Personal v Real Property: A Modern Perspective

When it comes to home systems and appliances, it’s not personal.

By  Arthur J. Chartrand, JD

We all hear that arcane and rather silly message as we depart an airplane. “Please look around for all your personal belongings and take them with you.”  I always wondered, “Are there impersonal belongings?  Are there “public belongings?”  Is belongings even a word? (It is.) What if you have something in your possession but it does not “belong” to you? Is it still a belonging? What makes it “personal?”

And what about your belongings at home? What is “real estate” and what is “personal property?” These are questions only comedians and tax lawyers contemplate late at night. The test for what is personal property, what is a fixture (an arcane legal term [1] that no longer has useful meaning) and what is real property is more confusing now than asking a politician the difference between a lie and “ a short circuit.”

Merriam-Webster says real estate is property consisting of buildings and land. [2]
That seems too simple and begs what parts of a building are included.  The nation’s tax and real estate laws currently present a 50-state fruit-salad buffet of circular definitions and ambiguous criteria. It’s time to end this confusion. It’s time to examine the law, common sense, logic and reality of modern life.

 Let us begin with established common sense and consensus.   No one questions whether furniture, drapes and carpeting are personal or real property. Furniture is personal property; it leaves when the home seller leaves.   Carpeting and drapery, by contrast, are extensions of the house (real estate), as hands are extensions of arms.  In other words, property and property improvements cease to be “personal” when they are installed or affixed in such a way that they are no longer moved or readily moveable.  Central heating, water heaters and light fixtures are the internal organs of a house and provide its useful functions.

The term “real estate” applies to the house and all its body parts. This includes kitchen appliances and anything else that is wired, screwed, nailed, connected, vented or plumbed into the house structure. The line between personal property and real estate is not merely linguistic. The distinction directly affects sales taxes paid by consumers and collected by states.     State, local and federal governments do not sales tax real estate. Governments impose a variety of taxes on real estate, but sales tax is not one of them. Sales taxes are imposed on goods, services, sometimes labor and other transactions. They most certainly apply to tangible personal property (hereafter “TPP”).   Specifically, sales tax is imposed on the transfer – or sale – of tangible personal property.

Now let us examine in more detail the menagerie of state laws and regulatory interpretations that have merged the legal lines between personal property and real estate.

As indicated, there is a defining moment at which property ceases to be tangible or transferrable. That is the moment at which it is affixed or incorporated into the permanent structure of the house. Hence forward, it is no longer personal or normally transferrable property. It is now part of the permanent real estate and, thus, no longer subject to sales tax.

 The law of fixtures[3] (another arcane concept only lawyers study in law school) provides a convenient label, but glosses over the transformation of property from personal to real. The law of fixtures relies upon removability. The fact a good can be removed from realty and revert back to personalty is irrelevant.  Many states reject a common sense delineation between personal and real property in favor of complex and arcane language that leads to confusion and confrontation.  A few examples:

 

A:         Texas Tax Code Sec. 1.04.  DEFINITIONS. (4)  “Personal property’ means property that is not real property.”  This is hardly helpful or instructive but is common in most states.

B:         The California Bureau of Real Estate says that real property is land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land. See:  http://www.dre.ca.gov/files/pdf/refbook/ref27.pdf  [The first part of this is instructive as it has an “affixation” element, but the latter would exclude the whole house as an entire house can clearly be severed and moved without injury to the land itself.]

C:         A Pennsylvania statute liberally defines TPP as “[corporeal] goods, wares, merchandise, steam and natural and manufactured and bottled gas for non-residential use, electricity for non-residential use, prepaid telecommunications, premium cable or premium video programming service, spirituous or vinous liquor and malt or brewed beverages and soft drinks, interstate telecommunications service originating or terminating in the Commonwealth and charged to a service address in this Commonwealth, intrastate telecommunications[.]” (72 Pa. Stat. Ann. § 7201(m)).

D:         Iowa law lists kitchen cabinets, dishwashers, sinks (including faucets), fans, garbage disposals and incinerators as items that routinely become realty and do not remain TPP. (Iowa Admin. Code r. 701-19.10 (2016)).

Yet another authority says: “Real property generally includes the land itself, and all things permanently attached, such as buildings, structures and improvements.” [4] The discerning legal mind leads us to this attachment concept.  In fact, nothing is permanent in the modern world. “Permanency” depends on the tools you have, strength of body or equipment and expertise. The nature of the property cannot depend on the nature or skill of one owning it.  The key must be that when TPP is affixed in any meaningful way, is it intended to become part of the useful function of a normal house?

Consider this instructive tax rule:

……Tangible personal property [is property] that becomes a part of any building or other structure, project, development, or other permanent improvement on or to such real property including tangible personal property that, after installation, becomes real property by virtue of being embedded in or permanently affixed to the land or structure constituting realty and which property after installation is necessary to the intended usefulness of the building …..[5]

If the states were to adopt a simpler, more logical demarcation between real estate and personal property, they might find that clarity about “tangible personal property” is also within reach. Tangible means it can be felt or touched. This distinguishes a chair from a checking account, a credenza from a capital gain or patent.  For Latin aficionados, intangible property is incorporeal.

States impose a sales tax when personal property, tangible of course, is sold or transferred from one person to another. Beating the tax collector by selling for free or trade is another concept also beyond our instant concern. However, there is no sales tax to own, use or simply possess, tangible personal property. This is because there is no “transfer” of ownership or no “sales” involved. Beyond the scope of this article are ad valorem taxes (based on value of the property) on TPP.[6]

The paradox here is that TPP cannot be both personal property and real property at the same time. In the case of a residential house, almost everything started as tangible personal property (two by fours, nails, water heater, dishwasher, pipe, electric cabinet, wire, faucet, sink, stove, air conditioner, etc.)  that at some point, after sale or transfer and after being installed or incorporated into a house, it became so integral to the usefulness of the house, it became part of the house. It no longer retains any nature of a mobile good routinely moved, handled or sold outside of a real estate transaction.

