When purchasing a newly constructed home in Alberta, many buyers are comforted to know that as of Feb 2014, it is required that home buyers are provided a new home warranty for their home. While some base requirements between the programs are the same, there are differences in the various programs and some details that all buyers should ask when reviewing the warranty.
1. Which warranty program does the builder offer? There are numerous options to a builder with a difference in coverage to the buyer based on the warranty provider. Each property can be looked up in the registry to determine the builder and warranty provider. Not all programs/providers offer the same coverage or guarantees.
2. What is the commencement date of coverage? This can be earlier than your move in date if occupancy was granted prior. This information is available from the warranty provider. Should you be purchasing a constructed home or spec home the warranty period may have started significantly earlier than your possession date.
3. What is covered and what is not covered? Review the policy details to ensure you understand what is covered by the program and for the duration of time. General guidelines include:
1 year - This takes care of finishes throughout the home, including any defects in flooring, paint or trim.
2 year - This primarily covers defects in labour and materials related to heating, plumbing and electrical systems
5 year - Building envelope means the exterior shell of the home, including the roof and walls. Two additional years of coverage are available.
10 year - This covers the key structural components of your home, including its frame and foundation.
It is highly recommended that homeowners have their homes inspected by an independent inspector at possession and before some of these critical dates to ensure they don't miss deadlines for submitting claims.
4. Are there any financial limitations on coverage and what is the claims process?
In a single-family home, townhome, row home or duplex unit, the warranty will cover the purchase price of the home to a maximum of $265,000. Any repair costs in excess of $265,000 will not be covered.
For a multi-family residential unit under a condominium plan, the warranty will cover the purchase price of the home up to $130,000, and anything beyond will not be covered.
For an overview of the warranty program: http://www.homewarranty.alberta.ca/
Each warranty provider has their own process for handling claims. Review the home buyer information for details
5. Does the warranty provide deposit protection for buyers?
Not all builders provide this protection. Ask your builder about the details of the coverage offered.
As always, please contact me direct should you have any questions and we can get the right resources to you.