New Home Warranty

Are you thinking about building or in the process of building a new home? Did you know that effective February 1, 2014, every new home built in Alberta is protected under warranty through the New Home Buyer Protection Act (NHBPA)?

Types of Homes that are covered under warranty:

• Single Family Homes
• Duplex Homes
• Multi-Family Homes
• Condominiums
• Manufactured Homes
• Recreational Properties

The Coverage:

The Alberta New Home Warranty covers:

• 1 year for labour and materials (ie. flooring, trim and fixtures).
• 2 years for delivery and distribution systems (ie. plumbing, heating, and electrical systems).
• 5 years for building envelope protections (ie. wall framing, roof and window installation).
• 10 years for major structural components (ie. frame and foundation).
• 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/day (to a maximum of $15,000) for reasonable living expenses incurred by the insured.

Warranty Coverage Limits:

• Single-Family Homes: the lesser of the purchase price (excluding land) and $265,000.
• Multi-Family Unit (condo): the lesser of the purchase price and $130,000.
• Non-condominium Multi-Family Unit: the lesser of the purchase price and $265,000.

Commencement Dates

• Single-Family Homes: the earliest of the date a new home is occupied, the date an accredited municipality grants permission to occupy a new home, or the date the transfer of the title to the new home is registered.
• Multi-Family Unit (condo): the earliest of the date of occupancy or the date an accredited municipality grants permission to occupy a new home.
• Non-condominium Multi-Family Unit: the earliest of the date a new home is occupied, or the date an accredited municipality grants permission to occupy a new home.

Enhanced Protection:

Builder Members are able to customize their warranty offerings and provide their customers with greater peace of mind when building a new home. The Program offers the following optional warranty products:

Pre-Possession Insurance (single-family homes)

• Protects a purchaser’s investment from the time a deposit is made until the mandatory warranty commencement date.
• In the event of a default by the builder, the Program will reimburse the purchaser’s deposit up to 20% of the purchase price, up to a maximum of $100,000.

Deposit Insurance (multi-family units)

• 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.
• Begins upon payment of the initial deposit under the Purchase Agreement and ends at the mandatory warrant commencement date.

Extended Building Envelope Coverage

• Protects purchasers from defects in the building envelope for two years over and above the mandatory five-year warranty coverage.
• For multi-family units, only the Builder Member or condominium corporation can opt in for this additional coverage.

Warranty Provider:

• Effective December 1, 2015, The New Home Warranty Insurance (Canada) Corporation, also known as the NHWICC, assumed all warranty liabilities and obligations of the program.

For more information on The Alberta New Home Warranty Program, please visit their website here.

Thank you,

The Costen Insurance Team