 At first glance, pinpointing the distinctions between personal and real property may resemble the difficulty of pinpointing when a caterpillar becomes a butterfly.  That the transformation was neither witnessed or understood does not change the fact that it occurred.  You know when you see it. A caterpillar is attached to the ground.  A butterfly soars through the air. Call it a caterpillar all you wish but the butterfly’s worm days are over. When a dishwasher is installed in your home it becomes part of the realty and not sales taxable.  Same goes for a washer/dryer, which can neither wash nor dry until attachment occurs. It requires water service, a drain line, and an external air duct vent.

Case law or legal tests before the advent of the modern residential home are senseless.  Here are the modern essential tests of when TPP becomes reality.  No test is exclusive, but affixation is certainly the strongest. The sum and weight of all tests must fit into the final determination.

Affixation:

Affixation is the primary test and must be applied consistently. It cannot depend upon your level of sophistication, age or muscular attributes. The affixed or installed items in a home which become integral to the usefulness and function of a home are make up a surprisingly finite list. There is no question or reasonable suggestion that the following items in a home, once mobile and tangible and transferred in a sale (prior to house construction or later as a replacement in a retail store or professional installer transaction), are any longer personal property once affixed and placed into a home as realty.

  • HVAC system (including indoor unit and outside compressor)
  • Whole house fans (attic fans)
  • Ductwork
  • Electric system
  • Electric fixtures and ceiling fans
  • Plumbing system
  • Plumbing fixtures
  • Water heater
  • Garbage disposer
  • “Built in “or under cabinet trash compactor, dishwashers and microwaves
  • Cooktops and Stoves
  • Ovens and ranges
  • Garage door openers
  • Central vacs
  • Water softeners
  • Septic tanks
  • Well pumps
  • Pools and pumps
  • Doorbells and Intercoms
  • Clothes Washer/Clothes Dryer

The commonality is that all these items are wired, plumbed, screwed, glued, hard vented or trimmed into a specific place in a house and are not normally intended to be removed until they wear out. This is true regardless of your age or relative training or sophistication to move or change them out. They may or may not last as long as cement, sheet rock or shingles, but they are no less affixed as to become part of the realty.

The few notable goods or property otherwise that may retain their nature as personalty, certainly tangible and capable of non-sophisticated, easy mobility or transfer may be:

  • Non-built in, ‘free standing” refrigerator  (unless hard plumbed for water service or drain)
  • Counter top microwave
  • Mobile dishwashers on wheels
  • Free standing trash compactor on wheels
  • Televisions, game systems, radios and computers.

For these items we must consider other tests.

Normally transferred with realty:

It is a waste of time and effort not to simply acknowledge that counter top microwaves remain personalty throughout their useful (and non-useful) lives. Equally, a portable dishwasher on wheels or portable trash compactor by their nature were most often chosen for the very purpose of moving them, or taking them with you, unless they were simply acquired for space savings lacking sufficient space to permanently install. Keep in mind, even a portable dishwasher on wheels must be plumbed and have a drain attached unless designed to temporarily use a sink. [One might also note the relative rarity of both of the latter and the lack of sense to base any broad public tax policy on the meager existence of an obscure appliance.]

In the case of refrigerators not hard wired in, trimmed in or plumbed in, certainly the case exists that these might remain personal goods. But not always. Until the late 1980’s, refrigerators were rarely included in home sales and often were taken when people sold their house and moved. They were almost part of the family until the 1980’s. This quickly faded away in the 21st century. Most new homes come with a refrigerator already installed and few home sellers find it economic or desirable to take their refrigerator with them. This can depend upon the home value or socio economic demographic yet, but largely these appliances remain part of the realty. The same is increasingly the case for clothes washer and clothes dryers.  Clothes washers and dryers easily meet the affixation test, even if they yet fail the normally transferred test.

We can accept without argument that many televisions, game systems, radios and computers remain cherished personal possessions, are rarely permanently intended to be permanently affixed. Despite that many flat screen televisions and their attendant cabling and mounting support a strong affixation argument, these items are generally saved outside real estate transactions, quite mobile and often taken with home sellers. This nature is rapidly changing as we often see large flat screens sold with realty as they are too dangerous to move, too expensive to ship or just technologically obsolete to bother with that they remain as part of a residential home upon sale. Some are more permanently affixed and require much more sophistication to move than a built in dishwasher. Many today (this author included) would consider a cable/internet driven flat screen more useful, integral and indispensable to the usefulness of a home than a dishwasher or even hot water. 

No longer treated as personal property:

This test is simple and closely related to the affixation test and all items listed there. One may purchase as dishwasher as a personal good, but it is never treated as personalty once installed in a home. Certainly the case for hot water heaters and garage door openers. Despite the case of an occasional antique light fixture or family heirloom ceiling fan, these lead to a highly subjective consideration rather than one for law, commerce or tax policy.

Integral to form function and usefulness of a residential house:

There are simply no items above that fail this test. The only variation is your economic status and perhaps demographic or age of home that dictates whether some of these items are normally found in a house. If they are in the house, they seem all at least to fully meet the Texas rule cited above. Think: What feature is more indispensable in a house to daily function? A garbage disposer or an internet connected flat screen?

