According to the Homeowner Protection Act and regulations, new homes built in B.C. by licensed residential builders must be covered by mandatory, third-party home warranty insurance. 

It’s one of the strongest construction defect insurance coverages in Canada.

The below summaries are for convenience only. They do not replace or supersede the Homeowner Protection Act and Regulation. You should consult the Act and Regulation for specific guidance regarding home warranty insurance and residential builder licensing.

This applies to all new homes constructed under building permits applied for on or after July 1, 1999 (or where construction started on or after July 1, 1999, in areas not requiring building permits), unless they are specifically excluded by the Homeowner Protection Act or Regulations.

Minimum coverage

At a minimum, home warranty insurance coverage includes:

• 2 years on labour and materials (some limits apply)

• 5 years on the building envelope, including water penetration

• 10 years on the structure of the home

The two-year labour and materials coverage covers any defect in labour and materials for:

• 12 months on detached homes and on non-common property in strata units (including fee simple homes)

• 15 months on the common property of strata buildings

• 24 months on all new buildings for defects when related to delivery and distribution systems; defects related to the exterior cladding, caulking, windows or doors that may lead to detachment or material damage to the new home; coverage for violations of the Building Code that constitute a health or safety risk or is likely to result in damage to the new home; and defects which render the home unfit to live in.

Minimum coverage for third-party home warranty insurance is set by legislation. As a minimum, homes built by Licensed Residential Builders must have 2-5-10 Year Home Warranty Insurance. Some new homes have warranty insurance coverage that exceeds the minimum requirement. You should carefully review your home warranty insurance policy documents which will provide specific details on the home warranty insurance coverage on your home.

The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.

Strata-titled homes have two home warranty insurance policies: one for the home and the other for the common property. Sometimes when the coverage of a new strata-titled home starts, the coverage on the related common property has already started — or expired. Coverage on the common property of strata-titled buildings starts when the first unit in the building is occupied or sold.

Owner builder exemptions

The most common exemption from the licensing and home warranty insurance requirements is a new home built under an Owner Builder Authorization.

Unless home warranty insurance is provided, owner-built homes are subject to the 10-year Statutory Protection provisions of the Act. These provisions hold the owner builder personally responsible to subsequent purchasers for any defects in labour, materials or design for 10 years after first occupancy.

If you buy such a home and find defects, you must contact the owner builder directly. Any action to remedy defects by a purchaser must be started within the 10-year period.

Further exemptions

The Act and Regulation also exempt the following classes of new homes from the requirements for home warranty insurance, registration fees, reconstruction fees and builder licensing:

1. Manufactured homes, including mobile homes (CSA-Z240) and factory-built homes (CAN/CSA-A277)

2. Hotels and motels

3. Dormitories

4. Care facilities

5. Floating homes

However, if any of the above (excepting manufactured homes) are strata-titled, they are deemed to be new homes and require home warranty insurance, registration fees and reconstruction fees (where geographically applicable).

The Act and Regulation exempt the following classes of “new homes” from the requirement for licensing, home warranty insurance, registration fees and reconstruction fees:

• Multi-unit buildings owned under a single title and constructed for rental purposes

• Multi-unit buildings that are strata-titled, but held under single ownership and constructed for rental purposes

• Three or more dwelling units built for rental purposes and owned under a single legal title

In these cases, the owner must provide a restrictive covenant that is registered on the title restricting the sale of any dwelling unit for a 10-year period. More information can be found in the Rental Exemption section of our website.

New homes on First Nations lands

Homes built on First Nations reserve lands are also excluded from the requirements of the Homeowner Protection Act and are not required to be built by a Licensed Residential Builder and have 2-5-10 year home warranty insurance coverage. It's important to note that homes built on Treaty First Nations lands are not exempt from these requirements and do require licensing and home warranty insurance coverage. While licensing and home warranty insurance are not required for homes built on reserve lands, builders constructing homes on reserve lands may voluntarily become licensed or offer home warranty insurance for the homes they build. If a new home is voluntarily enrolled in home warranty insurance coverage, the coverage provided must meet the minimum requirements of the Act and Regulations; it is the same coverage as the mandatory 2-5-10 year home warranty insurance coverage.

