ENSURING WARRANTY OBLIGATIONS 44 Federal Law

Many suppliers and customers still do not understand the issue of ensuring warranty obligations. New changes to 44-FZ, adopted by 124-FZ of April 24, 2021, added fuel to the fire.

Just a year ago, according to 44-FZ, customers were required to require suppliers to provide warranty obligations under the contract if the technical specifications specified warranty requirements (124-FZ). Now customers no longer have such an obligation; as of July 1, 2021, it has been replaced by a right. But there are still many unclear points on this topic. To reduce the amount of unrest and close remaining questions, we have prepared a new article.

Ensuring warranty obligations - what is this measure and why is it needed?

to pay guarantee obligations - cash and a bank guarantee. In both cases, the supplier provides them to the customer before the acceptance certificate under the contract has been signed to ensure a guarantee of the quality of the product (work, service) for the entire warranty period of operation.

In Part 4 of Article 33 of 44-FZ the term “warranty obligations” appears. What does this concept include?

• guarantee of quality of goods (work, services);
• guarantee period;
• scope of guarantees;
• requirements for product warranty service.

An important feature is that the customer can make demands on goods/works/services if necessary, that is, when he considers it necessary. Except in cases where the subject of purchase is machinery and equipment. Then it will be a duty. Therefore, procurement participants should carefully read the notice and tender documents to determine whether they contain this condition.

New suppliers do not see the difference between warranty enforcement and contract enforcement. These are completely different measures that should not be confused with each other.

Security for the execution of the contract is provided to the customer in the form of cash or a bank guarantee by the participant who wins the auction at the conclusion of the contract to reduce the possible financial risks of the customer in the event of non-performance or poor quality of work by the supplier.

Rules for writing a reminder letter

The letter does not have a standard, unified form, so it can be written in free form. However, when preparing it, it is worth adhering to some norms and standards of business correspondence.

The reminder letter must contain

• information about the sender and addressee (full names of companies, and if it is about the addressee, then also the position and full name of a specific employee),
• reason for the reminder,
• as well as references to laws and regulations that are relevant to the recalled problem or situation (if necessary).
• If the case concerns non-fulfillment of obligations or violation of the law, references to them should be listed, as well as possible sanctions and measures that the sender is ready to take to resolve the issue (indicating the deadlines or period).
• It would not be amiss to recall the possibility of solving the problem peacefully, satisfying both sides.
• In cases where any additional documents are attached to the letter, this should also be noted in its contents, indicating the number of attachments and pages of each of them separately.

The tone of the letter must be extremely polite and correct; if there is an address to a specific official, be sure to use the epithet “Dear.” In the reminder, distortion of facts, provision of incorrect information, and even threats are completely unacceptable. When composing a reminder letter, it is important to remember that at any time it can become a legally significant document.

This letter can be either very short, consisting of just one phrase, or detailed, including several points. In addition, a reminder can be sent more than once, several times (in such cases, phrases like “we remind you again,” “we remind you again”) must be entered into it.

The letter can be written either by hand or in printed form, but regardless of which option is chosen, it must be certified with a “living” signature. In addition, it must be registered in the outgoing documentation log. It is not necessary to certify the message with a seal, since from 2021 the requirement to use seals and stamps in activities for legal entities, as previously for individual entrepreneurs, has been canceled.

What is the difference between enforcing warranty obligations and enforcing a contract?

Let us separately name 2 more distinctive features in addition to those mentioned above:

1) The customer can make a demand for security of warranty obligations even when the provision of security for the performance of the contract is not required. For example, when purchasing computer equipment through an electronic request for quotation, the customer may not establish a requirement for OIC (Part 1 of Article 96 of 44-FZ), but may require warranty measures, because When purchasing equipment, he is obliged to indicate the requirements for warranty obligations in the technical specifications.

2) OIC is provided by the winner of the purchase before signing the contract, and security for civil defense is provided by the supplier (performer, contractor) before signing the act with the Customer.

Warranty and non-warranty cases for construction work

Naturally, the failure of structural elements, structures, and buildings is not always the basis for the contractor’s warranty obligations.

In construction and legal terminology, there are warranty and non-warranty cases.

IMPORTANT

A warranty case means such damage and other defects that arose due to the developer’s failure to comply with the technology, the use of low-quality materials (purchased even at the customer’s expense), as well as other violations of the rules and requirements for specific construction work (for example, approved SNiP standards).

A non-warranty case means such operation of a building, house, structure, or structural components that led to their destruction, defects, and other breakdowns. That is, during operation and other actions with the object, significant violations were committed by the customer.

For your information

The fact of occurrence of a warranty or non-warranty event is confirmed by defective and other inspection reports. But if the parties cannot come to a common denominator through negotiations, a special forensic construction technical examination is carried out.