Conclusion. After a tangible good or piece of property has been affixed or installed into a house; will normally be transferred on a future sale of the house; is no longer treated as a personal good; and is integral to the function and usefulness of a house¾it should be taxed as real property. The fact that an appliance, system or piece of property can be removed from the real estate is of no merit or consequence. Everything can be removed from a house at some point.

  • Arthur J. Chartrand is the principal of Chartrand Legal Management, Inc., a law and legislative practice based in Kansas City. Chartrand has worked in every US state capital helping to define modern laws in insurance, real estate, property valuation and taxation. chartlaw.com. Chartrand is former counsel to the NAIC and current Exec. Director and counsel to the National Home Service Contract Association.

This article may be reprinted or republished or cited without prior permission as long as attribution is provided.

[1]  Black’s Law Dictionary defines a fixture as “A fixture is a personal chattel substantially affixed to the land, but which may afterwards be lawfully removed therefrom by the party affixing.”  For present purposes, the law of “chattels” is ancient and we consider irrelevant to any modern discussion.

[2] See: http://www.merriam-webster.com/dictionary/real%20estate. Helpful. If it is part of a building (and assumedly normally sold with a building) it is real property.

[3] Black’s Law Dictionary states “A fixture is a personal chattel substantially affixed to the land, but which may afterwards be lawfully removed therefrom by the party affixing it.”

[4] See Lincoln Institute of Land Policy, https://www.lincolninst.edu/subcenters/significant-features-property-tax/CustomReport.aspx?id=273

[5] Texas Administrative Code Rule 3.291 (a) (7)

[6] SEE: Errecart, Gerrish & Drinkard States Moving Away From Taxes on Tangible Personal Property  (Oct. 4, 2012) TaxFoundation.org

Sales of Home Warranties Soar as Industry Covers Billions of Dollars in Appliances & Systems

The National Home Service Contract Association also reports an increase in consumer knowledge, value & popularity of home service contracts

Lenexa, Kan. –  Sept., 2016  The National Home Service Contract Association (NHSCA), a non-profit 501(c) (6) industry trade organization comprised of member companies representing home service contract providers and consumer interests throughout the United States, announces today that its members sold more than 4 million home service contracts (often referred to as home warranties) in 2015, an 8-percent growth from 2014.

“The NHSCA is an advocate for the home service contract industry and works diligently to further educate consumers about the value that home service contracts deliver,” said Mike Bartosch, president of the NHSCA. “The wholesale value of these contracts easily exceeds $1 billion in savings to consumers annually.”

The home service contract industry provides service, repair or replacement of major household systems and appliances that fail due to normal wear and use. Contracts generally cover items such as dishwashers, ovens, cooktops, garbage disposals, microwave ovens and water heaters; electrical, plumbing and heating systems; as well as ventilation and air conditioning systems (HVAC).

“If a system or appliance stops working, contact your home service contract provider. If a home system or appliance is damaged by a falling tree, catches fire or is subject to vandalism, then contact your insurance agent,” said Bartosch. “Home service contracts and homeowners’ insurance policies are mutually exclusive products in all 50 states. NHSCA members are not insurers and do not sell an insurance product. Further, insurance products don’t cover service, repairs or replacement to home systems and appliances required as a result of normal wear and use.”

The majority of home service contracts are offered through real estate professionals to the sellers and buyers of homes during the resale process. However, direct sales to consumers now account for approximately one-third of all home service contract sales. As with the sale of any warranty contract, buyers should read and understand the coverage afforded, as well as the limitations to coverage. Buyers should not rely solely on others to explain the coverage, as coverage may be inaccurately represented, which can cause frustration later.

While national figures continue to grow, home service contract market penetration differs from state to state. Various sources cite that in California, where the industry began in 1971, more than 90 percent of all home sales include a home service contract.

“Clearly these most recent figures show that consumers trust our members to take care of appliances and systems in their homes,” said Arthur J. Chartrand, chief executive and counsel of the NHSCA. “The members of the NHSCA represent a collective commitment to education, service quality and coverage. These sales figures posted by our member companies prove that our educational efforts are working and consumers are listening. As a result, the industry is positioned for an even stronger finish in 2016.”

Formed in 2004, the NHSCA exists to conduct research and promote education, publications and other methods that improve consumers’ understanding of home service contracts. Its mission is also to distinguish the home service contract industry from insurance, retail warranty and extended warranty and the automobile dealer service business. It also informs members of changes in laws and practices as well as pending legislation that affects the home service contract market nationwide as well as sponsors meetings and educational programs.

In addition to the protecting consumers on the wear and use of a home’s core appliances and systems, many home service contract providers also offer optional items such as swimming pool or spa equipment and other free-standing appliances such as kitchen refrigerators or washers and dryers for an additional fee. Contract terms may be annual and renewable, but many are now offered on monthly terms.

“All parties in a real estate transaction benefit from a home service contract,” said Bartosch. “For real estate agents, the benefits of home service contracts include risk management after the close of the sale, the ability to focus on repeat or referral business, hassle-free home repairs for clients and increased customer satisfaction as both buyers and sellers view home service contracts as a benefit and value the protection they offer.”

Although the term “home warranty” has been used historically throughout the industry, the more correct term is “home service contract.” Home warranty is a descriptive term coined because the home service contract industry evolved by providing contracts purchased by home sellers for home buyers as a form of “warranty” to protect the new buyer should a mechanical problem develop during the first year of ownership.

“Working to improve the overall consumer interface and experience with our providers and local contractors has been a top priority of the NHSCA,” said Chartrand. “Home warranty is a generic term and should not be confused with a new home’s ‘builder warranty’ or ‘extended warranties’ for new consumer goods.”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. Members of the NHSCA are reputable, licensed home service contract providers in good standing, domiciled in various states across the nation. All members agree to adhere to a code of ethics, which promotes sound and ethical business practices. A current list of member firms are listed on the NHSCA website. For more information, please visit www.homeservicecontract.org or follow the NHSCA on Twitter @coveryourhome.

