I just moved into a new (new to me) condo, and I'm quite excited about it. So, over the past few weeks, I've been spending much of my free time painting and otherwise making it home. Well, one of the things I'm doing is replacing all of the electrical outlets and switches. Honestly, this is more of a cosmetic thing, replacing the old, dirty, sometimes painted over outlets with new, clean ones. Well, here's my problem:

The building is old (1942). The units were remodeled in 2005, but they weren't gut renovated at that time. Several (though not all) of the walls are still plaster, and, now that I'm opening up the wiring, some of that appears quite old as well (though it is all connected to a modern circuit breaker). I'm fairly handy and have done a decent amount of basic electrical work in the past (replacing fixtures, outlets, etc). But, having worked mainly with newer homes with modern wiring, I haven't come across the frayed wiring I've found behind some of my outlets. The wiring is copper but rather than being cased in the rubber/plastic casing modern wires are, the wire insulation appears to be made of some sort of fabric-like material. At the ends, it's starting to fray into individual strings. I've seen mention elsewhere of bitumen fabric casings? Perhaps this is what it is?

In any case, on most of the outlets and switches I've been working on, the fraying has been minor and hasn't really interfered with the outlet replacement. However, on one of the switches and one of the outlets, enough of the casing has frayed away so that part of the copper wire is left exposed. When I screw everything back into place and flip the circuit breaker, the exposed wire causes a short (including small spark) and the circuit breaker immediately trips (the boxes in the wall in this case are metal and the exposed wire is evidently close enough to the box to cause the short).

Clearly, this is bad. But, what needs to be done to fix it? Is using electrical tape to cover the short bits of exposed wire sufficient? Is there another easy fix? Or does the wiring need complete replacement? As I'm a new homeowner, if it's the latter, do you think that would be covered by a home warranty (even if the problem was discovered while I was messing with the wiring)?

Thanks to anyone who can help me answer this question!

I've got bad news for you. The old fabric insulation is probably deteriorated in many places you can't see. Insects and other vermin that may have been in the apartment will have dined on the fabric, normal aging will do the same. Also the service rating of the panel may be too low for modern appliances ( unless it was upgraded by a previous owner )I think it would be wise to replace the wiring with a modern wire such as romex.

it is against code to monkey with knob and tube wiring, which is what you have. meaning, it is a fire and safety hazard as it sits, and you cannot legally fix it.

it has to be replaced.

a condo is a ahared building with others, and generally cities require multi-tenant facilities have their wiring and plumbing systems worked on by only a licensed electrician.

get some bids. the homeowners association might have rules, too, that you need to follow. in this case, they would be for everybody's safety, not because some wacky crank called a HOA meeting without notice in a crack house at 3 am to outlaw cats, parakeets, and Good Housekeeping magazine.

not that I'm against HOAs or anything... .

I do disagree with your assessment that it is against code to work with K & T wiring. While it is antiquated and most likely needs an upgrade the NEC does have provisions for working with it. Start with NEC Art 394. Hope this helps, good luck.