Cases of mandatory provision of guarantee measures

The supplier must provide warranty coverage if the customer has specified this requirement in the documentation. Despite the fact that from July 1, 2021, the establishment of this requirement is a right and not an obligation for the customer (Part 2.2, Article 96 of 44-FZ), the supplier is obliged to fulfill it if the customer has used his right.

If the customer has established this requirement, then it applies to all applicants for the contract without exception (including representatives of SMP and SONKO).

demand warranty obligations only when the contract specifies warranty obligations , including requirements for the warranty period for the purchased products (works, services).

According to Part 4 of Art. 33 44-FZ, the customer is obliged to require warranty measures if machinery and equipment are purchased. In other cases, establishing this requirement is just a right.

There is no list of purchases for which the customer “has the right” to demand warranty measures. For example, when purchasing cabinets or construction services, the customer will most likely write down warranty requirements. But he may not do this, it all depends on his preferences.

In government procurement practice, there are cases when customers set a requirement for quality assurance and do not themselves understand why they are doing this. Such situations are typical when purchasing food products, medicines, and software. The bad thing is that, without understanding it, customers simultaneously demand to provide security for guarantee obligations in such purchases. Confusion arises due to the fact that customers do not distinguish between the terms “warranty” and “remaining shelf life”. The downside is that the presentation of requirements for guarantees and for ensuring guarantee obligations in the named cases does not formally violate 44-FZ.

What warranty period does the law establish for construction work?

What are warranty periods during construction? It would seem, why and why to give guarantees for construction work? Few people think that even when building a garage, a guarantee must be established in accordance with the contract or for the period established by law. What can we say about residential buildings in which people will live?

What period of construction work is considered to be the most optimal? What provisions of the legislation of the Russian Federation regulate the concept of a warranty period in the construction industry? What responsibility does the developer bear for negligence in his work and when is the responsibility removed from the developer?

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The warranty period is most often negotiated in the contract agreement. But there are also mistakes in its composition. Provided that the warranty period for the builders’ work was not discussed in advance, this does not mean that it does not exist at all.

Several articles of the Civil Code address this topic. The period of five years is established by Article No. 756, but the terms of the agreement will be of paramount importance.

Further, article No. 724 talks about the time frame within which it is necessary to find the flaws of unscrupulous contractors:

• if a guarantee was not discussed, claims based on the results of the work can be made, provided that defects are discovered in the first twenty-four months after the delivery of the object by the customer;
• the guarantee comes into force after the customer has accepted the finished object or should have accepted it;
• If the contract specifies a warranty period and it is less than two years, the customer can file a claim with the developer after the warranty for the work performed has expired. But he will have to prove that the shortcomings were discovered after the operation of the building, but they arose before the object was commissioned.

The main idea from these articles is the following: if a defect in the contractor’s work was discovered during the warranty and at the same time proved that it was his fault for causing the damage, he will have to correct everything at his own expense.

The customer can also submit his claims for compensation for physical, property and/or moral damage. The construction organization has the right to refuse to fulfill the customer’s requirements.

You can see how independent examination works in the article on our website. Or consult the duty consultant of the Internet portal “PravPotrebitel”.

The relationship in the construction industry between the customer and the contractor is of a contractual nature and must be formalized in a legal manner. The most commonly used template is a contract agreement.

The contract has a standard form. You can view an example of a typical agreement for construction work by downloading it from our website. Its content is not strictly regulated by law.

When filling out, it is necessary to comply with the rules of civil law common to all contracts. Including the warranty period is not a mandatory clause of the agreement.

The following points must be discussed:

• the work procedure, requirements for finished construction products, payment terms are discussed in detail;
• the period within which the contractor is obliged to deliver the facility;
• amount of payment for the contractor’s work, payment procedure (prepayment, partial payment, post-payment, etc.);
• responsibilities of both parties;
• rights of both parties;
• liability of the parties for violation of agreements;
• date, place and time of signing;
• details and/or personal data of the parties;
• signatures.

The terms of warranty service, at the request of both parties, can be included in the text of the contract as a separate clause. If a guarantee is established, then it will be necessary to rely on the terms of the contract (if it turns out that the object accepted by the customer does not meet the quality requirements).

In the absence of a clause on warranty service, Article 724 of the Civil Code of the Russian Federation comes into force. In this case, the customer is given twenty-four months to discover the defects. If the parties have no claims against each other, then the warranty period for construction work is established by law for 5 years. (Article 741 of the Civil Code of the Russian Federation).

Otherwise, you will have to collect evidence that the detected defect was made during the construction process.

The limitation period, provided that the delivery of the construction project was divided into several parts, begins to be calculated from the moment the entire project is delivered to the customer.

You need to pay attention to the following points:

• improper operation of the building relieves the contractor of all responsibility;
• the construction organization may classify the detected defect as natural wear and tear of the building;
• the contractor has the right to disagree with the customer’s opinion and not to fulfill his claims.