#05

 

 

 

 

 

 

 

 

Bartosch Elected President of NHSCA

Mike Bartosch Elected President of National Home Service Contract Association

Boston, MA, June 10, 2016 – Mike Bartosch, a long time leader in the home warranty industry, has been named President of the National Home Service Contract Association (NHSCA). Bartosch is President of 2-10 Home Buyers Warranty of Denver, Colorado, a leading provider of home warranty products and home service contract plans. Alma Jeppson, CEO of Utah based, Landmark Home Warranty was named Vice President.

“Working to improve the overall consumer interface and experience with our providers and local contractors is among my top priorities,” said Bartosch.  “The NHSCA membership represents a commitment to quality and distinguishes approved members as being leaders in our industry that consumers can trust. I am honored to help guide our industry as consumer demand grows.”

As president of NHSCA, Bartosch will serve as an advocate for the home warranty (service contract)  industry and work to further educate consumers about the value home service contract providers deliver. “Mike has been a leader in our industry for years and now has the opportunity to better share and promote many of his forward thinking ideas in consumer service” noted Arthur J. Chartrand, Chief Executive and Counsel of the Kansas City based trade group.

The NHSCA also welcomed, AHG Home Warranty of Mesa, Arizona as a new member at its recent national meeting.

NHSCA members are the nation’s leading providers of consumer contracts to service, repair or replace household systems and appliances that fail due to normal wear and tear. The NHSCA works to improve the public’s understanding of the value and benefits of home warranties (service contracts), as well as encourage sound and ethical business practices and standards. In 2015, nearly 4 million service contracts were sold by NHSCA members, with well over one billion dollars paid at wholesale cost representing even hundreds of millions more in consumer benefits and savings.

About the NHSCA

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org

#06

 

NHSCA Interprets Washington State Tax Advisory

Appears official that longstanding law of no sales tax upon initial sale of home service contracts is affirmed.

The Washington State Department of Revenue published an Excise Tax Advisory (ETA) on January 12, 2016, ETA 3198.2016 regarding the sales taxation of home service contracts.

This ETA has been in discussion for years with the home service contract industry. The Washington Department of Revenue (DOR) has desired to alter the tax law after decades of audit clearance letters by the DOR approving of no sales tax upfront on the sale of home service contracts. Sales tax has always been collected when local Washington contractors later perform work. Only a handful of states tax the sale of home service contracts at the time of contract sale, and only pursuant to clear and specific statutory authority.

The ETA appears to rely in great part on a wholly unrelated statutory amendment in 2005 that taxed the sale of new product “extended warranties” sold at retail under RCW 82.04.050. Home service contracts do not cover new product, retail sales in any way shape or form. The reliance on the taxation of new products sold at retail, makes the entire basis for the ETA suspect.

Also casting a cloud, is that the DOR has continually assessed a B&O tax on all home service contract sellers at the rate of 1.5%. If home service contract sales were indeed retail sales, subject to RCW 82.04.050, the tax rate should have been the applicable 0.471%. If upheld, may years of refunds would need to be calculated.

Due to these issues, the DOR and the NHSCA cooperated to sponsor HB 1997 in March, 2013 to change the taxation of home service contracts to be more like that of retail goods. The legislature rejected that approach after a full hearing on the issues. This ETA appears to be an overt attempt to circumvent the Legislature.

However, this advisory strains to explain that typical home service contracts that only cover real estate and fixtures (broadly defined as virtually all appliances and household systems) are not sales taxable. So one fair reading is this ETA perhaps continues the decades old interpretation by the DOR and legislature that home service contracts are not taxed at time of sale, but only on work later performed later by a local contractor.

Due to the ETA not being reviewed with industry prior to publication, it contains some odd factual errors including a statement that a warranty can only cover personal property and erroneous legislative definitional references to “warranty” that any real impact of the non binding advisory is difficult to assess. An included discussion of “mixed service contracts” has few definitions and suggests a deminmis or “no tax” tax rule on covered tangible personal property, so it may also suggest no change in policy.

One can only fairly conclude as the Washington Legislature has, that home service contracts are not taxable at time of sale, just as the DOR has ruled for decades. Only the legislature can change the law. The NHSCA remains ready and willing to accept a future change set by the Washington legislature.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, including short helpful videos, visit  http://www.homeservicecontract.org or call 913871-5600.

#08

Changing Clocks is a Cue to Prevent Fires in the Home

National Home Service Contract Providers offer advice to homeowners on maintenance tips to prevent fires.

Lenexa, KS — Whether you are springing forward or falling back, it’s a good time for homeowners to replace the batteries in their smoke detectors. The members of the nonprofit, National Home Service Contract Association (NHSCA) would also like to remind homeowners that it’s also the perfect time to perform some regular maintenance on appliances and systems to help prevent a devastating home fire.

Home service contracts cover service, repair or replacement of the major systems and appliances in your home that fail due to normal wear and tear. Heating and electrical systems as well as appliances including oven/range, water heater, kitchen refrigerator, dishwasher, garbage disposal, trash compactor and specialty items such as built-in bathtub whirlpool, and central vacuum systems are items generally covered in a home service contract. Optional coverage is also available, and varies by state.

Regular maintenance to these systems is important to keep them running and operating efficiently so the NHSCA offers the following tips to homeowners to help them keep their home and families safe and comfortable as cold weather approaches.