Commencement dates

Commencement dates on home warranty insurance are:

Fee simple (primarily detached dwelling units)

• Custom homes: date of occupancy or date of first occupancy permit, whichever occurs earliest

• Spec. (speculative) homes: date of first occupancy or date of transfer of legal title, whichever occurs earliest

Strata homes

• Strata unit: date of first occupancy or date of transfer of legal title to the first owner, whichever occurs earliest

• Common property: date of first-unit occupancy or date of transfer of legal title, whichever occurs earliest

Exclusions

The Act and Regulations say what the home warranty insurance companies can exclude from their policies.

General exclusions can include:

• Landscaping

• Non-residential detached structures (parking structures, recreational and amenity facilities in multi-unit buildings are covered)

• Commercial use areas

• Roads, curbs and lanes (driveways are covered)

• Site grading and surface drainage

• The operation of municipal services

• Septic tanks and fields

• Water quality and quantity

Defect-related exclusions can include:

• Normal wear and tear

• Normal shrinkage of materials from construction

• Use of new home for non-residential purposes

• Labour, materials and design supplied by the owner

• Damage caused by anyone other than the residential builder

• Damage caused by insects or rodents

• Failure of an owner to prevent or minimize damage

• Acts of nature

Coverage limits

Coverage on claims works as follows:

Fee simple (primarily detached dwelling units):

• The lesser of the first owner’s purchase price or $200,000

Strata homes:

• Strata unit: lesser of the first owner’s purchase price or $100,000

• Common property: the lesser $100,000 times the number of dwelling units in the building or $2.5 million per building

Source: BC Housing

Douglas Todd: Ottawa has lured a supercharged volume of immigrants and temporary residents to Metro Vancouver — 119,000 in one year alone — without providing the infrastructure to support them.

Author of the article:

Douglas Todd

Published Jan 14, 2025  •  Last updated Jan 15, 2025  •  5 minute read

The country's population growth has been "cheer-led" by politicians, the housing industry, universities and corporations, says Brad West, mayor of Port Coquitlam and chair of the mayors council on transportation. PHOTO BY JASON PAYNE /PNG

“I guess the federal government had this misguided idea that you could invite all these people to Canada and they wouldn’t have needs. They were never going to use the health-care system, they were never going to flush a toilet, they were never going to send their kids to school.”

So says Port Coquitlam Mayor Brad West, who is among the few politicians raising alarms about what he calls a “sleeper issue” — that Ottawa has been allowing a high number of immigrants and temporary residents into the country without providing the infrastructure to support them.

The absorptive capacity of Metro Vancouver has been stretched beyond its limits, said West.

In 2023, the net number of new people moving into the region — 119,000 — was almost four times higher than in 2015, when Prime Minister Justin Trudeau was first elected.

The majority of the recent surge of international newcomers are guest workers and foreign students, who not only need housing but are eligible for universal health care and many other government services.

The country’s unrivalled growth has to date been “cheer-led” by almost all federal, provincial and municipal politicians, the housing industry, universities and colleges and the corporate world, West said.

“It’s only been in the last few months or so that these people are now acknowledging, ‘Oh s — t. Maybe there’s a downside to this.’

“It’s a pretty simple equation: You can’t have supercharged growth without investing in upgrades.”

Although West is one of the few politicians to speak out about the cost to taxpayers of record migration levels, last week a poll by Pollara for the CBC found 82 percent of foreign nationals who had arrived in the past 10 years agreed with the statement: “Canada has accepted too many immigrants and international students with no planning for adequate housing, infrastructure, or having sufficient job opportunities.”

