Frequently Asked Questions
These are some common questions about the New Home Buyer Protection Act. If you don't see an answer to your question, please contact us toll-free at 1-866-421-6929.
What types of homes are covered?
The New Home Buyer Protection Act applies to new homes constructed with a building permit applied for after February 1, 2014. The legislation covers single family homes, duplexes, multi-family homes, condominiums, manufactured homes (including ready to move homes), and recreational properties. The legislation does not cover dorms, work camps, hotels and rental apartments.
If you are an individual constructing your own home to live in (owner-builder), you have two options. You can get home warranty coverage for your home or you can apply for an owner-builder authorization, which, if approved, will allow you to build your home without a warranty. If you sell your house within 10 years, you will need to obtain the remaining warranty coverage for your buyer.
Any manufactured/modular or ready to move homes moved to Alberta from another province or country would be required to carry warranty if they were new enough to fall under the warranty periods. For example, a manufactured home that is four years old and is being moved into Alberta from Saskatchewan would have to have warranty of one year for building envelope and six years for major structural.
- One year labour and materials;
- Two years for defects in labour and material related to delivery and distribution systems;
- 10 years for major structural; and
- Five years on building envelope, with a requirement for the warranty provider to offer the option to purchase additional years of coverage.
To learn more, view a one-minute information video on warranty coverage.
What is a home’s building envelope?
“Building envelope” refers to the shell of the home, including the roof and walls.
The building envelope is the separation between the interior and exterior environments of a building, which protects the indoor environment and facilitates climate control.
The building envelope is a common area of failure and is currently only covered by warranty for one year. Building envelope issues can take at least three years to emerge, and repair costs can range from tens of thousands to hundreds of thousands of dollars.
Is five years a reasonable amount of time for building envelope coverage?
Research indicates that it takes at least three years for building envelope issues to become apparent.
BC has offered five year building envelope coverage for the past 10 years, and that has proven to be effective and has helped lead to an improvement in the standard of construction in that province.
In Alberta, the New Home Buyer Protection Act provides a minimum five years coverage, with the requirement that builders offer home buyers the option of purchasing additional years of building envelope coverage.
When did the legislation take effect?
The New Home Buyer Protection Act took effect on February 1, 2014.
The Act applies to new homes constructed with a building permit applied for after February 1, 2014.
What will warranty coverage cost the home buyer?
It is expected that new home warranty will add about $2,500 to the cost of an average home. Exact cost will vary, depending on the warranty provider, the builder, and the home.
In January 2012, the average price of a home in Alberta was $342,000. Based on that average, warranty coverage would cost less than one per cent the price of the home, and less than many of the upgrades often made to a home during construction to protect the biggest investment most people make.
Are renovations covered?
The builder will be required to provide mandatory home warranty protection when 75 per cent or more of a rebuilt home is additional new construction as a result of major renovation. More information will be available in the Registrar Bulletins.
- Find a warranty provider willing to provide coverage on your construction projects. Builders can find more information about working with a warranty provider in Alberta’s New Home Buyer Protection Act for Small Builders.
- Contact Municipal Affairs to become an authorized user of the online new home registry.
- After receiving your user authorization, create your builder profile.
- Enter a construction project in the registry. This will include identifying the company that will provide warranty coverage on the project and paying the applicable fee.
- After your warranty provider confirms coverage and the project registration is approved, you will be able to receive a building permit.
- Contact Municipal Affairs to become an authorized user of the online new home registry.
- Apply for an owner builder authorization online. This will include stating your intent to live in the home, indicating whether you have a registered interest in the land, and paying the applicable fee of $750.
- Your application for owner builder authorization will be assessed. If it is approved, you will be able to apply for a building permit.
How will permit issuers know that warranty coverage or an owner builder authorization is in place on my project?
Permit issuers will be able to use the Government of Alberta’s online new home registry to determine whether warranty coverage or an owner builder authorization is in place on a project. As well, the system will enable builders and owner builders to provide printed confirmation, if required by the permit issuer.
How will buyers know which builders are a good risk?
Buyers should research the builders they are considering contracting with to build their new home, including how long the builder has been in business and asking for and following up on references.
How will people know if a resale home has warranty on it?
Alberta’s new warranty program includes an easy-to-use online public registry. People shopping for a new home will be able to use the registry to find out if the home has a warranty and how much coverage remains.
