What Does Alberta New Home Warranty Cover and Exclude?

You have found a leak, a crack in the foundation or a floor that sags, and your home is fairly new. The natural question is whether the builder's warranty will pay for the repair, or whether you are on your own.

Alberta requires warranty coverage on most new homes, but the answer depends on what failed, how old the home is and what your warranty contract says. This article explains how the coverage is organized so you can work out where your problem is likely to fit.

This article covers the law of Alberta.

Which homes have the warranty

The New Home Buyer Protection Act requires builders to provide home warranty coverage on all new residential homes, including condominiums, manufactured homes and recreational properties. It applies to homes where the building permit was applied for on or after February 1, 2014.

There are exceptions. Renovators generally do not need a builder licence or warranty unless the renovation makes up 75% or more of the home as new construction, and a relocated home that is 75% or more new construction is treated as a new home. The Act also does not cover dormitories, care facilities, work camps or hotels, and does not apply to homes on federal lands such as First Nations reserves and National Parks. An owner builder with a valid Owner Builder Authorization needs no warranty for the home named in it.

What each warranty period covers

The Act sets minimum periods that depend on the type of defect. The table below shows how the categories are described.

These categories are described in the government's warranty guidance. Warranty providers must also offer builders the option to buy an extra 2 years of building envelope coverage.

Where a leak, a crack or a sagging floor might fit

• A leak through the roof or walls may fall under the building envelope category, which has a 5-year minimum.
• A cracked foundation may fall under major structural components, which has a 10-year minimum.
• A floor problem could be a surface or workmanship issue, which sits in the 1-year category, or it could involve the frame, which sits in the 10-year category. The cause matters, so the provider's assessment is important.

These are general pointers, not a prediction. Whether a particular problem is a warrantable defect is decided through the claim process, and a building inspector or lawyer can help you understand the cause.

When the clock starts, and what is excluded

Coverage starts at the earliest of the home being occupied, the permitting authority granting permission to occupy, or title transferring to the owner. For condominiums, coverage for units and for common property starts on the earlier of first occupancy or transfer of legal title, with separate policies for each, and the start dates may differ. Coverage attaches to the home, not the owner, so it stays in effect on resale until it expires.

Rebuild coverage has minimum limits of $265,000 for a single-family home and $130,000 for a condominium or other multi-family unit, based on rebuilding the structure only and excluding land, contents and landscaping. Common property in a multi-family project has up to $3.3 million in coverage per building.

Exclusions are set by the Home Warranty Insurance Regulation and the warranty contract. The Construction Performance Guide sets basic coverage requirements and recommended minimum performance expectations, but it is not a comprehensive list, and an issue missing from it does not mean it is not a defect or that the provider is not responsible. Because the exact exclusions and any notice requirements depend on your contract, read it closely and have a lawyer confirm how it applies.

What to do next

• Find your coverage start date and confirm the issue is still within the relevant period.
• Look up your home in the Property Registry, which shows the warranty provider and contact details, the builder, and when coverage started.
• Contact the warranty provider, which explains its requirements, assesses the claim and works with the builder to resolve warrantable defects.
• Take dated photos, keep your contract and warranty documents, and write down when you first noticed the problem.
• If the provider refuses a claim, ask a lawyer about your options. Claim disputes are addressed by Guideline 05-2022, and the Residential Protection Program can be reached at 780-644-1010 or 1-866-421-6929.

Frequently asked questions