The Alberta government has introduced legislation that would make warranty protection on new homes mandatory — and likely boost the price of an average house by $1,700 to $2,000.
If passed, the New Home Buyer Protection Act would require home builders to guarantee their labour and materials for one year, and two years in the case of problems related to delivery and distribution systems like plumbing and heating. It would also mandate a five-year warranty on building envelopes, with extended protection available if home buyers wish to purchase it. Finally, major structural components would require 10 years of coverage.
Speaking in front of a newly constructed home in Edmonton on Thursday, Municipal Affairs Minister Doug Griffiths said the legislation would increase the accountability of builders and warranty providers, with clear standards and guidelines.
Most builders currently provide one-year warranties on materials and labour, and five years of coverage in the case of major structural components. Griffiths pointed out that this isn’t standardized, and Alberta’s hot economy and skilled labour shortage increases the risk of problems.
The minister thinks most buyers will happily pay the resulting increased purchase price for the peace of mind it will give them.
“With the average home price being over $300,000, this looks to be a fraction of a percentage of the cost of a new home.”
The new act is expected to come into effect next fall. It would apply to single-detached homes, as well as condominiums, modular homes, mobile homes and dwellings on recreational properties.
The warranty requirements would not apply to homes constructed by builders for their own occupancy, unless they sell them during the warranty period. Three other provinces already have mandatory home warranty programs: British Columbia, Ontario and Quebec. But Griffiths thinks Alberta’s proposed coverage is superior.
“We are offering the most comprehensive, strongest protection for people who build new homes.”
The government is also seeking to strengthen the enforcement of building codes in Alberta. It wants to increase the limitation period for penalties for non-compliance to three years from six months. The maximum penalty for first-time offenders would jump to $100,000 from $15,000, and for a second offence the top fine would become $500,000, up from $30,000.
Dan Ouwehand, past-president of the Canadian Home Builders’ Association — Central Alberta, said earlier this month that his organization supports mandatory new home warranty protection. He pointed out that CHBA members are already required to provide warranty protection, and that the organization provided input to the government while it was preparing the new legislation.