Warranty

1-2-5-10 Coverage

Alberta’s New Home Buyer Protection Act stipulates that all new homes must include warranty coverage of one year for labour and materials, two years for delivery and distribution systems, five years for building envelope protection and 10 years for major structural components. Following are more detailed explanations of these coverages as well as warranty coverage limits and commencement dates.

1 Year Labour & Materials

Mandatory warranty includes one year’s coverage for defects in materials and labour. This addresses issues with the way your home was built or the materials it was built with. It includes such items as flooring, trim and fixtures. For a single-family home, a multi-family unit or multi-family common property, this coverage applies for one year starting on the warranty commencement date

2 Year Distribution Systems

A new home warranty must cover defects in labour and materials related to heating, electrical and plumbing systems for two years from the warranty commencement date. This applies to single-family homes, multi-family units and warrantable multi-family common property.

5 Year Building Envelope

Homebuilders in Alberta must provide five years’ coverage for defects in the building envelope, which the New Home Buyer Protection Act defines as the system of components that separate the controlled interior air from the exterior (for example, the wall framing and cladding, roof and window installation). This coverage spans five years from the warranty commencement date for a single-family home or for multi-family common property. Warranty providers must offer an optional two-year extension on building envelope coverage for a total of seven years’ coverage.

10 Year Structural Integrity

Mandatory warranty covers the key structural components (for example, the frame and foundation) of single-family homes and multi-family dwellings for 10 years from the warranty commencement date. Coverage applies to defects in material and labour that result in the failure of a load-bearing part of the new home or cause structural damage that materially and adversely affects the owners’ ability to use and safely occupy the home.

Living Expenses

If a new home is uninhabitable as a result of a defect or while warranty work is underway, the Program will pay up to $150 a day (to a maximum of $15,000) for reasonable living expenses incurred by the insured.

ENHANCEDPROTECTION

To allow our Builder Members to customize their warranty offerings and give their customers even greater peace of mind, the Program offers optional warranty products that go beyond the province’s mandatory “1-2-5-10” coverages:

• Pre-Possession Insurance (single-family homes)
• Deposit Insurance (multi-family units) Extended Building Envelope Coverage

Pre-Possession Insurance

A combination of deposit insurance and home completion insurance, optional* Pre-Possession Insurance protects a purchaser’s investment in a single-family home from the time a deposit is made until the mandatory warranty commencement date. In the unlikely event of default by a Builder Member, the Program will reimburse the purchaser’s deposits up to 20% of the single-family home’s purchase price (excluding land) to a maximum of $100,000. * Pre-possession insurance is an optional product that the Program offers to our Builder Members. The Government of Alberta does not mandate inclusion of this coverage in a new home warranty.

Deposit Insurance

In the unlikely event of default by a Builder Member of the Program, optional* Deposit Insurance covers a purchaser’s deposits on a multi-family home up to 20% of the home price (excluding land) to a maximum of $50,000. (Maximum amount is project-specific and may fluctuate; please confirm the amount with your Builder.) Deposit insurance begins upon payment of the initial deposit under the Purchase Agreement and ends when the unit’s mandatory warranty coverage commences.

Deposit insurance is an optional product that the Program offers to our Builder Members. The Government of Alberta does not mandate inclusion of this coverage in a new home warranty.