Builder’s Warranty What’s Covered and What’s Not in Alberta

When purchasing a new home in Edmonton, it is very important to understand your builder’s warranty what’s covered and what is not. This warranty provides homeowners with peace of mind, ensuring that their investment is protected against defects or issues that may arise after moving in. However, not all warranties are created equal, and understanding what is covered—and what isn’t—is essential for making informed decisions.

In this blog, we’ll dive deep into builder warranties, their coverage, exclusions, and why they are crucial for new homebuyers in Edmonton. We’ll also explore how Alberta’s New Home Buyer Protection Act plays a role in safeguarding your purchase.

What Is a Builder’s Warranty?

A builder’s warranty is a legal agreement between the builder and the homebuyer, outlining the coverage for defects or issues in the construction of a new home. It typically provides a timeline for addressing concerns related to structural integrity, materials, and workmanship.

In Alberta, new home warranties are governed by the New Home Buyer Protection Act, ensuring that builders adhere to strict standards and offer coverage that meets minimum requirements.

Key Components of a Builder’s Warranty

Builder warranties often include multiple layers of coverage. Let’s break them down:

1. One-Year Coverage

• What’s Covered: This period addresses defects in materials and workmanship. Examples include:
  • Paint issues
  • Flooring imperfections
  • Problems with doors, windows, and trim
• What’s Not Covered: Wear and tear, damage caused by the homeowner, or aesthetic concerns like minor scratches.

2. Two-Year Coverage

• What’s Covered: This phase covers mechanical distribution systems, including:
  • Plumbing
  • Electrical wiring
  • Heating and ventilation systems
• What’s Not Covered: Systems damaged by improper use or lack of maintenance.

3. Five-Year Coverage

• What’s Covered: Structural components such as:
  • Foundation
  • Frame
  • Roof
• What’s Not Covered: Issues arising from renovations or alterations made by the homeowner.

4. Ten-Year Coverage

• What’s Covered: Major structural defects that compromise the home’s safety or usability, such as:
  • Severe foundation cracks
  • Structural collapses
• What’s Not Covered: Natural disasters, acts of God, or improper maintenance.

What’s Typically Covered by Edmonton Builders?

Builders in Edmonton often exceed minimum requirements by offering additional coverage or warranties through third-party providers. Here’s a breakdown of common inclusions:

Materials and Workmanship

Defects in materials or workmanship are typically the most common claims. These issues might include:

• Uneven flooring
• Poorly installed tiles
• Cracks in drywall

Systems

The systems within your home are critical to its functionality. Builder warranties often ensure:

• Proper installation of HVAC systems
• Fully functioning plumbing and electrical systems

Structural Integrity

Structural components, such as the foundation and framing, are covered for a longer duration because of their importance to the overall stability of the home.

Living Expenses

Your warranty covers reasonable living expenses if your new home is uninhabitable due to a defect or rectification of a defect. Please see your policy for coverage details.

Warranty insurance coverage limits

• For a single-family home: the lesser of the original purchase price (excluding land) and $265,000.
• For a multi-family unit registered under a condominium plan: the lesser of the original purchase price and $130,000.
• For common warrantable property in a multi-family building or for the property for which a condominium corporation is responsible under its bylaws: $130,000 times the number of multi-family units in the building to a maximum of $3,300,000 per building.
• For a non-condominium multi-family unit (for example, a duplex unit or row townhome with no common warrantable property): the lesser of the purchase price and $265,000.

What’s Not Covered by a Builder’s Warranty?

While builder warranties provide significant protection, there are notable exclusions. It’s crucial for homeowners to understand these limitations to avoid unexpected expenses:

Normal Wear and Tear

Issues like fading paint, worn carpets, or minor cracks in the foundation due to natural settling are considered normal wear and tear.

Maintenance Issues

Homeowners are responsible for maintaining their property. For example:

• Blocked gutters
• Improper drainage
• Unkept landscaping

Renovations or Alterations

Any modifications made after construction, such as adding a deck or renovating a kitchen, are not covered.

