The Alberta New Home Warranty Program: The Complete Guide

Everything you need to know about protecting your property with the Alberta New Home Warranty

If you’re buying or building a new home in 2022, or if you already have—congratulations!—you’ll want to bookmark this blog about the Alberta New Home Warranty Program (ANHWP).

Our complete guide to the Alberta New Home Warranty covers (see what we did there?) everything you need to know about protecting your new home. In this blog, we’ll:

• Describe the program,
• Go over new property coverage, and
• Teach the fundamentals of staying protected.

We’ll start at the beginning by explaining the ANHWP, the law it covers, and how it works. 

What is the Alberta New Home Warranty Program?

The ANHWP has been the benchmark for new home warranties, renovation warranties, and homebuilder insurance in Alberta for over 45 years. The ANHWP serves Alberta homeowners and the most well-respected home builders in the province.

As an independent, not-for-profit organisation, the ANHWP’s mandate is threefold:

1. Create and offer new home warranties to homebuyers, 
2. Work with home builders to improve the quality of their work and their after-possession customer service, and
3. Offer training programs and certifications to Canada’s residential builders through its training branch, the Professional Home Builders Institute. 

The New Home Warranty Program: Beyond Alberta

The ANHWP’s reach goes beyond Alberta. Since 1974, they’ve been the home warranty leader in Western Canada. Through the Canadian Home Warranty Protection Program (CHWPP), their national branch, they serve over 100,000 homeowners throughout British Columbia, Saskatchewan and Manitoba. 

With over 400 builder members, the ANHWP partners with Alberta’s top homebuilders to improve industry standards throughout the province.

The New Home Warranty Insurance Canada Corporation (NHWICC), an independent warranty provider, backs and insurers ANHWP’s policies.   

The ANHWP isn’t the only warranty provider in Alberta though. Keep reading for a full list of provincial options.

New home warranty providers in Alberta

Aside from the ANHWP, there are six other warranty providers to choose from in the province:

• Millennium Insurance Corporation
• National Home Warranty Group Inc. – Aviva Canada Inc.
• Progressive Home Warranty Ltd. – Trisura Guarantee Insurance Company
• Blanket Home Warranty Ltd. – Intact Insurance Company
• WBI Home Warranty Ltd. – Intact Insurance Company
• Travellers Insurance Company of Canada

The ANHWP and the other providers exist to meet new home building laws in Alberta. We’ll therefore cover the law that governs residential builds next. 

What is the Alberta New Home Buyer Protection Act?

Alberta’s New Home Buyer Protection Act states that a home warranty must cover all new homes built in the province. A provincial law, the act exists to protect homeowners against shoddy workmanship. 

The Act came into effect on February 1, 2014. The act shields a property with building permits placed on or after this date.  

What the act protects:

• Single-family homes, 
• Multi-family homes, 
• Duplexes, 
• Condominium developments, 
• Manufactured homes, and 
• Recreational properties

What the act doesn’t protect: 

• Commercial property, 
• Work camps, 
• Care facilities, 
• Hotels and motels, and 
• Homes built on First Nations reserves

Reputable Alberta builders most likely build or sell new homes insured by the ANHWP. The earlier mentioned alternative warranty providers are all well-respected. None, however, have the reach and familiarity of the larger ANHWP.

How does the Alberta New Home Warranty work?

A residential home contractor is responsible for covering the residence under warranty. In short, this involves three steps:

• The builder must enroll a new home with a warranty provider like the ANHWP, 
• Its warranty must meet legislated requirements, and 
• The contractor must register the new home warranty on the province’s Property Registry.

Under the Alberta New Home Buyer Protection Act, a new home warranty stays attached to the home, not the owner. If an owner sells a home under warranty, the warranty stays valid. Coverage stays valid until coverage expires.

Warranty coverage begins as soon as:

• The new home is occupied,
• The former owner transfers the title of the new home to the new owner, or
• The permitting authority gives the ok for the new owner to occupy the home.

