New Home Warranty in Manitoba: Is Coverage Mandatory?

If you are signing for a newly built house, you may assume a warranty comes automatically. In Manitoba, that assumption needs checking.

This article explains the legal position on mandatory warranties and how to review whatever warranty the builder offers, so you know what you are getting before closing. It also touches on a few other points that matter to people buying new.

This article covers the law of Manitoba.

Is a warranty required by law?

The New Home Warranty Act (S.M. 2013, c. 23) was never proclaimed, so it never came into force. Bill 37 of the 42nd Legislature, 2nd Session, provides in section 18 that the Act is repealed. As a result, a mandatory statutory warranty on new homes is not in force.

Whether the repeal has been completed is worth confirming with a lawyer if it matters to your purchase.

What this means for coverage

Without a mandatory statutory warranty, protection depends on what the builder agrees to give you. A builder may offer its own warranty or a third-party program, and the terms can differ a great deal. How long it lasts, what it covers and what it excludes all depend on the document itself.

Do not assume that a sales brochure or a verbal promise creates the same protection as a written warranty. If a promise matters to you, ask for it to be written into the purchase contract or the warranty document so there is no doubt later about what was agreed.

What to check in a builder's warranty

• Who gives the warranty: the builder, or an outside company.
• What is covered, such as workmanship, materials, the building envelope or major structural parts.
• How long each type of coverage lasts and when it starts.
• What is excluded, including normal wear, settling and damage you cause.
• Whether the warranty transfers if you sell the home.
• How to make a claim, who to notify and the deadline for notice.
• What happens if the builder goes out of business.

Take your time with this list. A warranty that sounds generous in a sales meeting may be narrow once you read the exclusions and notice deadlines.

Other points for buyers of new homes

A warranty is only one part of buying new. Costs and paperwork also deserve attention, and a few rules are worth knowing.

• Manitoba land transfer tax is generally payable by the buyer, with some exceptions, plus a registration fee.
• The tax is calculated on the fair market value of the realty on the date of registration of the transfer of title, not simply the contract price.
• It is due on registration of the transfer of title at the land titles office.
• Federal help for first-time buyers includes the Home Buyers' Plan, which has a withdrawal limit of $60,000.
• A person can make a Home Buyers' Plan withdrawal and a First Home Savings Account withdrawal for the same home, if all conditions are met at the time of each withdrawal.

If you are buying a new condominium unit before the declaration and plan are registered, the seller must give you a different package of documents than in a resale, including a declarant's disclosure statement (Form 1) and a proposed declaration. Which exceptions to land transfer tax or other programs apply to you depends on your situation, so it is worth confirming with a lawyer or accountant.

Before you sign and after you move in

• Ask the builder in writing what warranty is included.
• Ask for a full copy of the warranty, not just a summary.
• Have a lawyer review the purchase contract and warranty before you sign.
• Arrange a careful walk-through and record any deficiencies in writing before closing.

The claim process is set by the warranty itself, so follow its steps exactly. In general, notify the warranty provider in writing as soon as you find a defect, keep copies of everything, and take dated photographs. If the builder or provider will not respond, a lawyer can explain what other options your contract or general law may give you.

Frequently asked questions