- A new home must be registered for warranty insurance covering at least 2 years for materials and labour, 5 years for the building envelope and 10 years for structural defects.
- Some items are excluded, and claim limits and notice rules apply.
- Owners cannot be required to pay a deductible or sign a release for covered repairs.
If you are buying a newly built home in British Columbia, you will often hear about 2-5-10 warranty coverage. It is mandatory insurance meant to protect buyers from certain construction defects.
This article explains what each tier covers, what is commonly excluded, and how a claim starts. Your actual policy and the warranty provider's terms control the details, so read them.
This article covers the law of British Columbia.
The basic rule
Under section 22 of the Homeowner Protection Act, a person may not build a new home unless it is registered for home warranty insurance. The coverage must be 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.
What each tier covers
The two-year materials and labour tier is staged under the Homeowner Protection Act Regulation. Warranty providers can offer broader coverage than these minimums, so check your policy.
| Coverage | What it covers |
|---|---|
| 12 months | Defects in materials and labour and code violations (15 months for strata common property). |
| 24 months | 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. |
| 5 years | Building envelope defects, 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. |
What is commonly excluded
Warranties may exclude some items. Permitted exclusions include landscaping, detached non-residential structures, commercial-use areas, roads, site grading, municipal services, septic systems, and water quality or quantity. Permitted 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.
Driveways, walkways, amenity facilities and parking structures in multi-unit buildings cannot be excluded.
Claim limits and how to claim
Where a provider sets a claim limit, the minimum is 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 it is the least of the total original purchase price, $100,000 times the number of units, or $2,500,000.
- Give written notice with reasonable detail to both the warranty provider and the builder.
- Do so 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.
No fixed number of days is set for notice beyond "a reasonable time", so do not wait. Delay can create arguments about whether you acted in time.
Special cases and what to do next
Owner builders building for personal use under an authorization need not obtain warranty insurance or a licence. They face restrictions on selling during construction or within a prescribed period unless the registrar permits. Where a new home is covered by warranty insurance, the statutory deemed protection in section 23 does not apply.
- Ask for the warranty certificate and the provider's policy before closing.
- Note the start dates for each coverage tier.
- Keep a written, dated record of defects with photos.
- Send notice to both the provider and the builder, in writing, as soon as you find a defect.
- Talk to a lawyer if a claim is denied or if you are buying from an owner builder.
Frequently asked questions
What does 2-5-10 mean?
It refers to at least 2 years for materials and labour, 5 years for the building envelope and 10 years for structural defects. The 2-year tier is staged, with 12 months and 24 months periods for different defects.
Does the warranty cover everything wrong with the home?
No. Landscaping, normal wear and deterioration, and owner-caused damage are among the permitted exclusions. Claim limits can also apply.
How do I make a 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.
Can the provider charge me a deductible?
For covered repairs, owners cannot be required to pay a deductible or sign a release.
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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