S. Department of Housing and Urban Development. The letter suggested that brokers and agents could be violating the Real Estate Settlement Procedures Act if they accepted a fee for selling home warranties. That’s because referral fees for “settlement services” are banned under the federal law, and confusion has reigned ever since over the acceptable conditions for receiving compensation. Even a clarification letter from HUD two years later, which said warranty sales were permissible as long as sales efforts constituted more than simply referrals and fees were reasonable, did not stem the confusion, since the follow up guidance continued to suggest that warranties were a “settlement service. ” The conflicting interpretations led to lawsuits, including a class action case against American Home Shield.
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It will also help you to make sure that you are not caught off guard by extreme and unexpected repairs. Not only does it help to patch the holes that you may have in your home insurance, but it also makes sure that you have peace of mind should major repairs come up. You know that you are going to be able to get a good contractor that will give you great service. If you get less than expected, you will have a way to get your complaints addressed. Your problems are solved. Don’t hesitate to invest in a good home warranty protection.