What Is an Hpg Contract

When it comes to real estate and construction, the terms and jargon can get a bit confusing. One term you may come across is an HPG contract. But what exactly is an HPG contract and how does it apply to construction projects? Let`s take a closer look.

An HPG contract, also known as a homebuyers protection guarantee contract, is a type of insurance policy that protects homebuyers from defects in construction. These contracts are typically offered by builders or contractors as a way to attract buyers and assure them of the quality of the construction.

The HPG contract typically covers defects in workmanship and materials, as well as major structural defects. This means that if any of these issues arise within a certain timeframe (usually around 10 years), the buyer can file a claim and have the cost of repairs covered by the HPG contract.

It`s important to note that HPG contracts are not the same as traditional homeowners insurance policies. While homeowners insurance typically covers damage caused by natural disasters or accidents, HPG contracts are specifically designed to cover defects in construction.

Another important aspect of HPG contracts is that they are typically transferable. This means that if the original buyer sells the property within the timeframe covered by the HPG contract, the new buyer can still take advantage of the protection offered by the HPG contract.

So why would a builder or contractor offer an HPG contract? For one, it can help attract buyers by giving them peace of mind that their investment is protected. Additionally, offering an HPG contract can help protect the builder or contractor from potential lawsuits or costly repairs down the line.

If you`re considering purchasing a newly constructed home, it`s important to ask about any HPG contracts that may be offered. While they do add an additional cost to the purchase price, they can provide valuable protection and peace of mind in the long run.

In conclusion, an HPG contract is a type of insurance policy that protects homebuyers from defects in construction. It covers defects in workmanship and materials, as well as major structural defects, and is typically offered by builders or contractors as a way to attract buyers and protect themselves from potential legal issues. While they do come with an additional cost, HPG contracts can provide valuable protection for homebuyers.


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