Is a new home warranty mandatory? 

New homes permitted in Alberta on or after February 1, 2014, must have third-party warranty coverage—no exceptions. Alberta is one of only four Canadian provinces that require builders to offer homebuyer protection. The other three are:

• British Columbia
• Ontario
• Quebec

In the rest of Canada, the builder decides whether or not to offer a warranty. Having said that, an individual builder must offer homeowner protection if they want to be a member of the Canadian Home Builders’ Association.

How the Alberta New Home Warranty can help homebuyers choose a builder

What’s the homebuyer’s responsibility when it comes to the Alberta New Home Warranty Program?

As a buyer, you can narrow down your choice in builders depending on the type and amount of homeowner protection they offer.

• If you interview a builder that doesn’t offer third-party coverage, you can cross them off your list of potentials. 
• If a builder’s purchase contract doesn’t include pre-possession insurance, you can remove them from your list—more on this later.

You want to aim to work with a professional builder with a strong reputation, excellent references, and strong third-party insurance for their homeowners.

What are the legislated must-haves for new home warranty coverage in Alberta? Let’s find out.

What does the Alberta New Home Warranty cover?

Alberta’s New Home Buyer Protection Act states new builds must come with a minimum amount of third-party coverage. Home builders can offer more, but no less. 

This is no different from, say, a car, major appliance, or smartphone. These things normally come with a basic warranty against manufacturer defects; same goes for a new home.

What’s the minimum coverage allowed on a new build in Alberta? Here’s a hint: 1, 2, 5, 10.  

1-2-5-10 Alberta New Home Warranty Coverage

New residential properties must have mandatory coverage in Alberta for a minimum of anywhere between one and ten years depending on the type of defect. 

Specifically, under the act, a warranty must protect a new property for at least the following:

Period	Coverage	Details
1 year	Labour and Materials	Covers any defects in labour and materials inside the home including flooring, staircases, baseboards, cabinets, railings, trim, and fixtures.
2 years	Delivery and Distribution Systems	Covers defects in labour and materials related to electrical, plumbing, heating, ventilation, and air conditioning.
5* years	Building Envelope Protection	Covers defects in the building envelope, or the exterior of the home. The envelope separates the home’s inside from the outside and helps with climate control. Building envelope protection includes the roof and walls.
10 years	Major Structural Components	Covers defects in the building’s structure including the roof and foundation.

*There’s an exception to the 5-year time building envelope protection period that we’ll go over next. 

Additional new home warranty protection

Now that we’ve gone over the mandatory 1-2-5-10 warranty, we’ll cover additional protection options for new homes. The two main ones are: 

1. Extended building envelope protection
2. Living expenses

Extended building envelope protection

Builders can purchase an additional 2 years of building envelope protection. The builder would then pass this optional coverage along to the buyer. 

An extended building envelope warranty protects your home for an additional two years above and above the mandated five-years. This means you’d get to brag about having a 1-2-7-10 warranty on your new digs! 

Ask the homebuilders you interview if they offer this additional protection. Their answers may pleasantly surprise you. 

Living expenses 

A new home warranty should cover living expenses in the event you can’t live in your house during repairs. Ask your shortlist of builders whether or not their coverage policy includes the cost of temporary relocation. 

Above and beyond the 1-2-5-10 warranty coverage, homebuyers enjoy protection prior to taking possession of their new pad. 

The next section of this blog talks about this piece of the warranty puzzle. 

Pre-possession new home coverage

In a nutshell, pre-possession insurance protects a buyer during the period of time before new home warranty coverage kicks in. More accurately, pre-possession coverage is a combination of two things:

1. Deposit insurance – protects a buyer in the event the homebuilder backs out of the deal before construction begins. Insurance protects a buyer’s initial deposit up to a maximum of $100,000. Protection expires once construction starts. 
2. Home completion insurance – protects a purchaser from the moment construction begins until possession day. Insurance safeguards future deposits made after the initial deposit up to a max of $100,000. 

