According to the Homeowner Protection Act and regulations, new homes built in B.C. by licensed residential builders must be covered by mandatory, third-party home warranty insurance.
It’s one of the strongest construction defect insurance coverages in Canada.
At a minimum, home warranty insurance coverage includes:
• 2 years on labour and materials (some limits apply)
• 5 years on the building envelope, including water penetration
• 10 years on the structure of the home
The two-year labour and materials coverage covers any defect in labour and materials for:
• 12 months on detached homes and on non-common property in strata units (including fee simple homes)
• 15 months on the common property of strata buildings
• 24 months on all new buildings for defects when related to delivery and distribution systems; defects related to the exterior cladding, caulking, windows or doors that may lead to detachment or material damage to the new home; coverage for violations of the Building Code that constitute a health or safety risk or is likely to result in damage to the new home; and defects which render the home unfit to live in.
Minimum coverage for third-party home warranty insurance is set by legislation. As a minimum, homes built by Licensed
Residential Builders must have 2-5-10 Year Home Warranty Insurance . Some new homes have warranty insurance coverage that exceeds the minimum requirement. You should carefully review your home warranty insurance policy documents which will provide specific details on the home warranty insurance coverage on your home.
The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.
Strata-titled homes have two policies of home warranty insurance: one on the home and the other on the common property. Sometimes when the coverage of a new strata-titled home starts, the coverage on the related common property has already started — or expired. Coverage on the common property of strata-titled buildings starts when the first unit in the building is occupied or sold.
OWNER BUILDER EXEMPTIONS
The most common exemption from the licensing and home warranty insurance requirements is a new home built under an Owner Builder Authorization. Unless home warranty insurance is provided, owner-built homes are subject to the 10-year Statutory Protection provisions of the Act. These provisions hold the owner builder personally responsible to subsequent purchasers for any defects in labour, materials or design for 10 years after first occupancy.
If you buy such a home and find defects, you must contact the owner builder directly. Any action to remedy defects by a
purchaser must be started within the 10-year period.
For more information on new home warranties, please contact Marco Pontillo.