Understand Your New Home Warranty

Protect your biggest financial investment with a solid understanding of what's covered under warranty and what isn't

Credit: iStock/Feverpitched

When a home has a warranty, it stays with it, even if you move

Warranties don’t cover everything in your new home, so be sure to brush up on what’s protected

In British Columbia, all single family or multi-family homes must be registered under the New Home Warranty program, as regulated by the Homeowner’s Protection Office.

This requirement applies to licensed registered builders. However, an owner-built single family dwelling, built for the owners’ personal use, is exempt from this requirement. The owner/builder must receive approval from the HPO prior to starting the building process and must live in the home for at least 1 year before selling it.

How the New Home Warranty Works

Licensed registered builders are required to purchase the new home warranty for each home they build. Upon subsequent sale, the cost of the warranty will be included in the purchase price of the home. The warranty stays with the home, meaning if the home is sold by the original owner, the new owner will still be covered by the remaining balance of the warranty.

The warranty commencement date is based on whatever comes first – date of occupancy, date of the occupancy permit or date of the legal title transfer to the first owner.

Warranty Terms and Time Periods

You may be familiar with the term 2-5-10 warranty when it comes to newly built homes. The term 2-5-10 refers to the duration of the warranty with respect to the items it covers.

Two Years: Two years refers to the warranty period for items on the interior of your dwelling. The first 12 months of the warranty period applies to any defects in material and labour in your dwelling, such as damaged appliances, marks on your walls, etc. In multi-family dwellings, common areas are covered for 15 months for defects in workmanship and materials. Major systems such as plumbing, heating and electrical are covered for 24 months.

You’ll typically address these items when doing the walk-through with your builder to inspect the finished dwelling and make sure there are no visible deficiencies. This is done prior to occupancy.

You may want to consider hiring a licensed home inspector to visit the dwelling with you. Even though the home is new, there may be issues only a trained professional would notice.

Five Years: The 5-year warranty period refers to the building envelope, such as siding and windows – primarily covering issues that can be caused by water penetration.

Ten Years: The 10-year warranty period covers major structural items with the dwelling, such as the foundation of the home. Minor cracks will appear in foundations, but the 10-year warranty will only apply to structural issues with the foundation.

In some cases, manufacturers’ warranties may be longer than the mandatory coverage under the New Home Warranty Program. This can apply to items such as flooring, cabinetry, plumbing fixtures, windows and so on. Ask your builder or previous owner to provide copies of these warranties to you.

Keep in mind that just because your home is covered under the New Home Warranty Program, doesn’t mean you can neglect your home; you still need to perform regular maintenance. Some items are specifically excluded from the warranty, such as landscaping and septic tanks/fields. Make sure you know what is and isn’t covered under the program.

I always recommend contacting the Home Owners Protection office to make sure your home is covered by the New Home Warranty Program. You can contact their office by calling 1-800-407-7757.

For more home improvement information, go to www.AskShell.com