Consumer Protection for New Vancouver Home Buyers – Consult with Bruce Coleman, Vancouver Mortgage Broker
Consumer Protection for New Vancouver Home Buyers
Whether you are buying a re-sale home, new home or a strata property such as a condominium or a co-operative in the Vancouver area, you might be wondering what kind of protection exists for the consumer.
For example, what do you do when you buy a new home and encounter a structural defect because of a design flaw or shoddy materials or workmanship? And, what about older homes – what kinds of protection can you expect there if you encounter a similar problem?
The B.C. Home Protection Office
Also known as the HPO, the Home Protection Office is a branch of B.C. Housing. The legislative regulations are covered under the Homeowner Protection Act. Some of their primary duties of the HPO include the following:
- Issuing licenses to residential builders and building envelope renovators throughout the province
- Owner-builder authorization administration
- Mandatory mediation of warranty insurance disputes between homeowners and warranty insurance providers
The province of B.C. has the strongest construction defect protection system for buyers of new homes in Canada. Legislation came into effect on July 1, 1999. It covers any new homes which were being sold, built and states that any new homes after this date must adhere to the following:
- The home must be constructed by a builder who was licensed by the HPO
- Any new home built after this date must have warranty insurance provided by a third party
What Does Warranty Insurance Cover?
Warranty insurance follows the 2-5-10 concept in that it must cover the following:
- 2 years protection for any defects in design , labour or materials used
- 5 years protection for any defects in the envelope of the building
- 10 years protection which means that if a home covered under the legislation is sold within 10 years, the remaining home warranty insurance is passed on to the new owners
However, you should be aware that this may not completely apply to an owner-builder.
Older homes which were built before this July 1, 1999 will not have warranty insurance, so the consumer must be very proactive in having the home thoroughly inspected before they invest in older homes. You should always ask your realtor about warranty insurance and whether it applies to the home or condo you are buying.
If you are buying a condo or a coop, then you should also know that there are specific regulations which cover you as well. You are best advised to visit the website to obtain more information so that you understand your rights and to know what is covered and what is not covered.
You can also find valuable information when you’re buying a custom built home versus a home spec and what you should know about the contracts involved so you are properly protected. These types of contracts should be reviewed by an experience real estate lawyer before you sign on the dotted line.
You should also be aware that City of Vancouver has its own Building Code requirements and you should ask if the home requires inspection by city inspectors especially if you are thinking of buying a home built before July 1, 1999.
If you do uncover a problem then you should also visit the HPO website which will explain the dispute resolution process which may be resolved through either mediation, arbitration or whether litigation will have to be considered.
New Homes Registry
For those buying a new home you can also check out the New Homes Registry which can be found at the HPO website. This registry allows you to check out both the licensing of the builder and the status on warranty insurance. You can also obtain information of the warranty insurance claims history from the current home owner of the house you are thinking of buying