The Sky is Falling… or Is it My Roof?
Homeowners throughout the Southeastern United States have been shocked to find the 30‐year warranted architectural shingles covering their homes are not only defective and failing prematurely, but in some cases, neither the manufacturer nor their insurance companies will cover replacement. This leaves the homeowner forced to pay the bill out of pocket for a replacement roof. In addition, homeowners are surprised and dismayed to find out that their insurance company may actually decline to renew coverage as a result.
BACKGROUND OF DEFECTIVE ROOFING TILES
Atlas Roofing Corp. of Atlanta, Georgia, (“Atlas”) manufactured the ChaletTM Designer series shingles to provide “a unique dimensional appearance” whose “layered look creates a beautiful eye‐catching roof for the finest homes — yours!” Similarly, the Atlas StratfordTM Designer series is described as “beauty and the brawn” featuring a “heavyweight shingle [that will] stay beautiful even against Mother Nature’s harshest conditions.” ChaletTM and StratfordTM series shingles were designed to simulate the highly desired 3‐D look of architectural style three‐tab shingles at a fraction of the cost.
Although Atlas typically provides a quality product, ChaletTM and StratfordTM shingles have been known to fail as early as one year after installation. The granule overlays producing double thickness in parts of the shingles are where the defects typically occur. Water permeates the granules producing gas bubbles that, when heated by the sun, burst causing blistering, cracking, and an unsightly appearance. These visual problems can sometimes be seen even from the ground.
Because the products have been discontinued, even a single broken shingle may require homeowners to replace the entire roof, since the size and composition make it impossible to make repairs with anything other than another Atlas ChaletTM or StratfordTM shingle, respectively.
30-YEAR LIMITED WARRANTY ISSUES
Although Atlas offered a 30‐year limited warranty against manufacturing defects, our research indicates numerous instances where they have been slow to respond to claims and have avoided liability based on counter claims of improper installation, installer not “Atlas‐certified,” failure to follow biannual maintenance recommendations, etc. Some insurers have replaced the roofs while others have denied liability and, in some cases, declined to renew the homeowner’s coverage. A number of attempts to certify individual lawsuits as “class actions” have, so far, failed. Copious amounts of information (and misinformation) are available on the Internet; although, information including how to file a claim, is available at Atlas’s ChaletTM‐specific website http://www.atlasChalet.com/ or, for claims based on a StratfordTM roofing system, https://www.atlasroofing.com/warranty/contact.
Available exclusively in the Southeast (and particularly popular around Atlas’s hometown Metro Atlanta), the Atlas ChaletTM and StratfordTM shingles were commonly used between 1999 and 2010. Claims have been made (and lawsuits filed) from Virginia to Louisiana. Any newly constructed home or replacement roof installed throughout the Southeast during this period may contain Atlas ChaletTM or StratfordTM shingles.
Altair Global has acquired four homes with Atlas ChaletTM or StratfordTM roofing shingles in 2017 alone. In each instance, due to market stigma, replacement has been necessary at an average cost of $15,000. As a consequence, Altair Global recommends any home eligible for purchase under a relocation program (i.e., Amended Value, Buyer Value Option, or Guaranteed Purchase Offer) that was constructed or reroofed during the years Atlas marketed the ChaletTM and/or StratfordTM designer series, be subject to a roof inspection to include, specifically, the manufacturer and brand/model/type (i.e., Atlas ChaletTM or StratfordTM). If either of these two series is present, we recommend the relocating employee immediately file a claim for replacement under his/her homeowner’s insurance and/or a warranty claim with Atlas.
Due to the stigma and difficulty obtaining insurance coverage, buyers are extremely reluctant to purchase a home with either of these roofing systems. Thus, unless the insurer or Atlas agrees to replace the roof, the company should be prepared to bear the cost of a new roof or deem the home ineligible for purchase and subject to direct reimbursement of non‐recurring home selling costs, with or without applicable tax gross‐up. Please contact your Altair Global Client Services or Business Development Vice President if you have any questions.
Photos courtesy of Atlas Information and are provided for informational purposes only. Regarding your specific situation, Altair Global recommends that you consult with your own tax or legal advisor as appropriate. Altair Global has provided this information as a service and convenience for your information only. It is not intended to replace your own legal or financial guidance and/or assistance and you are encouraged to seek the advice of your own tax and legal advisor. Further, the information contained herein is to our knowledge accurate to the extent of the data available to Altair Global as of the date identified. Altair Global does not assume responsibility for the accuracy of the contents hereof and is under no obligation to update the material contained herein.