Progressive Home Warranty
Buying or building a new home represents a significant financial investment. Consumers should be able to make that investment with confidence that their home will be free of unforeseen expenses to repair defects once they have moved in.
The province of Saskatchewan does not have any mandated warranty coverage, so Progressive Home Warranty refers to the Alberta legislation and documentation for advice and instruction on warranty claims within Saskatchewan. That is why this page will continually refer to Alberta.
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In order to better protect new homeowners, the New Home Buyer Protection Act requires that all new homes, other than those that are specifically exempt, must be covered by new home warranty insurance meeting the following minimum terms:
1) defects in materials and labour for at least 1 year after the commencement date of the home warranty insurance policy,
2) defects in materials and labour related to delivery and distribution systems for at least 2 years after the commencement date of the home warranty insurance policy,
3) defects in the building envelope1, including those resulting in water penetration, for at least 5 years after the commencement date of the home warranty insurance policy, and
4) structural defects for at least 10 years after the commencement date of the home warranty insurance policy.
If ownership of the home changes within the period covered by the new home warranty insurance, the balance of the remaining coverage transfers to the new owner. All applicable remaining benefits that have not expired or been reduced from a previous claim are automatically transferred on change of ownership. Owners who sell their new home should provide the policy documents and the maintenance manual (if one has been provided) to the new owners. Notice to the warranty provider is not required.
Homeowners should carefully read their home warranty insurance policy to become familiar with the terms and conditions of their insurance, including commencement dates, exclusions, owner maintenance obligations, standard of coverage, financial limits of the policy, and materials, design, and labour supplied by the owner. These items are also addressed in the New Home Buyer Protection Act and its supporting regulations, including the Home Warranty Insurance Regulation of the Insurance Act.
Generally, home warranty insurance covers only defects, which are defined by the New Home Buyer Protection General Regulation as follows:
‘defect’ means any design, construction or material used in the construction of a new home that is discovered after the commencement of coverage under a home warranty insurance contract and
(i) is contrary to the building code,
(ii) requires repair or replacement due to the negligence of an owner builder or a residential builder or person for whom the owner builder or residential builder is by law responsible,
(iii) constitutes an unreasonable health or safety risk, or
(iv) has resulted in material damage to the new home.
Home warranty insurance does not deal with contract-related issues such as substitution of materials or colours or failure to deliver on some aspect of the contractual agreement between builder and home buyer. Issues such as delayed occupancy, financial issues, including deposit refunds and cost overruns, or incomplete work are also considered to be contract-related issues. It is generally considered the homeowner’s responsibility to address these issues directly with the builder. Your builder may offer deposit insurance; however, this is separate from your home warranty insurance.
Site grading and surface drainage beyond what is prescribed by the Alberta Building Code may be excluded from coverage; landscaping, municipal services, and non-residential detached structures such as garages, garden sheds or other outbuildings (certain exceptions apply to condominium common property) may also be excluded.
Weathering, normal wear and tear, and normal shrinkage of materials are excluded, as are damages caused by acts of nature, animals or insects, and fire.
Damages caused by abuse, owner negligence, or improper maintenance and damages resulting from work performed by the owner or under the owner’s direction after occupancy are not covered under warranty.
Prior to commencement of warranty, often before closing or settlement, the builder and homeowner will perform a walk-through to inspect the property together. During the inspection, the homeowner and builder should verify that all terms of the contract have been met, the home is completed, and major items are in working order. Often, builders will take this opportunity to provide the homeowner with a new home orientation to explain operation of the home’s systems and provide manuals and maintenance documentation.
During the inspection, the homeowner and builder should thoroughly examine the entire interior and exterior of the home. Any damaged, incomplete, or missing items, as well as anything that is not operating properly, should be noted and recorded on the inspection form. The rectification of deficiencies noted during the walk-through inspection is a contractual matter between the builder and homeowner and may be excluded from warranty coverage.
Warranty providers will usually have a form for recording the results of the walk-through inspection but may use varied terminology to describe it, such as pre-delivery inspection, completion certificate, or certificate of possession. It’s important to note that warranty providers will generally rely on information recorded (or not) and agreed to on the inspection form to determine whether or not they will cover items like, but not limited to, physical damage to materials (such as finished flooring, countertops, or plumbing fixtures), incomplete work, and accepted work. Where such damage occurs after occupancy, the damage may not be covered as a defect.
The process of purchasing a home is separate from the application of home warranty Insurance. While builders may undertake to repair, replace or otherwise deal with a number of issues at the inspection and record that on an inspection form, that does not mean that those issues will be covered by home warranty insurance in the event that the builder does not follow through. Regardless of what a builder might promise, home warranty insurance is limited to the correction of defects as set out in the policy and in the New Home Buyer Protection Act and its supporting regulations.