I would like to separately note one of the responsibilities of the performer. The Contractor is obliged to comply with legislation that is aimed at preserving the environment. For violation of these norms, the performer will be held accountable. The contractor has the right to refuse work or use materials provided by the customer if nature may be harmed as a result.

A construction organization can provide guarantees on the following points:

• performing the entire scope of work in good faith and in accordance with the requirements for quality and reliability in the construction industry;
• correct assembly, installation and fastening of individual structures;
• selection of only high-quality materials for use in the construction of the ordered facility.

We invite you to read: Deadlines for completing additional agreements

The rules for fulfilling warranty obligations during the construction of a new apartment building are regulated not only by the civil law institution. The Code comes to the aid of a federal law regulating the participation of equity holders in the construction of new buildings.

In this case, unless otherwise specified in the terms of the contract, the warranty period is five years and is calculated from the moment the act of acceptance of the apartment is signed by the first resident of the apartment building. Private houses usually have a warranty period of no more than three years.

The quality of design work can be assessed within two years. Roofing warranties range from two to ten years, depending on the materials used.

In general, after the customer has signed the acceptance certificate and indicated that he has no claims against the developer, it is quite difficult to prove his negligence. And sometimes it’s simply impossible.

Therefore, before signing any papers, you must consult with specialists.

It’s even better to order an independent construction and technical examination. This will avoid mutual claims and litigation in the future.

A work contract is a written agreement between the parties, as a result of which the contractor provides certain services (or work) to the client, for which he receives payment. Like any other contract, a contract agreement is secured by a number of guarantees provided for by the legislation of the Russian Federation.

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Warranty obligations are introduced into the contract agreement in order to protect the rights of the parties. In essence, this is the obligation of one party to eliminate the defects of the product and compensate for the losses incurred by the other party. A prime example of a warranty is a warranty on repair work.

Sample of a household contract

The warranty period under a work contract is provided by the Civil Code of the Russian Federation in Articles 721, 722, 724. The law in this aspect fully relies on a written agreement, other legal acts, or even business custom. These same articles are also responsible for the quality of work. The issue of limitation of actions is regulated by Article 725.

There are several types of contracts. This determines what guarantees can be used to protect the interests of the parties. The Civil Code distinguishes between contracts:

• domestic;
• building;
• to carry out projects and surveys;
• for the needs of the state.

Also, the issue of guaranteeing the preservation of customer benefits is regulated by the law on the protection of consumer rights, or more precisely, Article 8. The same law provides for termination of the agreement if irreparable deficiencies in the work of the performing party are identified.

Information on how to draw up a sample letter of guarantee for the fulfillment of obligations under the contract.

Here it is written how to return building materials according to the law.

This is important to know - the law on furniture guarantees in protecting consumer rights.

In the case of a construction contract, the main procedures are aimed at construction or repair work, and, as a result, the obligations become:

1. Guaranteed retention of part of the customer's funds.
2. Compensation for damages in case of inadequate quality of work.
3. Carrying out procedures again if repairs cannot be carried out and the quality does not meet the requirements of the law and the contract.
4. Warranty repairs (subject to the statutory warranty period for construction work).

The security deposit (guarantee retention) under a contract is the amount that the client retains in his account (they cannot be spent anywhere other than paying for the contract) until the result of the production is accepted. This type of guarantee is necessary so that the consumer, if significant deficiencies are identified in the work of the contractor, can use these funds to eliminate the problems that have arisen.

The amount of guarantee obligations and the period for their provision

Part 2.2 of Article 96 of 44-FZ states that the amount of security for warranty obligations cannot exceed 10% of the initial (maximum) contract price . For example, if the NMCC is 1 million rubles, then the GO can be set from 0 to 100 thousand rubles. inclusive.

Speaking about the timing of the introduction of CSOs, one should be guided by clause 1, part 13, article 34 of 44-FZ: if the customer has established this requirement, then in the draft contract he is obliged to indicate the procedure and timing for the contractor to provide security for warranty obligations.

Of particular interest is Part 7.1 of Article 94 of 44-FZ, which states that if the customer specifies a requirement to provide civil defense, then a document on acceptance of goods or work is issued after the contractor has provided this security in accordance with the norms of 44-FZ (this does not apply to a separate stage of contract execution).

That is, guarantee obligations must be paid within the time period specified by the customer BEFORE issuing the acceptance document, otherwise the customer simply will not sign the documents.

Construction guarantee depending on the type of work

The legal concept of a construction guarantee and its terms were discussed above.

