The Government of Manitoba has announced a plan for a mandatory warranty to protect new home buyers.
Under The New Home Warranty Act, which is now before the legislature, all new home builders will be required to register with a government office. A building permit for a new home may not be issued unless the builder is registered and the home is covered by a new home warranty.
The new home warranty must be provided by a registered warranty provider which must either be an insurance company or have an insurance company undertake to assume its warranty obligations.
The minimum period for a warranty is:
- any defects in labour, materials and design in houses and condominium units for 15 months;
- any defects in labour, materials and design in condominium common elements for one year.
- defects in the plumbing, heating and electrical systems for two years;
- building code violations that constitute an unreasonable health or safety risk or are likely to result in material damage to the home for two years;
- defects that render the home unfit to live in for two years;
- defects in the building envelope, including water penetration for two years; and
- structural defects for seven years.
If there is a change of ownership of the home during the warranty period, the warranty rights will be transferred to the new owner.
The minimum amount of coverage under a warranty is $100,000 for each dwelling unit and for common elements of a condominium the lesser of $100,000 for each unit in the building and $2,500,000.
The provisions of the Act apply despite any agreement to the contrary and any waiver or release of rights under the Act has no effect.
An individual who wishes to build a home for his or her own use may apply for an exemption from the warranty requirements as an owner-builder. However, an owner-builder may not sell a new home until the period that the warranty would have been in effect has expired. This would be seven years from the date of completion. However, the registrar appointed under the Act may grant permission to sell a new home before the expiry to the warranty period if the owner or some third party would suffer undue hardship.
The legislation is still in first reading state and may be changes before it is enacted. Once the legislation is in force regulations with provide further details or the required warranty and may exempt certain classes of builders or buildings from the Act.
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