If your home has a warranty under the new program, you’ll be able to access warranty information by simply typing in the address of the home. This will help you track key dates and find contact information for your warranty provider.
The registry may also be accessed by realtors, lending institutions, lawyers and others.
To learn more, view a one-minute information video about the public registry.
- Get to know your warranty dates to ensure coverage is active for the issue you’re experiencing.
- You may contact your builder directly to discuss the issue and attempt to resolve it.
NOTE: Contacting your builder does not mean you’ve made a claim under your warranty policy.
- If you still need to make a claim, contact your warranty provider. Every provider’s process is unique–they will guide you through their specific requirements and procedures.
To learn more, view a one-minute information video about the warranty process.
Be sure to read your warranty policy carefully in order to find out what is covered, including any conditions, exclusions, expiry dates, or claim reporting cut-offs that you need to be aware of. If you need more information regarding a dispute, please visit the Superintendent of Insurance’s consumer information.
How does the program apply to condos and common property?
Condo purchasers have the same warranty protection as that available to single family homes - one year on labour and materials, two years for defects in labour and material related to delivery and distribution systems, five years on building envelope (with the option to purchase additional coverage), and 10 years on major structural.
Determination of the commencement date for warranty coverage on common property and common facilities includes the builder entering into an agreement with a qualified person to complete a Building Assessment Report (BAR). Detail around timelines, submission, the form of the report, etc. is included in the regulations. More information on the BAR is available in the Registrar Bulletins.
How does the program work for buildings that are converted into condos (i.e. rentals to condos and industrial/commercial space converted to residential condos)
For buildings that are less than 10 years old, warranty would be required for major structural. If the building is less than five years old, then building envelope coverage would also be required. For buildings more than 10 years old, warranty would not be required unless the conversion met the reconstruction threshold.
Municipal Affairs will develop guidelines and assist municipalities in determining when the threshold for substantial reconstruction is met.
How will the implementation of the program affect municipalities?
Municipalities and permit issuers will be required to check for proof of warranty before issuing construction permits. They will have access to an online database to confirm warranty coverage.
The New Home Buyer Protection Act does not affect a municipality's requirement to comply with the Safety Codes Act. Accountabilities set out in the Safety Codes Act, and the accreditation agreement remain the same.
Municipalities will have to do a small amount of additional data entry upon issuing the permit.
Municipal Affairs has provided information to assist municipalities in meeting the new requirement.
Will the program affect the number of inspections done to a home under construction?
Based on what we’ve seen in other jurisdictions that have implemented mandatory warranty programs, we expect warranty companies could increase the number of inspections they conduct on new homes in order to manage their risk. These inspections would not replace or supersede those required by the quality management plan.
What are the penalties for non-compliance under the Act?
Penalties in the legislation against builders, warranty providers, and others for not complying with the Act are up to $100,000 for a first offence and up to $500,000 for second and subsequent offences.
As a home buyer, how do I get the warranty? Do I need to contact warranty companies and choose a warranty?
The home warranty coverage will already be in place when you buy your new home. Home buyers do not need to find a warranty provider or contact warranty companies. Builders are responsible for making sure that the home is enrolled with a warranty provider and that the right coverage terms are in place.
To learn more, view a one-minute information video about providing warranty coverage.
Why is the coverage limit/rebuild amount set at $265,000?
The coverage limits are based on the average cost of rebuilding a home. This includes the structure and does not include the land costs, contents, landscaping etc. A homeowner can choose to buy additional coverage if they want. The limit must not be less than the original purchase price or $265,000 for a single-family home and $130,000 on multi-family units. There is also up to $3.3 million in additional coverage for common property in each building of multi-family projects. This ensures multi-family units have equal coverage to single family homes. More information and details are available in the regulations.
How much is the builder registry fee? What does it cover? Who pays it?
Home builders will pay a registration fee of $95 per unit to fulfill the requirement of submitting the property to the Government of Alberta’s public registry. This fee will cover the cost of operating the public registry. The public will be able to access the public registry and look-up the status of a home warranty at no cost. Owner-builders will also be required to pay an application processing fee of $750.
Builders can find more information about working with a warranty provider in Alberta’s New Home Buyer Protection Act for Small Builders.
Updated June 18, 2015