A Short Guide to Home Warranties
Posted by Justin Havre on Friday, May 4th, 2018 at 9:15am.
When it comes to filing a claim for faulty workmanship or improper appliance installation, a homeowner might be surprised at what their warranty does and doesn't cover after they've purchased a home. This is partially because no one takes the time to read every clause and partially because a warranty in Ontario will not necessarily be the same as a warranty in Quebec. Homeowners should have a general idea of the underlying principles though, so they can get the most out of their warranties.
How It Works
The home warranty process is all about proof and circumstance. So even if it's clear that a construction worker busted a pipe during their time on the job, homeowners need to check to see if this particular event is covered under the warranty. Some companies will only take responsibility for the building envelope (or the structure that separates the outside of the home from the inside.) Once the specifics of the warranty have been verified, the warranty company will call an unaffiliated third party to corroborate the homeowner's claim. Only when the third party agrees the builder made a mistake will the warranty company call their insurance company to pay for the damage.
Who's Protecting Whom
Local authorities typically don't require builders to offer warranty protection of any kind. Instead of mandating it, they'll penalize builders who don't offer these special policies. So a builder may only be able to work with a limited group of low-risk buyers if they don't offer protection. When it comes to how much protection a person receives, authorities put minimum limits on builders depending on their location.
Buy a home in Manitoba, and the homeowner can get up to $50,000 to fix anything that may have gone wrong during the construction process. But buy a home in Ontario, and the homeowner can get up to $300,000. With these types of discrepancies, it helps to have an idea of local laws before deciding on a home (or even a province).
Checking the Fine Print
Homeowners usually can't go to their standard home insurance policy to fix problems that were caused by the contractor or the installer. Certain warranties go past workmanship mistakes to general building troubles. So if a construction crew in Alberta pushes back their completion schedule from June to September, a buyer will most likely be protected against this type of drastic change.
Homeowners should also pay attention to the time limits on the work because there will usually be a split in terms of the benefits. For example, Ontario homeowners receive two years of full protection against poor workmanship and 10 years of general coverage on the full structure.
The cost of the original warranty is based on the purchase price of the home. Resale homes will usually pass down the home warranty as a perk of the sale, but the time limits will be a continuation of the original owner and not reset when the sale goes through. If the builder or seller offers zero protection, a buyer may want to consider going through a third party company if they want the extra peace of mind.
Home warranties are a routine part of homeownership, but they're not exactly routine in terms of how they function for each homeowner. By learning more about the nuances of each warranty and how certain provinces respond to different circumstances, it's easier to find the right protection no matter what type of home a buyer is considering, whether it's in downtown Okotoks or elsewhere.