On February 1, 2014, the New Home Buyer Protection Act,
SA 2012, c. N-3.2. (the "Act"), came into force.
Pursuant to the Act, every new home built in Alberta is
now required to be covered under a new home warranty insurance
contract (the "Warranty"); the province has stated that
new homebuilders will not be issued a building permit prior to
purchasing a Warranty.
What is a Warranty?
A Warranty is an assurance from the homebuilder that the new
home is reliable and free from all known defects. Upon the
discovery of a defect, within a specific period of time and under
certain conditions, the homebuilder will, without charge, repair or
replace the defect.
Defect is defined in the New Home Buyer Protection (General)
Regulation, Alta Reg. 211/2013 as any design, construction or
material used in the construction of a new home that is: (1)
contrary to the building code; (2) requires repair or replacement
due to the negligence of the home builder; (3) constitutes an
unreasonable health or safety risk; or (4) has resulted in material
damage to the new home.
The Warranty Terms
The standard new Warranty terms under the Act are as
One year: defects in labour and materials;
Two years: defects in labour and materials relating to the
delivery and distribution of certain systems including gas,
plumbing and electrical systems;
Five years: defects in the building envelope, such as
protection against water damage; and
Ten years: defects in the structure including the frame and
Coverage under the Warranty will commence on the earlier of
either of the following two dates: (1) transfer of title to the new
home is registered; or (2) an accredited
agency/municipality/regional services commission grants the
homeowner permission to occupy the new home (the "Warranty
Applicable Building Structures
The Act applies to all new buildings including houses,
condominiums, recreational properties and modular and manufactured
homes; however, exceptions have been granted for purpose-build
rentals, social housing, habitat for humanity, care facilities,
detached garages, hotels and motels.
Individuals who intend to build a new home for their own
personal use (the "Owner-Builder") are not required to
obtain a home warranty if an exemption is granted by the Registrar.
The Registrar shall issue an exemption if the Owner-Builder meets
the following requirements:
Registers the new home with the Registrar;
Meets the required criteria:
a.intends to personally reside in the new home for at least 10
b.is the registered owner;
c.intends to personally engage in, arrange for or manage all or
substantially all of the construction of the new home;
d.does not make any false or misleading statements in previous
e.does not contravene the Act;
f.has not been issued an authorization for at least three years
following the date of first occupancy of the new home; and
g.has not been ordinarily resident in a new home for which
another individual was issued an authorization in the previous
Pays required fees, if any.
If the Owner-Builder decides to sell the new home either while
the new home is being constructed or within the ten year period
following the Warranty Commencement Date (the "Warranty
Period"), the Owner-Builder is required to: (1) ensure that
the new home has Warranty coverage for the balance of the Warranty
Period and (2) disclose to the prospective owner of the new home
the Warranty coverage.
Pursuant to the Act, homebuilders are required to
register each of their properties online with the New Home Buyer
Protection Office's registry (the "Registry"), found
at www.homewarranty.alberta.ca. The Registry
shall increase transparency in the home buying process by providing
prospective owners with information on their future home such as
critical Warranty dates and details on homebuilders who have been
subject to administrative penalties or compliance orders under the
Contravention of the Act by any person or company can
result in a maximum fine of $100,000 for the first offence and
$500,000 for subsequent offences. A government appointed registrar
and compliance officers shall oversee the administration and
enforcement of the Act.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Alberta is going through a difficult economic period. These times can be challenging and while owners struggle to get their business through the rough patch, they want to preserve the assets and capital they have built up.
Legal issues surrounding contaminated sites affects landowners, developers, realtors, as well as consultants and contractors working on the front lines. This webinar will provide a practical review of how the legislation is actually being used, recent court decisions, challenges with brownfield developments, and future changes.
Who Should Attend: This webinar will be of interest to developers, contractors, environmental and real estate consultants, realtors, owners or lessors of land which may be impacted, and municipalities.
Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).