Furnace

  • Your furnace should be cleaned and inspected annually by a qualified HVAC technician.
  • If the first time you turn the furnace on in the season you perceive a dusty or even burnt smell, there is likely no need for concern. The majority of the time it’s just burning the dust out of the combustion chamber due to lack of use. Changing your furnace air filter may help, but if the odor persists, call a technician.
  • The older the furnace, the more important this service is. Newer gas furnaces are equipped with many features that shut the furnace off when a problem is detected.
  • If you think you are saving money by closing vents in rooms not utilized during the winter, think again. In reality blocking vents actually causes the system to work harder. If you close off more than 20% of the registers in your house it can cause high resistance and unnecessary heat build up in the furnace.
  • Change your furnace filter at least once every three months. If you plan to have any remodeling work done in your home, be sure to change the filter once it’s completed as dust, dry wall debris and other byproducts of such work can clog the filter much more quickly.

Clothes dryers

  • According to the National Fire Protection Association clothes dryers and washing machines were involved in one out of every 22 home structure fires reported to U.S. fire departments in 2006-2010.
  • The leading cause of home clothes dryer and washer fires was failure to clean (32%).
  • Most of those involved dryers, and many of them were due to buildup of dust and lint in the clothes dryer exhaust duct. Make sure to not only clean out the lint trap with each use, but also occasionally clean the dryer exhaust duct and behind/under the appliance as well.

Electrical System

  • The National Fire Protection Association recommends having a licensed electrician review your home every 10 years. Small upgrades and simple safety checks, like making sure outdoor grounds and connections, are secure can prevent larger problems.
  • It is also a good idea to do a visual inspection of anything electrical to be sure there are no frayed cords or wires and any exposed wiring.
  • Look in the attic and crawl spaces for wiring which appears to have been damaged by pests or insects. Some old wiring is insulated with material insects eat or chew on, and squirrels or other rodents will often chew the insulation off.
  • Warning signs that may indicate a potential problem with your homes electrical system include: frequently blown fuses or tripped circuit breakers; dim or flickering lights; overheated plugs, cords, or switches; and bulbs that wear out too fast.

Fire Detectors

  • Testing your fire detectors to make sure they work and taking the time to refresh the batteries can make the difference between saving the life of a family member.
  • Take the time to check allof the detectors in the home. If you feel that specific rooms that do not have a fire detector but you feel may need one, now is a good time to add them.

Appliances

  • Most electrical fires are caused by faulty electrical outlets and old, outdated appliances. Other fires are started by faults in appliance cords, receptacles and switches.
  • Never use an appliance with a worn or frayed cord that can send heat onto combustible surfaces like floors, curtains, and rugs which can start a fire.

Water Heaters

  • The most common problem with water heaters is failure that causes flooding. But water heaters can also cause house fires. Take the time to inspect your water heater at least once a year. Remove paper, accumulated dust or other combustibles from the heater enclosure.
  • Many experts suggest keeping boxes and other storage items at least three feet away from the furnace or water heater.
  • If you live in an area prone to earthquakes, like California, water heaters must be properly strapped so that they don’t fall over during an earthquake. Water heaters weigh several hundred pounds when full, so a proper seismic strapping kit must be installed.
  • Extinguish the pilot light before using flammable liquids or setting off aerosol bug bombs.

Remember when it is time to change the clocks, it’s also a good time to safety check your home.

For more helpful information on home maintenance visit the NHSCA website,  www.homeservicecontratc.org and see all our helpful tips and short videos on caring for you your home.

#10d

HomeServiceContract.org Should Be First Stop for New Homeowners

National Home Service Contract Association offers helpful tools allow consumers to select the most reputable providers of home service contracts.

(Lenexa, KS)  Contracts are only as dependable as the providers behind them. The members of the non-profit trade association, National Home Service Contract Association (NHSCA,) are the leaders and professionals in the home service contract industry trusted to serve millions of consumers each year.

NHSCA members are registered and are easily identified through a NHSCA Company Code number and use of the NHSCA logo. Links to individual websites may be found on the NHSCA website at www.homeservicecontract.org  These are providers who adhere to a code of ethics and actively work with state regulators to protect consumer interests.

In 2015, the state of New Jersey filed charges against Stanley Safe Club or Stanley Warranty alleging the company and its owner defrauded consumers in New Jersey and other states. The alleged violations include: conducting business under the name “Stanley Warranty” when the company sells residential and motor vehicle service contracts; advertising and representing that consumers can call the company’s claims department 24 hours a day and that the company has more than 90,000 service providers, when it does not; continuing to charge consumers after they cancelled service contracts; and failing to respond to consumer inquiries for several weeks, if at all.

In another 2015 case, Edison New Jersey based CHW Group, Inc., which does business as Choice Home Warranty, agreed to pay the State $779,913.93 in a lawsuit filed against them. The state alleged the company enticed consumers to buy so-called comprehensive coverage for crucial home systems and appliances and then denied their claims using alleged deceptive practices. As part of the settlement, the company also agreed to revise its business practices and retain a compliance monitor for at least a year.

Neither company is a member of the NHSCA.

“No matter what the industry, there will always be companies that operate beyond the law and fail to meet their obligations,” Art Chartrand, legal counsel for the NHSCA, said. “One of our primary missions is to educate and inform homeowners about home service contracts so that expectations can be met fairly. At the NHSCA, we work directly with state regulators and have a near constant presence in each state capital to protect consumers and provide fair and honest competition.”

