Warranty on new-built homes in Alberta

Every new home in Alberta is covered by a mandatory warranty under the New Home Buyer Protection Act. This new home warranty applies to any type of home in Alberta: single family home, duplex and condominium. Here follows a short overview of the Act, including a few tips for buying new-built homes or newer homes still under warranty.

 

Alberta’s New Home Buyer Protection Act (NHBPA)

Early in 2014, Alberta’s New Home Buyer Protection Act (NHBPA) came into effect. This act serves the interests of home buyers, home builders, and new home warranty providers. A new home can’t be sold until it has warranty coverage and is registered in the New Home Buyer Protection System. It is a reference for all parties regarding warranty coverage, and so a home buyer can buy a new home with more confidence.

Also, a buyer of a new home can learn more about potential defects and how to go about dealing with them with a builder and warranty. The Construction Performance guide for new home warranty in Alberta is a fantastic resource for all parties.

Minimum warranty on new homes

The act states that every home must offer a minimum warranty on the following:

• Labour and materials; a minimum warranty coverage of one (1) year. This minimum warranty is for items such as baseboards, flooring, trims around windows, staircases, cabinets, doors etc.
• Delivery and distribution systems; two (2) years. The delivery and distributions systems cover the plumbing, the electrical, heating and ventilation, air conditioning systems etc.
• Building envelope; must have a minimum of five (5) years warranty. The building envelope consists of the walls and the roof of the home.
• Major structural components; must have a minimum of ten (10) years warranty. These structural components include footings, foundation walls, load bearing walls, beams, roof trusses etc.

How to find out if a home is still under warranty (in Alberta)

Alberta has a public registry of Builder and Property Information, where anyone can check if a home is still under warranty. An individual can enter the address, and the result gives the property information;

-when the warranty started,
-the warranty provider,
-as well as the builder’s name.

If a home is still covered by the new home warranty insurance and sells, the new homeowner is entitled to the remaining coverage of the warranty. Therefore, the new owners should receive any policy documents from the old owners.

Also, this same register gives the option to check the builder’s information by entering their name. Only since December of 2017 does a builder of new homes require a builder’s license.

Pre-delivery Inspection from the builder

A pre-delivery inspection is still important and is done by the builder and the new homeowner. This is sometimes called a walk-through. This pre-delivery inspection needs to cover all the aspects that buyer and builder agreed upon in the contract. Usually, it is the first opportunity for a buyer to scrutinize the new home and point out any concerns of damage, unfinished items, perhaps missing items, etc.

Thus, all the systems in the home such as the furnace, hot water tank, air filter system and the like can be checked to make certain they are in working order. Also, a good builder will take some time to explain the systems and provide all manuals.

Many builders work with a specific checklist, also called a deficiency list, during this walk-through. Many items on this list are not necessarily covered by the home warranty insurance. For example, a non-functioning furnace must be dealt with by the builder and his supplier. Again, this pre-delivery inspection is extremely important. The Alberta New Home Warranty Program offers some tips on this pre-inspection. Also, if you google the pre-delivery inspection checklist or the PDI, many examples of these inspection lists are published on various websites.

Manuals and homeowner’s responsibility

Every owner of a new-built home must receive an information package and a maintenance manual from the builder or the insurance company. As with every warranty policy, the homeowner is still responsible for good upkeep of the home. This means that the homeowner must take proper care of the home and is obligated to take action to contain any damage to the home. If, for example, a pipe bursts, the homeowner must take proper care and turn off the water supply to prevent more damage. Or if a homeowner never replaces the filter in the furnace, a warranty can be void.

Should you perform a home inspection on a brand new home?

Our opinion is yes, always do a home inspection, even on a brand new home! However, many builders don’t allow a home inspection before handing over the keys. Instead, builders offer a pre-delivery inspection. This pre-inspection is not exactly the same, since the home inspector is independent. Also, importantly, a licensed home inspector uses thermal imaging. This thermal imaging alone is its money’s worth of the entire inspection. Just one example of what thermal imaging can see is missing insulation in between walls and in the attic. And more often than one should expect, home inspectors do find issues in brand new homes. In general, the quality of building, especially ‘cookie-cutters’, has declined over the years.

If the builder does not allow a home inspection before releasing the keys, it is always prudent to perform a home inspection as soon as keys are released. With this independent home inspection report, a buyer can report any other issues back to the builder. And if the entire inspection shows no issues, at least the buyer has peace of mind.

Where to turn to for issues with a brand new home

Issues with your brand new home? The new home warranty overview of the government of Alberta is a good place to start.

Also, The Alberta New Home Warranty Program has a fantastic guide to new home care and maintenance. Learn more about anything in your new home, from countertops qualities to interior climate control to roofing and the electrical. This Alberta New Home Warranty Program also has great resources on water management in and around the home, such as for window wells and sump pump systems.

 

Please note: The above is general information and not considered legal advice. We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us or speak to your legal advisor.