We highly recommend you talk with your homebuilder about their pre-possession warranty before signing a purchase contract.

How much does Alberta New Home Warranty cover?

The Home Warranty Insurance Regulation sets insurance claims limits in the province of Alberta. 

The maximum coverage limit per property type are the following:

• Single-family home: $265,000
• Condominium unit or other unit found in a multi-family complex: $130,000
• A non-condominium multi-family unit (e.g., a duplex unit or row townhome with no common property): $265,000
• Common property of multi-family buildings (e.g., elevators, lobbies, stairwells): $3.3 million 

The limits are based on the average cost of rebuilding a home. The amount takes into account the cost of the structure only. Coverage does not include things like redoing the landscaping, the cost of the land, or replacing the home’s contents. 

We recommend owners purchase additional homeowners insurance above and beyond what’s offered by the new home warranty. 

The goods news: Homeowners can buy additional coverage if they’d like prior to their possession date. 

How much does the Alberta New Home Warranty cost?

Unfortunately, the Alberta New Home Warranty isn’t free. The price is minimal, though, and will practically go unnoticed when rolled into the final cost of your new residence. 

When you consider the alternative—at risk of costly manufacturer defects or terrible workmanship—the investment is well worth it. 

The exact price of the warranty will vary depending on the provider, the builder, and the type and size of the home you build. 

On average, it will run you about $2,500, or roughly less than 1% of the total cost of the home. 

Are there exemptions to home warranty coverage? Let’s find out. 

Alberta New Home Warranty exemptions

There is one main exemption to the new home warranty: landowners who want to build their own home.

Under the New Home Buyer Protection Act, owner-builders can apply for what’s called an owner-builder authorization.

Issued by the Alberta Public Registrar, an owner-builder authorization gives a builder the right to construct a property without a builder licence. 

Once approved, an owner builder can:

• Obtain building permits, and
• Decide whether or not to purchase a warranty.

Owner-Builder Authorization

Under an owner-builder authorization, approved owners:

• Are accountable for the quality of the homes they build, 
• Must live in the home as their primary residence for at least 10 years,
• Are responsible for maintaining the home within the 10-year warranty duration, 
• Can’t sell their home within the 10-year warranty period unless they’ve purchased insurance coverage,
• Must be on the land title as the registered owner (either as sole or joint owner),
• Must be the general contractor on the build and/or show that they intend to take part in all or most of the home’s construction, 
• Must be in good standing under the New Home Buyer Protection Act, and
• Can choose to build with or without a home warranty.

An owner-builder authorization holds the owner-builder accountable for the quality of the homes they build and protects future homeowners from poor craftsmanship.

Restrictions on a owner-builder authorization

Owner-builder authorizations are for single-family, site-built homes only. The owner must prove the new residence will be their primary residence. Owner-builder authorizations do not apply to:

• Multi-family homes, e.g., duplexes and condos
• Rental homes
• Factory-fabricated homes built off-site

How does the New Home Warranty in Alberta protect condo owners?

Condo owners have the right to warranty protection under the act.

When looking to buy a condo, we recommend you find out:

• The insurance start date for the unit you want to buy, and
• The start date for the building’s common property (as it may be different from the unit itself) 

As a condition of the sale, request a review of the Building Assessment Report and/or Converted Property Study from the condominium corporation. Familiarise yourself with warranty start dates and only remove sale conditions when you feel comfortable with what you find out.

Other Alberta New Home Warranty considerations

What if you plan on renovating your home? Or, maybe you’re looking to convert a garage into a residential property and then rent it; what then? Keep reading—we answer these questions in this section. 

Renovations

As long as the contractor is licensed under the New Home Buyer Protection Act, a renovation doesn’t need home warranty coverage.  

The one exception is if you plan on renovating 75% or more of the home. In this case, the property is considered brand new construction and needs insurance.

