home warrant; new buyers; things to be aware of; real estate; lawyers

Things to know when buying a new home.

What You Should Know About Warranties On New Homes In Alberta

Building your new home is an exciting process. Unfortunately, builders, technicians, plumbers, electricians and others who you paid to build, install, and fix things in homes will sometimes, make mistakes that may be very costly to repair. This can lead to defective workmanship cases where the home owner sues the contractor for poor workmanship to recover costs for repairs. New home warranties can help protect you when you buy a new home in Alberta.

On February 1, 2014, Alberta’s New Home Buyer Protection Act protects every new home built by contractors, from single family homes to condominiums. It is now legally required for all new homes to be protected under warranty which encourages builders to meet higher quality standards. Here are the top 10 things you need to know when hiring contractors to build your new home.

1) Do your Research Before Deciding on a Builder

Before selecting a builder, make sure you know how many years of experience they have in the business and ask for references of their work. This is important as builders must verify that the house being built meets the standards set out in the Alberta Building Code. Your builder is also responsible for partnering with a warranty provider, who is your primary point of contact during the construction of your home. Make sure you understand what is included in the warranty your builder provides and how to make a claim with your warranty provider.

Thinking of buying a home from a builder? You can enter the address of the property on: http://homewarranty.alberta.ca/public-registry/ to find out if the builder has been fined in the past or violated laws.

2) What Are Alberta New Home Warranties?

New home warranties provide you assurance from the home builder that your new home does not have any defects. If a defect is found and the warranty period is active, the builder will repair or replace the defect for free.

3) When Does My New Home Warranty Start?

Your New Home Warranty starts on the earlier of the two dates: (1) When the house is successfully transferred and the title is registered or; (2) when an accredited agency/regional/municipality services commission gives the homeowner permission to live in the new home (such as an occupancy certificate).

4) What am I Covered For and For How Long?

Legally, new home warranties are required in Alberta. All new homes will come with a warranty which covers, at a minimum:

  • Defects in finishes throughout the home such as paint and flooring for 1 year
  • Defects in labour and materials related to heating, electrical systems, and plumbing for 2 years
  • Defects in the exterior of the home such as the roof and walls for 5 years
  • Defects in the building’s structure such as its foundation and frame for 10 year

5) How Much Does my Warranty Cover?

Legally, at a minimum, you are covered up to:

  • $265,000 for houses
  • $130,000 for condominium unit.

6) When Is My Warranty Active?

You should know when your warranty is active to make sure that you are covered in case you experience an issue. To find this information, Alberta has an online public registry where, as of February 1, 2014, builders are legally required to put in the details of the warranty for every new home built.

Simply type in the address of your home in the public registry to find out more information about your warranty. This free service is also useful for realtors, lenders and municipalities.

Remember: If you discover a defect before the start date of a warranty, it is not covered!

7) The Pre-Delivery Inspection

Generally, when buying a new home, you will do a pre-delivery inspection (PDI) with the builder’s representative. During the PDI, you will walk through the property where you can closely examine the builder’s work. It is important to fill out a report completely and note any items that look missing, deficient, or incomplete. The builder will then be obligated to fix these items, typically within the first year. Be very careful to fully inspect your new home. Be systematic and methodical. Inspect each room and are of the home form top to bottom and ensure that all defects are listed.

8) What If I Choose to Build My Own Home?

If you are the general contractor that is building your own home to live in, then you are the owner-builder. If you are having a home custom built to your design plans, you are the homeowner, not an owner-builder.

As an owner-builder, you can choose to get home warranty coverage for your home which can help protect your investment. You can also choose to apply for owner-builder authorization. This authorization allows you to build your home without a warranty meaning that you will bear all responsibility for the home’s construction. If you sell your home within 10 years, you must provide the remaining warranty for the home buyer.

Remember: Buying warranty coverage could be more difficult and costly to get if you don’t have one already in place.

9) My House is Built, What Are My Responsibilities?

As a homeowner, you are legally responsible for the basic upkeep of your home. Maintenance, such as mowing your lawn, landscaping, maintaining grading, cleaning out the eaves troughs and changing the furnace filters, are part your ongoing responsibility.

10) I Think I May Have a Claim… What Now?

If you have an issue with poor workmanship, find out if your warranty is active. If it is, talk to your builder to try and resolve the problem. As a home owner, you may want to immediately fire a contractor for his/her poor workmanship. BUT, doing so may also put you at risk of breaking the contract which limits some of your legal rights if you wish to sue. Legally speaking, you must give a reasonable opportunity for the contractor to correct his/her defects. It is CRITICAL to submit a claim with regard to new home warranties in Alberta before your claim period expires.

If you are still having issues, contact your warranty provider who will guide you on how to make a claim.

Remember: Speaking with your builder does not mean you have filed a claim under your warranty policy!

Not Getting Your Issue Resolved? We Can Help!

We are here to help! If you are having issues with filing claims under new home warranties, are out of the claim period or are not sure where to turn with new home warranties, contact Kahane Law Office in Alberta. Our team of experienced real estate lawyers can help with issues with your new home builder and your new home warranty.

You can reach us in Calgary at 403-225-8810 (toll-free at 1-877-225-8817), or email us here directly.