Your new home is an investment: Protect it!

A New Home Warranty normally covers the amount of the deposit placed on the home in the event of a default by the builder, delayed closings/occupancy and offers an annually decreasing amount of coverage on everything from cosmetic defects for one to ten years from the time the home is occupied and the Certificate of Completion. Other typical coverage details include:

Year 1: All materials and workmanship are covered, including water penetration; all major systems (i.e. roof, plumbing, electrical, and heating systems), and major structural defects.

Year 2: Major structural defects. Some warranties also cover water penetration (through windows, foundation, roof, siding, etc), exterior siding damage, and/or defects associated with the home’s major systems until this point.

Year 5: Major structural defects. Some warranties also cover water penetration through the foundation.

Years 5-10: Major structural defects. Not all homes are covered for 10 years. Some warranties only cover the home for 5 years, while others cover the home for 7 years. The purchase of an extended warranty is usually required to extend the warranty term to 10 years.

Things that are not covered under most warranties include damage caused by homeowner or movers, work performed by the homeowner, or damage caused because of negligible maintenance by the homeowner (i.e. water leakage caused by poor grading).

Prior to the one year anniversary of moving into the home, it should be inspected by a professional home inspector and a list of the deficiencies found in the inspection report should be submitted to the builder in writing. It is important to give the builder the opportunity to correct any problems, prior to contacting the warranty company.

Each of the warranty programs available throughout Canada has its own specific terms and conditions. The rights and responsibilities of the homeowner for each warranty are usually documented in an easy to understand homeowner information package. New home buyers should contact their local home builders association to obtain specific information related to local new home warranty coverage.