Building a New Home?
What you need to know:
Effective February 1, 2014, every new home built in Alberta will be protected under warranty, thanks to Alberta’s New Home Buyer Protection Act. All new residential construction including single family homes, multi-family homes. cottages, cabins, modular and manufactured homes will be required to show proof of warranty before a building permit will be issued. Renovations and substantial reconstructions may also require warranty coverage.
The minimum required terms of warranty coverage under the new Act will be:
- One year labour and materials
- Two years for defects in labour and material related to delivery and distribution systems;
- Five years on the building envelope, with a requirement for the warranty provider to offer the option to purchase 2 additional years of coverage; and
- Ten years for major structural components
Owner-builders will be exempt from the new home warranty requirement unless the property is sold within the warranty period. In that case, when the property is sold, the owner-builder must provide the buyer with warranty coverage for the remaining portion of the warranty period.
How will this affect you?
Proof of warranty and/or a warranty exemption is required prior to the issuance of a building permit. Building permits are issued by The Inspections Group and are mandatory to build a new home. If you do not have proof of warranty, then a building permit cannot be issued.
The new home warranty will cost approximately $1700 - $2000 for an average home, or less than one per cent of the average house cost.
When purchasing a home you will be able to access a public registry, which will track warranty for homes that require coverage. Information in the registry will include key warranty dates and contact information for the warranty provider as well as the amount of remaining coverage. The registry can be accessed on-line at www.HomeWarranty.Alberta.ca.
Where can you get further information?
If you have any questions with a building project, contact a New Home Warranty Compliance Officer at 1-866-421-6929. Additional information is also available at http://www.municipalaffairs.gov.ab.ca/alberta_home_warranties.cfm, which includes a link to Frequently Asked Questions about the New Home Warranty Program.
What are the penalties for non-compliance under the Act?
Penalties for failure to provide warranty are a maximum fine of $100,000 for a first offence and a maximum of $500,000 for second and subsequent offences.