out that buying a roof is not the time to go cheap.

written by

Jim Cory

Senior Contributing Editor

Philadelphia-based writer Jim Cory is a senior contributing editor to Professional Remodeler who specializes in covering the remodeling and home improvement industry. Reach him at coryjim@earthlink.net.

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