Fixing the Leaks

Home buyers and sellers will enjoy new confidence that the home they buy is sound, if the Government of Alberta follows through on its promise to introduce legislation to augment home warranties this fall.

The new rules, to be tabled at the fall sitting of the legislature, which begins Oct. 23, would make warranties mandatory for all new homes, and also toughen fines for negligent builders. The changes come in the wake of an increase in complaints around the province of condo owners facing hefty repair bills on leaky units.

“This legislation will make sure it’s a standard warranty, everyone will know what they get and there will be a process in place so that they can ensure action when they need to access the warranty, and that security is what Albertans are looking for,” said Alberta Municipal Affairs Minister Doug Griffiths in an interview with Global Edmonton. “Having a standardized long-term warranty on the largest purchase most families make to give them some security is important and that’s what we’re doing.”

The new rules would increase the maximum fine for a first-time building code offence from $50,000 to $100,000, with the fine for a second offence increasing from just $30,000 to $500,000. The statute of limitations on building code offences would also increase from six months to three years.

Amongst those in strong support of the proposed legislation is CREB® President Bob Jablonski.

“New buyer protection is such a contentious issue in our communities, especially considering the recent problems with some condos that have been identified around the city, and it’s good to see the province is finally responding to the need,” said Jablonski, noting that greater protection will improve the consumer experience. “Buyers and sellers can have greater confidence that a structure is sound.”

Along with the unfortunate Alberta homeowners facing repair bills, Larry Fournier is one of those who has seen the damage caused by shoddy workmanship.

In the last two years, