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Province to legislate better new-home warranties

EDMONTON – After more than a decade of complaints from Albertans who purchased shoddy, leaky homes, the government is poised to introduce a new law that beefs up warranties, makes them mandatory for all new homes, and dramatically increases fines for negligent builders.

Municipal Affairs Minister Doug Griffiths is expected to table the new legislation at the fall sitting of the legislature, slated to begin Oct. 23.

“Ultimately, it is there to make sure you have a warranty to cover you if you have problems in your house, but the long-range plan for doing all this is to make sure we don’t have problems in our houses in the first place,” Griffiths said Monday.

“Everywhere else, it has improved the quality of construction, and that’s the goal we are going for. So hopefully, you don’t need the warranty.”

Under the proposed new rules, Alberta new homebuyers will automatically get five years of protection from water damage, two years of protection for major systems like plumbing and electrical, and a 10-year structural warranty.

Currently, there is no mandatory protection for damage caused by water penetration or for major systems that fail.

The new rules will also mean the maximum fine for a first-time building code offence would jump to $100,000 from $15,000. The fine for a second offence would rise to $500,000 from $30,000. The statute of limitations on building code offences will increase to three years from six months — a recognition, Griffiths says, that problems often don’t become apparent until long after the owner moves in.

He added that concerns about increasing costs of homebuilding are unfounded, as the government will work to increase competition in the home warranty field.

“The way we’ve designed the system, I think we’ve made sure it won’t price people out of a new home, which is just as important as making sure they have the warranty to back up the quality of the home,” Griffiths said.

Jim Rivait of the Canadian Home Builders’ Association said the proposed changes will take Alberta a long way toward improving the quality of construction in the province.

He said mandatory five-year warranties on water penetration will prompt warranty companies to conduct thorough on-site inspections to reduce their liabilities, and those inspections will reinforce the work done by inspectors working for municipalities.

“Our members are very supportive,” Rivait said, noting that members of the CHBA have long offered warranties as a condition of membership in the association.

NDP MLA Dave Eggen has been publicly advocating for residents of the Palisades, a seven-year-old condominium in his Edmonton riding that is undergoing $6 million in repairs due to water damage.

“It’s certainly long overdue,” Eggen said of the new legislation. “Unfortunately many hundreds of condo owners in Alberta have been left holding the bag with structural deficiencies.

“We’ll be watching very carefully for loopholes that allow unscrupulous builders to take advantage of buyers, and we will be pushing for improved inspections as well.”

Read more: http://www.edmontonjournal.com/Province+legislate+better+home+warranties/7292685/story.html#ixzz27XfiVppa

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