Related concerns have been raised in recent months by some provincial governments and economists. Ontario officials estimate that one in four of the province’s welfare recipients are foreign nationals who have applied for asylum. Quebec, which has more control over immigration than over provinces, has frozen applications for temporary workers and permanent residents, saying it can’t afford to provide the social services.

Indeed, when provincial and territorial premiers of Canada gathered at last year’s meeting of the Council of the Federation, many expressed anxiety about higher housing prices, inflated rents, more people using food banks, newcomers sleeping in shelters, strained education systems and the difficulties people have finding family physicians.

Prominent B.C. business economist Jock Finlayson agrees that Ottawa, which sets migration targets, encouraged near-record population growth “with zero planning.”

The federal government is to blame for the immense pressure on public services, says Finlayson, now chief economist for the Independent Contractors and Builders Association after decades as policy head at the Business Council of B.C.

“The uncontrolled surge in temporary immigration represents a colossal public policy failure — as sheepishly acknowledged by Trudeau and his ministers when they abruptly announced they were reversing course on immigration targets last year,” said Finlayson.

Before that, “anyone who dared to raise doubts or questions was immediately dismissed as ‘anti-immigrant’ by the Trudeau thought police. So, we have ended up where we are, in a big mess largely fostered by ineffective policies, a lack of planning, and incompetent national leadership.”

Metro Vancouver’s net population grew by 119,000 people in 2023, or 4.2 percent, almost entirely from international migration. The rate of expansion is far faster than in previous years. (Source: Central 1)

The public is ahead of politicians and business leaders on pinpointing the problems of a surging population, said West, who supports “balanced and reasonable” migration levels that work within society’s “capacity to absorb.”

It used to be a person could get help at a Metro Vancouver emergency room within a few hours of arriving, said West. “Now you hear horror stories of people with serious issues who are waiting eight, 10 or 12 hours to be seen,” he said. “And that’s not to mention all the people without family doctors.”

In Metro Vancouver, about 50,000 new permanent residents arrived in 2023. In addition, at least one in 10 people in B.C. are on temporary visas, according to Statistics Canada. That’s the highest of any province.

While the federal government can’t say how many people are in the country on work or study visas, the Opposition in December obtained information from the Immigration Department that the number of temporary visas to expire this year alone is 4.9 million.

The high numbers not only create intense demand for affordable housing and rents, said West, it’s led to a record number of people signing on for B.C. medicare. “The only qualification is that you’re a resident of B.C.”

B.C. Health Ministry officials confirmed that guest workers and foreign students receive subsidized health care when they pay a monthly fee of $75. Ontario doesn’t allow foreign students to access Medicare.

Education is also under pressure, West said. “All you need to do is look at the number of portable classrooms that exist throughout the region to feel the brunt of (increased population) with respect to public education,” he said. “Portables are no longer the exception, they’re the rule.”

In swiftly growing cities such as Surrey, West said, some elementary and high-school students are even having to use portable lavatories, a reality confirmed by a Surrey school district official.

The B.C. education ministry confirmed children of guest workers, as well as of roughly 200k international students, are offered kindergarten-to-Grade-12 public-school educations. The ministry, however, has no data on their enrollment numbers because they’re “not identified as a separate category.”

West, as a TransLink board member and chair of Metro Vancouver’s mayor’s council on transportation, has directly noted Ottawa’s funding deficiencies when it comes to the impact of sudden population growth on such things as sewage treatment and drinking water.

“I defy you to find me a single dollar of money that went to a project because the federal government said, ‘Oh, we’re opening the country up to millions more people and, you know what, we better start investing more money in the services and infrastructure they will rely upon.'”

Despite recent promises by Trudeau to lower targets for permanent and temporary migrants, West doesn’t believe authentic drops will happen, in part because the status quo “suits some pretty powerful interests.”

“Now, half a decade after the damage has been done, they’re saying maybe we need to dial migration back a bit. But I expect they’re making a lot of noise, saying they’ll do this and do that, and it won’t happen.”

dtodd@postmedia.com