Knowing the commencement date for a home warranty insurance policy is important. If the home is a single family dwelling or a single unit in a multiple family dwelling, depending on the ownership conditions, coverage may commence the earlier of:
- the date the home is first occupied,
- the date an accredited agency, accredited municipality, or accredited regional services
- commission grants permission to occupy the home, or
- transfer of title.
Proper care and maintenance is important to preserve the long-term value of any new home. The first owner of a new home may receive a maintenance manual from their residential builder or their warranty provider. These manuals provide useful information on the care and maintenance of the new home. Owners who receive a maintenance manual are advised to read their manual carefully and undertake the regular maintenance recommended in it. Performing required maintenance, particularly that which is outlined in the maintenance manual and manufacturer’s manuals, will help ensure your warranty coverage is not adversely affected. Owners who have not received maintenance manuals should contact their residential builder and warranty provider to find out if maintenance manuals are available and clearly understand the maintenance requirements in their warranty contract. To extend the lifetime of their homes and fulfill their obligations under their warranty contracts, homeowners are encouraged to be proactive in learning and implementing home maintenance best practices. For an interactive maintenance guide please click here.
- Take any steps necessary to mitigate the damages caused by the defect.
- Consult the home warranty insurance policy to find the commencement date of the coverage, which will enable the status of the coverage to be determined.
- If you wish to make a claim under your home warranty insurance policy, contact your warranty provider to initiate the claims process.
- Your warranty provider may have your builder contact you to discuss the defect.
- It is advisable that you always contact your warranty provider and seek direction regarding any defects and steps you should take.
- Note that contacting your home builder directly to discuss defects does not initiate a claim under your home warranty insurance. If you choose to contact your builder first, you should be mindful of the expiry date of your home warranty insurance coverage.
Before contacting the warranty provider, consult the home warranty insurance policy and any other documentation provided by the warranty provider in order to understand the specific requirements of that warranty provider's claims process.
Under the Home Warranty Insurance Regulation of the Insurance Act, homeowners have obligations such as following recommended maintenance procedures and taking reasonable action to prevent further damage in the event of an issue with their new home. In most instances, it is advisable to send a written notice of any issues to the builder and warranty provider. In the event of an issue that requires immediate attention, such as a water leak or electrical hazard, a phone call to the builder or warranty provider may be required. Calls should be quickly followed by a written notice. Failure to do so in a timely fashion may affect the homeowner’s right to make any claim. Photographs of the occurrence should be taken before and during any repairs to serve as a visual record for warranty purposes.
The homeowner is obligated to take reasonable action, such as turning off the water or shutting off the breaker, to mitigate or lessen any damages. It is also the homeowner’s obligation to allow timely access to the home, upon receiving reasonable advance notice, for the builder or warranty provider to investigate any claims and/or undertake any repairs. These obligations extend to include any periods when the home is unoccupied or occupied by someone other than the owner. Failure to take appropriate action to mitigate or lessen any damages may result in both the initial issue and any resulting damages being excluded from warranty coverage.
An owner’s duty to maintain and mitigate survives even if the new home is unoccupied, occupied by someone other than the owner, or for sale.
A warranty provider's primary responsibilities under a contract of warranty begin on commencement of warranty coverage. Each warranty provider will have its own specific procedures and requirements for handling of claims, and homeowners should familiarize themselves with the obligations of their warranty provider as laid out in their home warranty insurance policy.
The NHBPA does not explicitly define a claims handling process that must be followed by all warranty providers. However, there are certain general expectations homeowners can have regarding the services provided by their warranty provider:
- On receiving notice of a claim, a warranty provider should promptly make reasonable attempts to contact the homeowner to arrange an evaluation of the claim.
- The warranty provider should make reasonable efforts to avoid delays in responding to a claim, evaluating the claim, and scheduling any required repairs.
- If, on evaluation of a claim, the warranty provider determines that the claim is not valid or not covered, the warranty provider should notify the homeowner of that decision in writing, along with the reasons for the decision.
- Repairs should be undertaken in a timely manner, with reasonable consideration given to weather conditions and the availability of materials and labour.
- All repairs and replacements made under a home warranty contract must be completed in a reasonable manner using materials and labour conforming to the Alberta Building Code and industry standards.
Please note that these are guidelines only. Homeowners should carefully read their home warranty insurance policy to understand the obligations of their warranty provider, as well as to comply with all notices and other provisions it contains.
Warranty providers often have contracts with their residential builder clients that, for a specific period of time, obligate the builder to correct defects that are deemed to be covered by home warranty insurance. The decision on who will correct defects, whether the original builder or another contractor, is made by the warranty provider.
Owners are required to provide their warranty provider and/or any of their agents, including builders, with access to their home to investigate claims or conduct repairs at all reasonable times, provided they are given reasonable advance notice. Failure to provide this access could result in the denial of the claim.