In practice, most often customers are faced with situations where contractors offer them several types of guarantees within the framework of one construction agreement:

• warranty obligations for the entire constructed construction project (mandatory service life of the building, house, during which it will meet all technical and regulatory requirements);
• warranty obligations for individual elements and structures that make up the object (a mandatory service life that allows the building, house, structure to fulfill its design characteristics);
• warranty obligations for the work performed (the period during which surface and interior finishes will meet all construction and other requirements).

At the same time, you need to understand that for each type of work a separate period of time is established, and a deadline for reporting detected defects.

Attention

Immediately after completion of construction work, the contractor is obliged to issue a letter of guarantee to the customer.

If the specified cases occur during operation, the contractor, after eliminating them, is obliged to again issue the customer a letter of guarantee for the construction services performed, with a detailed list of all costs and materials.

Methods for ensuring warranty obligations under 44-FZ

Above we called these methods:

• transfer of funds to the customer’s account;
• provision of a bank guarantee.

The performer himself decides which method to choose. You should be guided by the amount of warranty obligations and the warranty period. The first option is suitable if the amount and duration of the guarantee are small; in other cases, it would be advisable to issue a bank guarantee.

The rules for issuing a bank guarantee are specified in Art. 45 44-FZ. Moreover, the supplier has the right to take either one general bank guarantee or two. One guarantee will cover the provision of contract performance before the conclusion of the contract , and the second will cover the provision of civil defense until the signing of acceptance documents .

One general bank guarantee will ensure the performance of work under the contract, and also contain the bank’s obligations to provide guarantee obligations. This measure is provided to the customer before signing the contract.

According to Part 3 of Article 96 of 44-FZ, a bank guarantee, both to ensure the execution of a contract and to ensure guarantee obligations, will have to be valid for at least 1 month after the fulfillment of contractual obligations (exceed the period for fulfilling obligations under the contract by at least 1 month ).

Methods of ensuring warranty obligations may change from one to another (if desired by the contractor). This right of the supplier is stated in Part 7 of Article 96 of 44-FZ.

Another distinctive feature of guarantee obligations from OIC is that its size cannot be reduced by the amount of work already performed.

Guarantee for construction work from the contractor

Based on established practice, as well as judicial consideration of disputes under construction contracts, the guarantee for construction work from the contractor consists of two components.

1. The period during which the customer will be able to safely operate the facilities, without routine and major repairs. If during this period of time the building, house, structure, or their elements lose their design features, the contractor is obliged to carry out restoration (repair) work at his own expense.
2. The period during which the customer is obliged to report identified deficiencies (malfunctions) of the construction project to the contractor. It begins to be calculated from the time the defects or other damage are discovered.

Additional information
An example would look like this: The construction organization gave a guarantee for the construction equal to 5 years of operation, and indicated that it is valid for 2 years from the date of detection of defects.

After acceptance, the customer began to use the premises, but after 3 years he discovered the presence of hidden faults. If he informs the contractor about this within 2 years, then the contractor will carry out restoration work at his own expense.

If after a two-year period, then the construction organization is released from such work, and repairs are done at the expense of the customer.

Return period for warranty measures under 44-FZ

44-FZ does not say anything about how the security for warranty obligations can be returned. And the return of OIC is discussed in detail in Part 27 of Article 34 of 44-FZ, so customers take advantage of this provision:

• within 1 month from the date of fulfillment of obligations;
• within 15 days if the purchase was carried out among SMP and SONPO.

We recommend that you carefully study the draft contract for return periods. If the customer has not indicated them, then use your right to send him a request for clarification of the provisions of the procurement documentation with a request to indicate this period.

How to send a reminder letter

The letter can be sent via

• email,
• by fax message
• or via Russian Post.

You can combine two options, for example, an email with a “live” item, especially if you support the latter with a receipt receipt (this will serve as another proof of the letter being sent and, more importantly, its delivery to the right hands). In any case, it is worth remembering that letters travel through Russian mail for quite a long time, so when using it, it is advisable to have some time left or duplicate this method of sending to others.

Nuances

Most of the nuances of the guarantee for construction work have been discussed above.

We also need to add a few more significant points to them.

1. The first question concerns the timing of identifying defects that would allow the developer to begin mandatory repairs. If they are not specified in the contract, then it is necessary to be guided by the rules of limitation periods established by the Civil Code of the Russian Federation. They establish 1 year from the moment the defect is discovered (the time during which you can go to court or file a claim).
2. The second nuance concerns the identification of defects during hidden work. Most often, hidden work is carried out in cases where deficiencies are identified in projects or design features of buildings and structures. They also come with a warranty from the developer.
3. If the customer is an individual, then such legal relations are subject to the rules established by the legislation on the protection of consumer rights. When providing low-quality construction services, the company can not only provide warranty service, but also pay a penalty in the amount of 2% per day of the total cost of the order.

A construction guarantee is the period during which the contractor’s obligations arise to eliminate shortcomings and defects that he made while carrying out the relevant construction work at his own expense.