The home service contract industry has a strong reputation and long history of serving consumers. As with any industry, not all companies grow and flourish. Selecting a NHSCA member company provides added security with the knowledge that your contract provider meets certain criteria that will help ensure they will be there when you need them. Using a non-NHSCA member is a risk consumers do not need to take. Consumers may locate NHSCA members operating in their state by visiting www.homeservicecontract.org/state-associations

The New Jersey Home Service Contract State Association was formed as a division of the National Home Service Contract Association and represents the premier and most respected providers of home service contracts in New Jersey. It provides news, information, education, regulation and legislation resource for the industry.

Here are a few items to consider when selecting your contract provider:

  • If the price or benefits sound too good to be true – you know it likely will be. Visit the NHSCA website and contact a member in your state to compare price and benefits.
  • Ask your local REALTOR®. Nobody is more familiar with or understands the industry better. They work with home service contract providers on a daily basis and can offer knowledgeable guidance.
  • If despite your best efforts, your provider disappears or fails to perform, contact a member of the NHSCA to replace your coverage. Competitive members operate in all states and are ready, willing and above all, able to offer you a service contract on your house.

Home service contracts are optional contracts that provide consumers with a single point of contact for most household appliances and systems. A call to an 800 number dispatches a screened,  licensed and qualified local contractor to your home. This eliminates having to shop-around or price compare at what could be a very stressful time. With one call, consumers receive the service, repair or replacement needed to keep their home running smoothly.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. To learn more about the NHSCA and to find answers to the most common questions regarding the purchase of home service contracts, visit www.homeservicecontract.org    or call 913-871-5600.

#11

 

 

 

 

Helpful tools allow consumers to select the most reputable providers of home service contracts.

(Lenexa, KS – July 14, 2015)  Contracts are only as dependable as the providers behind them. The 15 members of the non-profit trade association, National Home Service Contract Association (NHSCA,) are the leaders and professionals in the home service contract industry trusted to serve millions of consumers each year.

NHSCA members are registered and are easily identified through a NHSCA Company Code number and use of the NHSCA logo. Links to individual websites may be found on the NHSCA website at www.homeservicecontract.org/contact-nhsca-members. These are providers who adhere to a code of ethics and actively work with state regulators to protect consumer interests.

In the last few weeks the state of New Jersey filed charges against Stanley Safe Club or Stanley Warranty alleging the company and its owner defrauded consumers in New Jersey and other states. The alleged violations include: conducting business under the name “Stanley Warranty” when the company sells residential and motor vehicle service contracts; advertising and representing that consumers can call the company’s claims department 24 hours a day and that the company has more than 90,000 service providers, when it does not; continuing to charge consumers after they cancelled service contracts; and failing to respond to consumer inquiries for several weeks, if at all.

In another case, Edison New Jersey based CHW Group, Inc., which does business as Choice Home Warranty, agreed last month to pay the State $779,913.93 in a lawsuit filed against them. The state alleged the company enticed consumers to buy so-called comprehensive coverage for crucial home systems and appliances and then denied their claims using alleged deceptive practices. As part of the settlement, the company also agreed to revise its business practices and retain a compliance monitor for at least a year.

Neither company is a member of the NHSCA.

“No matter what the industry, there will always be companies that operate beyond the law and fail to meet their obligations,” Art Chartrand, legal counsel for the NHSCA, said. “One of our primary missions is to educate and inform homeowners about home service contracts so that expectations can be met fairly. At the NHSCA, we work directly with state regulators and have a near constant presence in each state capital to protect consumers and provide fair and honest competition.”

The home service contract industry has a strong reputation and long history of serving consumers. As with any industry, not all companies grow and flourish. Selecting a NHSCA member company provides added security with the knowledge that your contract provider meets certain criteria that will help ensure they will be there when you need them. Using a non-NHSCA member is a risk consumers do not need to take. Consumers may locate NHSCA members operating in their state by visiting www.homeservicecontract.org/state-associations

The New Jersey Home Service Contract State Association was formed as a division of the National Home Service Contract Association and represents the premier and most respected providers of home service contracts in New Jersey. It provides news, information, education, regulation and legislation resource for the industry.

In 2013, consumers contracted with members of the NHSCA received over one billion dollars in benefits. Members include: 2-10 Home Buyers Warranty, American Home Shield Corporation, Fidelity National Home Warranty Company, First American Home Buyers Protection, HMS/National Cross Country Home Services, Inc., Home Security of America, Inc., Home Warranty of America, Inc., HomeGuard Home Warranty, Inc., Landmark Home Warranty, National Home Guaranteed Inc., Nations Home Warranty, Old Republic Home Protection Co. Inc., OneGuard Home Warranties, The Warranty Group and Universal Home Protection.

Here are a few items to consider when selecting your contract provider:

  • If the price or benefits sound too good to be true – you know it likely will be. Visit the NHSCA website and contact a member in your state to compare price and benefits.
  • Ask your local REALTOR®. Nobody is more familiar with or understands the industry better. They work with home service contract providers on a daily basis and can offer knowledgeable guidance.
  • If despite your best efforts, your provider disappears or fails to perform, contact a member of the NHSCA to replace your coverage. Competitive members operate in all states and are ready, willing and above all, able to offer you a service contract on your house.

Home service contracts are optional contracts that provide consumers with a single point of contact for most household appliances and systems. A call to an 800 number dispatches a screened, licensed and qualified local contractor to your home. This eliminates having to shop-around or price compare at what could be a very stressful time. With one call, consumers receive the service, repair or replacement needed to keep their home running smoothly.

To learn more about the NHSCA and to find answers to the most common questions regarding the purchase of home service contracts, visit www.homeservicecontract.org

-30-

About the NHSCA The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States.

 

 

 

NHSCA Sits Down with Kevin O’Connor of This Old House

 

National TV Personality Provides Great Tips to Maintain a Happy and Healthy Home

KANSAS CITY, Mo.—Kevin O’Connor, host of This Old House on PBS recently sat down with the Kansas City chapter of the National Home Service Contract Association to discuss tips for homeowners.

