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November 19, 2012

Alberta legislation improves warranties for new homes and condos

EDMONTON

New legislation will offer new home buyers in Alberta more protection and the province says it’s designed to be the strongest warranty of its kind in Canada.

Bill 5, the New Home Buyer Protection Act, requires builders to provide home warranty coverage for all new homes built in the province starting fall 2013.

Municipal Affairs Minister Doug Griffiths says if things go wrong, the legislation gives stronger protection to get those homes repaired.

Griffiths admits homebuyers needed increased protection because of shoddy construction.

He points to the problems facing owners of the Penhorhood Condos in Fort McMurray, who found themselves homeless after engineers found evidence of serious deterioration in the complexes.

Current warranties offer one year on materials and labour and five years on major structural components.

Under the proposed legislation, all new homes, both detached homes and condominiums, would offer one year on materials and labour, but two years for anything related to delivery and distribution systems.

There would also be five years of building envelope protection, with a requirement for the warranty provider to offer the consumer the option to purchase additional years of coverage.

Finally, the warranty for major structural components would be 10 years.

“This is the strongest warranty protection in all of Canada,” Griffiths said.

It’s expected the new home warranty would cost about $1,700 to $2,000 for an average home, or less than one per cent of the cost of the average house.

Owner-builders will be exempt from the requirements to carry a new home warranty unless the property is sold within the warranty period. If the home is sold within the warranty period, the owner-builder must provide the buyer with warranty coverage for the remaining portion of the warranty period.

The minister says the goal is to raise the quality of construction of homes as well.

“This is to deal with the few people who won’t or don’t (do a good job),” he said.

News from © Canadian Press Enterprises Inc., 2012

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