Understanding New Home Warranty in Alberta construction imageNow that you’re ready to enjoy the good life in a bigger, fancier, and better located home, it’s wise to learn about how it’s protected. The information below will tell you everything you need to know about Alberta’s New Home Warranty Program and how it safeguards the well-being of your family and home.

First enacted in Alberta in early 2014, the NHBPA (New Home Buyer Protection Act) demonstrates the Canadian Government’s dedication to making sure all new property owners enjoy a secure home warranty, one that is clearly outlined and protects you against unexpected complications.

This new law requires all building contractors to submit evidence of warranty protection in order to receive construction permits in Alberta. The important dates and details regarding these home warranties can be viewed by the public. At the very least, the warranties for new homes built after the law was enacted must offer a “1-2-5-10” policy.

What is a 1-2-5-10 Policy?

The NHBPA stipulates that any newly-built home must have the following coverages as part of its policy.

1 Year for Labour and Materials

The policy includes a one-year warranty for problems with either labour or materials. This includes difficulties with how your house was constructed and/or the materials used to build it, as well as elements like the floors, trimming, and fixtures. This part of the policy lasts for one full year beginning from the date your warranty starts.

2 Years for Delivery/Distribution Systems

The next part of the mandatory policy covers flaws in the labour and/or materials associated with heating, plumbing, and electrical work for two years after the date the warranty takes effect.

5 Years for the Home’s Envelope

Alberta property builders are required to provide coverage for problems with a new home’s envelope for five years. The NHBPA identifies the “envelope” as the group of elements that separate the home from the outside environment (like the wall framework, roof, and windows).

This protection extends five years past the warranty’s start date for one-family residences. Before the NHBPA was passed, a typical home’s shell only a had a one-year warranty.

Since home envelope problems usually don’t show up for two or three years at the earliest, many property owners ended up paying huge repair costs after their brief warranty lapsed.

Builders must also offer homeowners the option of adding two years to their home’s envelope warranty for coverage lasting a full seven years.

10 Years for Structural Components

The compulsory warranty provides ten-year coverage for the primary structural elements (i.e. the frame and slab) of one-family houses beginning on the warranty’s start date.

This covers material and/or labour errors that either (a) lead to the breakdown of a weight-bearing element in a new house, or (b) result in structural wreckage that negatively impacts a property owner’s safety and well-being inside the house.

Understanding New Home Warranty in Alberta couple imageLiving Costs

If a flaw makes a home unfit to live in or the warranty work is still ongoing, homeowners will receive as much as $150 per day (up to $15,000 total) to cover living costs while they wait to move in.

Limit on Warranty Coverage

For a single-family home, the warranty covers either the property’s sales price (not including land) or $265,000, whichever figure is smaller.

Warranty Start Dates

For one-family homes, the warranty officially commences on either (a) the day you first move into the new home; (b) the day a licensed services commission authorizes you to move into the home; or (c) the day the home title is officially registered in your name, whichever happens first.

Optional Insurance

In order to personalize their warranties and provide their clients with an even stronger sense of security, many builders also offer optional pre-possession coverage through the Alberta New Home Warranty Program which exceeds the required “1-2-5-10” protection.

Pre-Possession Coverage

Pre-possession coverage is a mixture of down payment coverage and property completion coverage. It keeps a buyer’s deposit for a single-family property secure from the moment it’s paid until the day the warranty officially begins.

If for some unusual reason a builder defaults, the buyer’s deposit will be refunded up to one-fifth of the one-family house’s sales price (land excluded) or $100,000 at the most. Once again, this coverage is optional, and the Province of Alberta does not require builders to include this insurance in their new home warranties.

It just makes sense that a new home needs a good home warranty to preserve it. Alberta’s new home warranty program checks the status of builders and requires them to provide homeowners with warranties that are long-lasting and effective.

Whether you’re a new home buyer or are upgrading from a smaller house, your need for a solid home warranty that will protect your walls, floors, framework, and foundation is automatically met thanks to the Alberta New Home Warranty Program.