Whenever consumers buy a product, they expect a warranty to protect them from any manufacturer defects. What you may be surprised to learn is that it’s no different when you buy a pre-construction home. A new home warranty is typically included, but what coverage you get and who provides it varies depending on where you live.
What your warranty covers will depend on the provider. Generally speaking, you’ll be covered for things such as:
The length of your warranty will depend on what needs to be repaired and who your provider is. For example, in Ontario, Tarion is the provider and its warranty covers major structural damages for seven years but building code violations for only two years. There are also maximum coverage limits for freehold homes, condominium units and common elements.
In most cases, the warranty starts when you take possession of your home. However, the warranty for common elements in a condo begins when the condominium corporation is registered.
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A new home warranty is mandatory in Quebec, Ontario, Alberta, and British Columbia. Throughout the rest of the country, warranties are left up to the individual builders. That said, if the builder is part of a professional association, they may be required to offer a warranty.
The warranty should be clearly outlined in your purchase agreement. If you’re not sure, ask your realtor or the sales representative to go over things with you. What warranty you fall under would depend on where you live.
Residents of Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island who purchase a new home are covered by the Atlantic Home Warranty. This is an optional third-party warranty provider, but many of the top home builders in the region offer it.
The Guarantee Plan for New Residential Buildings is available to residents of Quebec who are purchasing new homes. Homes covered include detached, semi-detached, prefabricated and more. You’re entitled to up to $300,000 in total coverage if you need to make a claim.
The Tarion Warranty Corporation provides insurance for freehold homes and condominiums in Ontario. Freehold homes are covered up to $300,000. Condominium common elements warranty is currently valued at $100,000 times the number of units, up to $3,500,000.
Saskatchewan and Manitoba have optional new build warranties provided by the Saskatchewan New Home Warranty Program and New Home Warranty Program of Manitoba. Over in Alberta, the Alberta New Home Warranty Program is mandatory.
The British Columbia Homeowner Protection Act and regulations require residential builders to provide third-party home warranty insurance. Minimum coverage would include:
Hopefully, you never need to make a warranty claim, but if you do, here’s what to expect:
The claim process may differ slightly for each warranty provider. You can find detailed instructions on how to make a claim on their websites.
Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel. You can reach him on Twitter: @barrychoi.