Nominated for an “Outstanding Service Show Host” Emmy Award in his debut season, Kevin O’Connor has been appearing as host of the Emmy Award-winning series, This Old House, and the Emmy-nominated series, Ask This Old House, since 2003. He also serves on the editorial board of This Old House magazine, published by This Old House Ventures, Inc. Along with Amy Matthews, Kevin is also the host of This New House, which premiered on the DIY Network in the summer of 2010.

A home service contract/warranty is a contract for service, repair or replacement. It has features and benefits that clearly differentiate it from builder’s and product warranties and insurance. Prompt attention, qualified service providers and peace of mind, and protection from unexpected, and often-expensive repair bills, are primary benefits of home service contracts.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

#16

 

Understanding Home Service Contract Terminology

National Home Service Contract Association defines terms for homeowners, regulators and the media to keep things straight.

(Lenexa, Ks) The purchase of a home may be the largest investment individuals and families will make in their lifetime.  A number of products, such as home service contracts, insurance, builder’s and other warranties exist to help homeowners protect that investment. The key to their effectiveness, is gaining a clear understanding of various industry terms.

The National Home Service Contract Association (NHSCA), a non-profit trade association, is dedicated to educating consumers, regulators and the media so that they clearly understand the the home service contract industry. Clearly defining each is the best place to start.

Home service contract/warranty

  • A home service contract provides service, repair or replacement due to normal wear and tear on major, built-in household appliances and systems. Most cover items such as dishwashers, ovens, wiring and plumbing systems and heating, ventilation and air conditioning systems (HVAC).
  • Many contract providers also offer a menu of optional items such as pool pumps, spas and free standing appliances such as refrigerators and clothing washers and dryers for an additional fee. Rural homeowners may also elect to add septic tanks or well pumps.
  • At an average cost of $550 a year, contracts historically renew annually.  In recent years, many providers have begun to also offer coverage on a month-to-month basis.
  • Contract providers maintain a toll-free service call line 24 hours a day, seven days a week for the convenience of their customers. Dispatch of a trusted local service provider usually occurs within 3-5 business days. Most provide expedited service for true emergencies such as breakdowns that affect life, health or safety.
  • Service calls average approximately $75 and protect the homeowner’s pocketbook as some repairs and replacements have the potential to run thousands of dollars with no contract in place.

Builder’s home warranty

  • As stated above, a home service contract is a renewable agreement for the service, repair or replacement of major, built-in household appliances and systems on existing homes due to normal wear and tear.
  • A builder’s home warranty is very different. These warranties, provided by the builder on a new home, are designed to offer coverage on the actual workmanship and materials used in the home’s construction.

Product and extended warranties

  • Retailers and manufacturers frequently offer warranties on the purchase of on the goods – such as electronics and automobiles – they make and sell directly to the public through retailers.
  • These new product warranties are generally active for a limited time to safeguard against existing defects in the product.
  • Extended warranties are just that – warranties that extend beyond the original warranty period. At purchase retailers may offer to extend a new product warranty for an additional price.
  • These new product or “retail” warranties are part of a separate industry, aside from the home service contracts/warranties.

Insurance

  • There is little similarity between home service contracts and insurance.
  • Insurance protects a homeowner against partial or total damage or loss to the structure itself or possessions in the home. Insurance protects against sudden and fortuitous events such as fire, wind, hail, theft, collision or other accidents.
  • Insurance does not cover breakdowns due to normal wear and tear, while service contracts do. The two products complement each other – they do not overlap.
  • Homeowner’s insurance also provides liability coverage against accidents in the home or on the property.
  • If a tree falls on the exterior air conditioning unit of a home, it’s covered by insurance. If an air conditioner stops blowing cold air, it is covered by a home service contract/warranty.
  • In most states, it is not legal for a home service contract to cover anything which could be covered by insurance unless a specific legal exemption exisits.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

#01

NHSCA Members Serve and Protect Homeowners When Others Fall Short

National Home Service Contract Association members provide consumers over a billion dollars in benefits annually.

(Lenexa, KS)  Contracts are only as dependable as the providers behind them. The members of the National Home Service Contract Association (NHSCA) stand behind the home service contracts they provide millions of consumers each year. NHSCA member providers are often able to assist those who unfortunately find themselves contracted with a less than “stand-up” provider.

Consumers contracted with members of the NHSCA receive over a billion dollars in benefits every year.

NHSCA members are registered and are easily identified through a NHSCA Company Code number and use of the NHSCA logo. Links to individual websites may be found on the NHSCA website at www.homeservicecontract.org/contact-nhsca-members.  These are providers who adhere to a code of ethics and actively work with state regulators to protect consumer interests.

The home service contract industry has a strong foundation and long history of serving consumers. As with any industry, not all companies grow and flourish. Selecting a NHSCA member company provides the security of knowing that your contract provider will be there when you need them. Using a non-NHSCA member is a risk consumers do not need to take.

Here are a few items to consider when selecting your contract provider:

  • If the price or benefits sound too good to be true –you know it likely will be. Visit the NHSCA website and contact a member in your state to compare price and benefits.
  • Inquire about monthly contracts or a monthly-based renewal of the contract that came with your house.
  • Ask your local REALTOR®. Nobody is more familiar with or understands the industry better. They work with home service contract providers on a daily basis and can offer knowledgeable guidance.

If despite your best efforts, your provider disappears or fails to perform, contact a member of the NHSCA to apply to replace your coverage. Competitive members operate in all states and are ready, willing and above all, able to offer you a service contract plan on your house. Many now offer monthly payment plans.