Home relocations

It’s not every day that a person thinks about moving a house to a new location!

It’s worth mentioning though how a home relocation affects a new home warranty. A home relocated to Alberta falls under the same rules as a new home under the New Home Buyer Protection Act.

Keep the following details in mind if you ever plan to move a property: 

• If a homeowner rebuilds 75% or more of it after it’s relocated, it’s considered new. The home would then fall under the New Home Buyer Protection Act.
• Alberta’s new home warranty insurance stays with the house and, in the case of relocations, moves with it both figuratively and literally!
• Warranty protection may or may not cover damage caused by a move. Best to double-check with your insurance provider before booking the moving truck. 

Use change or rental

When a homeowner wants to change a structure not originally meant as a dwelling (e.g., garage, commercial space, etc.) into a residence, they must:

• Show they meet the requirements of the New Home Buyer Protection Act before they can get a building permit, 
• Secure insurance coverage for buildings converted into condos, 
• Double check whether or not the conversion meets the renovation threshold of the act and, if it does, secure warranty coverage.

What about rentals?

Multi-family rental units don’t need a new home warranty if the owner plans on keeping the property for at least ten years. 

How to register your Alberta New Home Warranty

Under the Alberta New Home Buyer Protection Act, it is the residential builder’s responsibility to:

• Hold a valid builder licence, 
• Get warranty coverage on proposed new homes at the time of applying for building permits, and 
• Register their new builds with the Alberta New Home Warranty registry.

It is not the homeowners responsibility to register their property unless they’re an owner-builder. 

How to file an Alberta New Home Warranty claim

It’s never fun to discover, less than a year after moving into your swanky new pad, that there’s an issue with the roof, plumbing, or flooring. 

When this does happen, however, it’s good to know what to do ahead of time. 

If you find an issue with your house, do the following:

1. Watch this nifty video by YourAlberta about how to file a claim. 
2. Read your warranty policy. Familiarise yourself with your coverage. Take note of any conditions, exclusions, expiry dates, or claim reporting cut-off dates. 
3. Double check (!) your warranty still covers the specific type of defect you’re experiencing,
4. Make a claim with your warranty provider—they’ll tell you what to do next,
5. The provider is responsible for coordinating with the builder to correct the problem. They may very well ask you to provide additional information to settle the claim. 

Keep reading for what to do if your warranty claim is denied. 

How to dispute an Alberta New Home Warranty claim

If your new home warranty claim is denied, or if there’s a dispute between you and your warranty provider about a claim, there are a few steps you can take to try to resolve the disagreement:

1. If you think there’s a problem, talk with your insurance provider first
2. Make your complaint in writing. Be clear about what you see the issue to be and how to you’d like it resolved
3. Know your rights as a homeowner
4. Keep a file of your complaint documents and a record of your conversations, both electronic and over the phone
5. Take the complaint to arbitration via a third-party mediator 
6. Get legal advice if necessary

For more information on filing a warranty claim complaint, visit the Goverment of Alberta website. 

Your New Home Warranty: How it applies in St. Paul and Bonnyville, Alberta

Now that you’re an expert on Alberta new home warranties, you can take knowledge with you on your house hunt. 

Are you looking for a new home builder, custom or not, in the St. Paul, AB or Bonnyville, AB areas? We have a list of trusted builders in our region—all you have to do is ask!

Alberta New Home Warranty: What’s Next?

Congratulations on deciding to buy a new home!

CENTURY 21 Poirier can help you navigate the new home and condo market. Our team will work with you to be sure your purchase is covered by the Alberta new home warranty.

With decades of experience working with insurance providers, home builders, and condo management companies, the team at CENTURY 21 Poirier can help you to plan your new home purchase safely. 

Contact us with questions you may have about this complete guide to the Alberta New Home warranty—and when you’re ready to move to a new home. We’ll sell your current property and help you purchase your next one.

Here’s to protecting your biggest purchase with the right warranty!

From the team at CENTURY 21 Poirier