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Part of New home warranty

New home warranty – Overview

Find out what homes must be covered by new home warranty and the minimum protection required.

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New home warranty

Home warranty protection

A new home warranty is attached to the home, not the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.

The warranty coverage begins when the first of the following occurs:

  • the new home is occupied
  • the permitting authority grants permission to occupy
  • the title of the new home is transferred to the owner

  • Minimum coverage

    The New Home Buyer Protection Act requires minimum warranty coverage on all new homes constructed in Alberta.

    One year for labour and materials

    Covers any defects in materials and labour related to how the home was constructed and materials used. This may include things such as flooring, staircases, baseboards, cabinets, railings and other trim and fixtures.

    Two years for delivery and distribution systems

    Covers defects related to the electrical, plumbing, heating, ventilation and air conditioning delivery systems.

    Five years for building envelope protection

    The building envelope is the shell of the home, including the roof and walls. It is the separation between the interior and exterior environments of a building, which protects the indoor environment and facilitates climate control.

    The act requires a minimum 5 years of coverage, with the requirement that warranty providers offer builders the option of purchasing an additional 2 years of building envelope coverage.

    10 years for major structural components

    Major structural consists of the frame, including the roof’s structural integrity, and the foundation.

  • Construction Performance Guide

    The Construction Performance Guide for New Home Warranty in Alberta provides the basic requirements of warranty coverage and recommended minimum performance expectations for new homes in the province.

    The exclusion of an issue from the guide does not mean that it is not a defect or that a warranty provider is not responsible for addressing the issue.

  • Coverage limits

    The new home warranty coverage limit and/or rebuild amount, as established in the Home Warranty Insurance Regulation, is set at a minimum of $265,000 for a single family home and $130,000 for a unit in a condominium or other multi-family complex. Homeowners can choose to buy additional coverage if they wish.

    The coverage limits are based on the average cost of rebuilding a home. This includes the structure but does not include other costs such as land, contents or landscaping.

    There is also up to $3.3 million in coverage for common property of each building of a multi-family project (such as, elevators, lobbies, stairwells and building envelope).

  • Warranty claims

    When construction defects are found in a new home, homeowners can file a claim with their warranty provider. Warranty providers are responsible for working with builders to correct the defects. Learn more about Warranty claims.

Warranty providers

Seven warranty providers currently operate in Alberta:

Information for municipalities

Municipalities, or their permit issuers, are responsible for confirming:

  • the new home will be constructed by a residential builder who holds a valid and active builder licence
  • the new home has warranty coverage
  • if the home is not going to be constructed by a licensed builder, that a valid Owner Builder Authorization for the new home has been issued by the Registrar
  • if the New Home Buyer Protection Act does not apply to the new home, that an exemption has been obtained from the Registrar indicating that the new home is exempt from the requirements of the Act

Every home built in Alberta since February 1, 2014, requires warranty coverage. This means all building permits for new home construction applied for after February 1, 2014, need to meet the requirements of the New Home Buyer Protection Act.

All residential builders constructing new homes in Alberta since December 1, 2017, require a valid builder licence. Permit issuers are required to check that a residential builder has an active licence.

Confirm licence status using the:

Owner builders with a valid owner builder authorization do not need a builder licence or warranty coverage for the new home identified in the authorization.

Owner built homes will appear in the Property Registry, but owner builders will not appear in the Builder Registry.

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.

Only new building permits issued after December 1, 2017 require the home to be constructed by a licensed builder.

Information for real estate professionals

The New Home Buyer Protection Act prohibits someone from selling or offering to sell a new home without warranty coverage if the building permits were issued on or after February 1, 2014.

A new home cannot be sold or listed for sale until it has warranty coverage and is registered in the New Home Buyer Protection System.

Before you list

If a home was built on or after February 1, 2014, a professional real estate agent must confirm that it has home warranty before listing it for sale.

If a real estate professional engages in sales activity on a home without home warranty coverage, the Residential Protection Program can issue a Compliance Order requiring the real estate professional to:

  • remove the listing from the Internet
  • remove "For Sale" signs from the home
  • cease any sales activities

Non-compliance with such an order would be an offence under the act and may result in prosecution or administrative penalties or both.

You can search the Property Registry to find warranty information on homes and builders.

Contact

Connect with the Residential Protection Program:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-644-1010 (within Canada and United States)
Toll free: 1-866-421-6929 (within Canada)
Email: [email protected]

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