The What, How and Why of Home Warranties

A home is the single largest investment that most people will ever make. The last thing that any new home owner wants to deal with are costly repairs or the replacement of complex or aging systems. When purchasing a newly built home, make sure there is a home warranty in place and for ‘resales,’ hire a Home Inspector to look over the home.

For information on home warranties, go to the companies & sites listed below:

• Alberta New Home Warranty Program www.anhwp.com
• Atlantic Home Warranty Program www.ahwp.org
• In BC, The Homeowner Protection Act requires all residential builders be registered with the Homeowner Protection Office. For further information on the Act, go to the HPO address at www.hpo.bc.ca.
• Manitoba New Home Warranty Program www.mbnhwp.com
• National Home Warranty – in BC, Alberta, Saskatchewan and Manitoba www.nationalhomewarranty.com.
• New Home Warranty Program of Saskatchewan, Inc. www.nhwp.org
• Pacific Home Warranty www.pacificwarranty.com
• CMHC – across Canada www.cmhc-schl.gc.ca
• Tarion Warranty Corporation (Ontario) www.tarion.com
• The Travelers Guarantee Co. of Canada www.travelersguarantee.com.

Example

BRITISH COLUMBIA – Homeowner Protection Act

The purposes of the Act are to strengthen consumer protection for buyers of new homes, to improve quality of residential construction, and to support research and education respecting residential construction. A further purpose of this Act is to establish a Reconstruction Program to provide financial assistance to eligible homeowners for home reconstruction. Homes built by Licensed Residential Builders are covered by mandatory, third-party home warranty insurance. The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.

Coverage

As a minimum, this coverage includes:

• 2 years on labour and materials (some limits apply)
• 5 years on the building envelope
• 10 years on structure

It’s the strongest construction defect insurance in Canada. Some homes have home warranty insurance that exceed this minimum requirement.

Benefits of the program include

• Reduced Liability Period
• Third Party Administration
• Industry Standard Warranty Protection
• Customer Service
• Competitive Pricing
• Quality Assurance Program

Having your ‘dream’ home built

It is highly important that the relationship between the Builder and Home Buyer be one of mutual respect and honesty. It is not necessary that you agree on everything, but you must have an open mind when sharing ideas. It should remembered that the Builder is a building professional and his/her ideas come from a wealth of experience. Other things to consider:

• Share ideas clearly
• Don’t wait until the last minute to make thoughts known
• Find a way to have your Builder give you regular updates
• Schedule on-site visits well in advance and by your Builder’s policies
• And most importantly… relax and enjoy the home building process

A purchase contract exists between you and your Builder regarding the construction or purchase of your home. The purchase contract is that document that fully describes what your obligations are to the Builder and what the builder’s obligations are to you, the Purchaser. In its most basic form, the Purchaser is obligated to take possession of the home at the contracted price and the Builder is obligated to build the home to contractual specifications and then transfer title to you at the completion of the home. It should be noted that there are often “adjustments” to the purchase price and you should discuss these fully with your Builder before you sign the contract. For more information contact Canadian Home Builders Association.