- A person may not build a new home in British Columbia unless it is registered for warranty insurance of at least 2 years for materials and labour, 5 years for the building envelope and 10 years for structural defects.
- The 2-year part is staged, with 12 months for some defects and 24 months for others.
- To claim, you give written notice to both the warranty provider and the builder within a reasonable time after finding the defect and before coverage expires.
If you are buying a new home or condo in British Columbia, you will hear about the 2-5-10 warranty. It is mandatory insurance on new homes, and it sets minimum periods during which certain defects must be covered.
This article explains what each part covers, what can be excluded, and how a claim starts. Your warranty certificate may be broader than the legal minimums, so always read the actual policy.
This article covers the law of British Columbia.
The three parts of 2-5-10
Under section 22 of the Homeowner Protection Act, a person may not build a new home unless it is registered for home warranty insurance covering at least 2 years for materials and labour, at least 5 years for the building envelope (including water penetration), and at least 10 years for structural defects.
| Period | What it covers |
|---|---|
| 2 years | Materials and labour, staged as described below. |
| 5 years | Defects in the building envelope, including water penetration that causes or is likely to cause material damage. |
| 10 years | A defect in materials and labour that results in failure of a load-bearing part, or structural damage that materially and adversely affects residential use. |
How the 2-year coverage is staged
The 2-year materials and labour coverage is not a flat two years for everything. Under the Homeowner Protection Act Regulation, it works in stages:
- 12 months for defects in materials and labour and code violations, or 15 months for strata common property
- 24 months for electrical, plumbing and HVAC distribution systems, exterior cladding, caulking, windows and doors that could cause detachment or material damage, and defects making the home unfit to live in
Because of these stages, a problem you notice in month 14 may be treated differently from one you notice in month 8. Keep dated records of anything you find.
What can be excluded
A warranty does not cover everything. Permitted exclusions include landscaping, detached non-residential structures, commercial-use areas, roads, site grading, municipal services, septic systems, and water quality or quantity. Defect exclusions include normal wear and deterioration, normal shrinkage, owner-supplied materials, owner or third-party damage, failure to mitigate, acts of nature, post-occupancy alterations, and diminution in value.
There is an exception for multi-unit buildings. Driveways, walkways, amenity facilities and parking structures in multi-unit buildings cannot be excluded.
Claim limits and how to claim
Where a warranty provider sets a claim limit, the minimum limits are the lesser of the purchase price or $200,000 for a fee simple dwelling, and the lesser of the purchase price or $100,000 for a strata or multi-unit dwelling unit. For common property, the limit is the least of the total original purchase price, $100,000 times the number of units, or $2,500,000. Providers' policies can be broader than these minimums.
To claim, you give written notice with reasonable detail to both the warranty provider and the builder within a reasonable time after discovering the defect and before coverage expires. Owners cannot be required to pay a deductible or sign a release for covered repairs.
Exceptions: owner builders and other cases
Owner builders building for personal use under an authorization need not obtain warranty insurance or a licence, and the section 22(1) requirement does not apply to them. Owner builders also face restrictions on selling during construction or within a prescribed period unless the registrar permits. If you are buying from an owner builder, ask what protection, if any, comes with the home.
Where a new home is covered by warranty insurance, the statutory deemed protection in section 23 does not apply.
What to do next
- Ask for the warranty certificate and policy before you complete, and confirm the home is registered.
- Note the possession date and diary 12-month, 15-month and 24-month marks for the staged coverage.
- Photograph and date any defect, and keep repair requests and replies.
- Send written notice with reasonable detail to both the warranty provider and the builder.
- Do not pay a deductible or sign a release for a covered repair without getting advice.
- Ask a lawyer to review the policy if the claim is large or the provider refuses it.
Frequently asked questions
What does 2-5-10 mean?
It refers to at least 2 years of coverage for materials and labour, 5 years for the building envelope including water penetration, and 10 years for structural defects. The 2-year part is staged, with some items covered for 12 months and others for 24 months.
Does the warranty cover landscaping or a septic system?
Not necessarily. Landscaping and septic systems are among the exclusions a warranty is permitted to have. Driveways, walkways, amenity facilities and parking structures in multi-unit buildings cannot be excluded.
How do I make a warranty claim?
Give written notice with reasonable detail to both the warranty provider and the builder, within a reasonable time after discovering the defect and before coverage expires. You cannot be required to pay a deductible or sign a release for covered repairs.
Do all new homes have this warranty?
Generally a new home must be registered for it. An exception is owner builders building for personal use under an authorization, who need not obtain warranty insurance.
Sources
- Homeowner Protection Act (BC Laws) — bclaws.gov.bc.ca
- Homeowner Protection Act Regulation (BC Laws) — bclaws.gov.bc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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