protection for new home buyers

Province to strengthen protection for new home buyers

by: Government of Alberta | Jun 7th, 2011

The Alberta government is proposing changes to improve the standard of building in Alberta to better protect new home buyers and hold builders more accountable.
“The vast majority of homes in Alberta are built well and stand the test of time. But we want to ensure that we have all the tools in place to address those instances where issues do arise”, said Hector Goudreau, Minister of Municipal Affairs. “This full-suite approach will involve all partners from municipalities and their inspectors to builders and safety codes officers to consumers and warranty providers.”

The province will consult with key stakeholders on developing a regulatory framework for mandatory new home warranty programs. There are currently five new home warranty programs available in Alberta. The regulatory framework would enhance what is available to consumers and set minimum provisions and standards.

“Consumers need to know they will be protected when making what can be the biggest purchase of their lives,” said Heather Klimchuk, Minister of Service Alberta. “These changes supplement the work we have already done to regulate home inspectors and is another piece in providing consumers peace of mind.”

The Alberta government is proposing an increase be considered for the limitations period, increasing the length of time that charges may be laid for building code offences to up to three years after homeowners take possession. It is also proposed the maximum fine be increased to $100,000 for a first offence and up to $500,000 for subsequent offences.
Other activities in progress to help improve the standard of building in Alberta include Municipal Affairs’ review of the Safety Codes Act. As well, the Safety Codes Council is conducting a broad review of Alberta’s inspection system and will provide building envelope training to all building Safety Codes Officers in the province within the next 12 months.

“We’ve always said we didn’t want a band-aid solution,” added Goudreau. “Our comprehensive approach strikes the balance between consumer protection and industry responsibility without significantly adding to the price of a home or negatively impacting builders who comply with Alberta’s codes.”
The Alberta government is working to build a better Alberta by fostering economic growth, strengthening our health and education systems, investing in infrastructure, supporting safe and strong communities and ensuring a clean and healthy environment.
Editor’s note: Minister Goudreau will be available to answer media questions outside his office (#104 Legislature building) at 2 p.m. today

Province moves to mandatory home warranties, hikes violation fines

By Darcy Henton, Calgary Herald June 7, 2011 Comments (6)](javascript:jumpToAnchor(’#Comments’))


In a long-awaited move to bolster the residential construction industry, the Stelmach government has announced a plan to require all home builders to provide warranties and has dramatically hiked maximum fines for building code violations.

****Photograph by: Archive, Calgary Herald

EDMONTON — In a long-awaited move to bolster new homebuyer protection, the Stelmach government has announced plans to make new home warranties mandatory, extend warranty coverage and dramatically hike maximum fines for building code violations.
Municipal Affairs Minister Hector Goudreau also announced “a broad review” of the home inspection system, additional training for safety code officers, and a longer statute of limitations for charging builders with building code violations.
The moves, recommended in a government report three years ago in response to complaints of leaking and rotting residences, are expected to take effect next year.
The Herald reported last month Goudreau planned to make new home warranty programs mandatory in the aftermath of a forced evacuation of a recently constructed Fort McMurray condominium complex that was deemed structurally unsafe.
“Eighty per cent of homes are covered by warranty programs of one type or another and our intent is to make 100 per cent covered by warranty programs,” Goudreau said Tuesday.
“We’re getting some very strong positive signals from the construction industry that it is very manageable in the province of Alberta, so we’re very strongly headed in that direction.”
Alberta will join British Columbia, Ontario and Nova Scotia in making new home warranties mandatory, Goudreau said.
The move was applauded by the Calgary Region Canadian Home Builders Association, but a Calgary professor of architecture said the changes won’t resolve the issue of industry accountability.
Home Builders Association president David Hooge of Stepper Homes said the vast majority of builders already build to standards above code and offer new home warranties, but this will bring all builders to a level playing field.
“It will encourage better building,” he said. “That’s what we all want. I think it’s positive.”
But Tang Lee, a University of Calgary professor in the faculty of environmental design, said the measures won’t be a silver bullet to ensure homebuyers are protected from shoddy builders.
“It’s a step in the right direction,” he said.
Lee said warranty programs offered by builders and insurance companies tend to favour builders over buyers, so making them mandatory won’t dramatically improve the plight of homebuyers.
The programs require buyers to go to binding arbitration, which negates their ability to sue if they aren’t ultimately satisfied, he added.
“It really doesn’t protect homeowners,” Lee said. “Having it government-run would be better.”
Warranties will now include five years of coverage for building envelope issues that usually involve moisture appearing in poorly constructed homes and condos.
The five-year coverage for structural problems will be doubled.
But Lee said extending warranty coverage may not be sufficient because often moisture-related problems don’t surface for a decade.
“In most of the cases I have been involved in, it has been 10 to 15 years down the line before the defects really showed up,” he said. “Water gets in the wall and won’t show up until it rots the wood.”
Goudreau defended the delay in making the changes, saying the province “didn’t want a Band-Aid solution.”
Under the proposed changes, which still must be passed by the legislature next year, the maximum penalty for building code violations will jump from $15,000 to $100,000 for a first offence and from $30,000 to $500,000 for subsequent violations. Builders can be charged for safety code violations up to three years after buyers take possession of their homes.
The government has also directed the Alberta Safety Codes Council to provide additional building envelope training to all safety codes officers in the province within a year.
Nick Trovato, the managing principal of engineering firm Read Jones Christoffersen which does a lot of work fixing problem condos, called the announced changes “a start.”

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The first comment on the story sounds like it may be from Vern. M.:

*“Is this great or what? Only took 40 years for PC AB Governemnt to care about Albertans? Must be an election year.”

I did not know this announcement was made until I read it here so Mr Macneish your comment about what I said is completely out of line.

As for increasing the fines that is just good public relations or spin as Macneish likes to say.
One of these home warranty plans is 270 pages of excuses to let the builder off the hook. Some of the excuses do not even meet the ABC.
The real problem with HWPs is the requirement that the buyer has to submit all disputes to compulsory arbitration. For those that do not know what this means is “It prohibits the buyer from taking the dispute to court.”

Also the HWP does not allow defects to be added after the COP (Certificate of Possession). However they will enforce the correction of all items listed before COP.
Thus If you are buying a new house under the HWP make sure you get a through inspection by an experience HI that is willing to list everything that is not perfect.
HWP = Home Warranty Plan