Acts of God

Damage caused by natural disasters—floods, earthquakes, or hailstorms—is generally excluded. Homeowners may need additional insurance for these events.

The Role of the New Home Buyer Protection Act in Alberta

The New Home Buyer Protection Act (NHBPA) requires all new homes built in Alberta to come with warranty coverage. Enacted in 2014, this legislation ensures that builders meet minimum standards for warranties. Here’s what it means for Edmonton homebuyers:

1. Mandatory Registration: Builders must register every new home under the Act and provide proof of warranty coverage before construction begins.
2. Minimum Coverage Standards: All warranties must adhere to the 1-2-5-10 model discussed earlier.
3. Builder Accountability: Builders are held accountable for addressing defects and ensuring quality construction.
4. Transparency: Buyers can access warranty information through the Alberta Government’s public registry.

Why Understanding Warranty Terms Is Important

Many homeowners assume that the builder’s warranty covers everything. However, this misconception can lead to frustration when unexpected expenses arise. Here’s why it’s important to understand the fine print:

1. Avoid Surprises: Knowing what is excluded helps you prepare for additional costs.
2. Better Maintenance: Understanding coverage terms encourages proper maintenance to avoid warranty disputes.
3. Informed Decision-Making: Clear knowledge of your warranty helps you decide whether additional insurance or extended warranties are necessary.

How to Maximize Your Builder’s Warranty

To get the most out of your warranty, follow these tips:

1. Document Everything

• Keep detailed records of all communications with your builder.
• Save receipts, contracts, and warranty booklets for reference.

2. Perform Regular Maintenance

• Ensure that your home’s systems are well-maintained.
• Address small issues before they escalate.

3. Schedule Inspections

• Conduct inspections before your one-year coverage expires.
• Hire a professional to identify potential problems.

4. Submit Timely Claims

• File claims as soon as you notice an issue.
• Ensure that you meet deadlines outlined in your warranty.

Builder Warranties vs. Home Insurance

Many new homeowners confuse builder warranties with home insurance. While they both provide protection, they serve different purposes:

• Builder’s Warranty: Covers defects in construction, materials, and workmanship.
• Home Insurance: Covers damage from unforeseen events, such as fire, theft, or weather-related incidents.

Common Questions About Builder’s Warranties

1. Can I Transfer My Warranty to a New Owner?

Yes, all home warranty insurance products stay with the home, not the homeowner. 

2. What Happens if My Builder Goes Out of Business?

Most warranties are backed by third-party providers, ensuring coverage even if the builder ceases operations.

3. Can I Extend My Warranty?

Some builders or third-party providers offer extended warranties for an additional cost. Review the terms to determine if this is beneficial.

For example AB New Home Warranty offers optional additional building envelope coverage protecting you from defects in your home’s building envelope for two years over and above the mandatory five-year coverage, extending the coverage period to a maximum of seven years from the commencement date. Your homebuilder may opt for this coverage at the time of the project application.

Why Edmonton Homebuyers Should Prioritize Builder Warranties

In Edmonton’s growing housing market, understanding the builder’s warranty what’s covered  is essential for safeguarding your investment. From protecting against unforeseen defects to ensuring peace of mind, warranties are a critical aspect of buying a new home. By educating yourself on what’s covered and what’s not, you can navigate the home-buying process with confidence.

Final Thoughts

When buying a new home in Edmonton, the builder’s warranty is more than just a legal formality—it’s a promise of quality and protection. Understanding its coverage and limitations empowers you to maintain your home, avoid unnecessary costs, and make the most of your investment. Whether you’re a first-time buyer or a seasoned homeowner, being informed about your rights under the New Home Buyer Protection Act is the first step toward a hassle-free homeownership experience.

Have more questions about your Builder’s Warranty What’s Covered and What’s Not in Alberta? Contact Chris Reid Edmonton REALTOR®.

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