2-5-10 Home Warranty Insurance:
1. How are you protected? Summary of 2-5-10 Home Warranty:
In BC, new home warranty insurance covers three aspects of home construction:
2 years Materials & Labour Warranty
First 12 months -
Coverage for any defect in materials and labour.
First 15 months -
Coverage for any defects in materials and labour in the common property of a multi-unit building.
First 24 months -
Coverage for any defect in materials and labour supplied for the electrical, plumbing, heating, ventilation and air conditioning delivery systems. In addition, coverage for any defect in materials and labour supplied for the exterior cladding, caulking, windows and doors, that may lead to detachment or material damage to the new home.
5 years Building Envelope Warranty
10 Years Structural Defects Warranty
2. Manufacturers' Warranties:
Many building components come with a warranty from the product manufacturer that extends beyond the mandatory home warranty insurance coverage period. For example, flooring, cabinets, windows, plumbing fixtures and fittings may come with a separate manufacturer's warranty. Ask the builder for copies of any manufacturer's warranties and review the coverage they offer. These warranties may be in the name of the builder, so find out if you need to have the warranty transferred to you.
3. Further information on 2-year Materials and Labour Warranty:
The minimum warranty coverage for labour and materials is two years and includes:
• any defect in materials and labour or violation of the Building Code* as follows:
12 months for all new homes, other than the common property of a strata corporation
15 months for the common property of strata corporations
• defects in materials and labour supplied for the electrical, plumbing, heating, ventilation and air conditioning delivery systems, as well as for the exterior cladding, caulking, windows and doors, that may lead to detachment or material damage to the new home and violation of the Building Code*:
*To be covered, a violation of the Building Code must constitute an unreasonable health or safety risk, or cause (or be likely to cause) material damage to the new home.
24 months for all new homes, including the common property of strata corporations
4. Further information on 5 Year Building Envelope Warranty:
The building envelope includes the components that separate the indoors from the outdoors, including the exterior walls, foundation, roof, windows and doors. The minimum warranty coverage is five years for defects in the building envelope of a new home, including a defect that permits unintended water penetration such that it causes, or is likely to cause, material damage to the new home.
5. Further information on 10 Year Building Structural Defects Warranty:
The minimum warranty coverage is 10 years for defects in materials and labour that result in the failure of a load-bearing part of the new home, and for any defect that causes structural damage that materially and adversely affects the use of the new home for residential occupancy.
The terms of the coverage define what each general category includes. Read the policy document details carefully to be sure you understand what your home warranty insurance covers, and call your warranty insurance provider if you have any questions.
6. 2-5-10 as a Minimum:
The requirement for a minimum 2-5-10 warranty insurance policy cannot be waived by any separate contract between you and the builder. The Homeowner Protection Act allows for home warranty insurance policies that exceed the minimum 2-5-10 period, but does not permit anything less.
7. When 2-5-10 Coverage Begins:
Each of the different time period coverages will commence on the same date. Starting dates for home warranty insurance coverage are critical, because you calculate the date on which the coverage expires by counting from the starting date. The precise starting date will depend on a number of factors.
• Single detached dwellings (non-strata):
contract or custom homes (built on land owned by the homeowner): date of first occupancy, date of occupancy permit, or date the home was completed and ready for occupancy, whichever comes first.
• Spec homes (built on land that was owned by the builder or developer): date of first occupancy or date of transfer of legal title to first owner, whichever comes first.
• Strata homes: date of first occupancy or date of transfer of legal title to first owner, whichever comes first common property: date of first unit occupancy in strata building or date of transfer of legal title to first owner in building, whichever comes first.
8. Buying a Resale Home with Home Warranty:
If you buy an existing or resale home that is covered by a policy of home warranty insurance, the coverage remains with the new home until the expiry of the 2-5-10 coverages. All of the applicable benefits under home warranty insurance that have not expired are available to any subsequent owners. You or your lawyer should review the policy documents before completing the sale to be sure you know how long any existing coverage extends. At the time of the sale, the existing owner should give the new owner the policy documents as well as the maintenance manual (if one was provided to the original purchaser) and other applicable care/ operating manuals from manufacturers and warranties for appliances, products or systems.