Home service contracts are optional contracts that provide consumers with a single point of contact for most household appliances and systems. A call to an 800 number dispatches a screened, licensed and qualified local plumber, electrician or technician to your home. This eliminates having to shop-around or price compare at what could be a very stressful time. With one call, consumers receive the service, repair or replacement needed to keep their home running smoothly.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

#02

Tips on Winterizing Your Home

 

Take a few minutes to read and make sure you have properly winterized your home.

The NHSCA contributed to a terrific article on SheKnows.com 
Read the entire (original and unedited) SheKnows.com by Rolla Bahsous online here.

winterizing-your-home

How to get your home ready for the cold season
If you’ve already pulled out your winter coat and put snow tires on your car, there’s still one thing you’re missing before the cold weather hits. Most people completely overlook the few simple steps needed to winterize a house. It’s important to remember that while home service contracts generally provide service, repair or replacement for the major built-in appliances and systems in your home – such as dishwashers, electrical and plumbing systems, heating ventilation and air conditioning systems  – regular maintenance is still very important.

  1. Self-check your heater and HVAC

Turn the heat on and be sure that all the rooms in your home are getting enough heat through the vents. Check and change your HVAC (furnace) air  filters.  “Many of us think of changing our furnace filters just once or twice a year, yet experts say we should replace them every month during the heating season,” says Andrea Woroch, a consumer and money-saving expert.

  1. Schedule a professional furnace maintenance visit.

A furnace tune-up not only includes cleaning that keeps your furnace running efficiently, but it also catches small problems before they turn into big problems that can not only cause inconvenience and discomfort. An annual maintenance contract from a local, trusted HVAC company is also a great idea. They will not repair or replace broken units like a home service contract, but they go a long way to keeping your home running happy and healthy.

  1. Check batteries and update your fire and CO detectors.

Check and replace all batteries as needed. Don’t forget a good quality carbon monoxide detector in your bedroom and near your gas heater and/or gas water heater.  Even a small problem can lead to gas leaking into your home or dangerous carbon monoxide levels. Carbon monoxide (CO) is a deadly, colorless, odorless, poisonous gas. According to the Consumer Product Safety Commission, on average, about 170 people in the United States die every year from CO produced by non-automotive consumer products. Be mindful, many  detectors typically need to be replaced every five to seven years. 

  1. Get the fireplace ready

If you have a fireplace, be sure it’s ready by ensuring the chimney is clean. If you have burned a few cords of wood, having a professional chimney sweep is mandatory. If you don’t have a fireplace but wish to have the cozy ambience, check out some faux fireplace units at your local décor store. Some of these fireplaces are designed to emit heat in addition to the “fire” display.

  1. Check your gutters

Letting leaves pile up in the gutter can cause big problems any time of year, and in cold weather especially. The NHSCA says, “During winter months, leaves can potentially cause melting ice and snow to backup into your attic, and even your basement. Be sure to pay particular attention to gutters that have branches directly over them. Not all trees shed their leaves at the same time so you may need to check the gutters in both the fall and early winter.”

  1. Check your windows

To keep warmth inside your home, inspect all windows and make sure there aren’t any cracks where heat may escape. It might be wise to cover all your windows facing North with a plastic sheet. You can find these at your local hardware store and the cost far outweighs the heating saving you’ll gain by covering your windows. Pella Corporation, the leading manufacturer and designer of windows, doors, blinds and shades for homes and commercial buildings, also recommends clearing windowsills of dirt and debris since pre-winter window cleaning is one task most homeowners overlook: “Debris like sand, dirt or leaves can get caught in windowsills and moving parts of windows or doors. Clean these areas with a dry paintbrush to create a tighter seal and enhance window and door performance.”

  1. Check the outside of your house

If you haven’t eyeballed your home’s exterior in a few months or more, now’s the perfect time to reassess at the start of a new season. Before that first snowfall, Pella Corporation recommends repairing or replacing damaged exterior surfaces that could expose your home’s interior to the outside elements. Pella Corporation advises, “Cracked or deteriorated wood on the roof or near the foundation is typically associated with water penetration and may allow moisture or cold air to leak into your home. Look closely for signs of moisture leakage and replace damaged wood. Consult a professional to help correct any roof or drainage problems around your home.”

  1. Remove leaves around your outside HVAC unit.

The HVAC unit is likely your home’s largest operating system. The compressor part of your air conditioner is located on the exterior of your home and can become inefficient with debris and leaves blocking it. You can even use a wet dry vacuum or your hands to remove the debris from the bottom for manual cleaning. Wear gloves if using your hands for manual cleaning and turn off your main breaker first – just to be safe.

  1. Turn off exterior faucets

This may seem like a no-brainer, but it’s also one of the easiest home winterizing tips to overlook — because it’s so simple. According to the NHSCA, “Un-drained water in pipes can freeze, which will cause pipes to burst as the ice expands.” The NHSCA recommends, “Start by disconnecting all garden hoses and draining the water that remains in faucets. If you don’t have frost-proof faucets (homes more than 10 to 15 years old typically do not), turn off the shut-off valve inside your home.

  1. Install a programmable thermostat

To keep home temperatures regulated and energy costs to a minimum, we recommend installing a programmable thermostat to lower temperatures when the house is empty and warm it up again in the morning. We have used and love the internet controlled NEST brand which retails for about $199.00. However cheaper models are available that work fine. Woroch says, “You can pick one up for as little as $20 and save an average of 10 percent a year on your heating and cooling bill. Since some of these are expensive, look for deals to save money on programmable thermostats and other home energy products.”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit  http://www.homeservicecontract.org or call 913871-5600.

 #10a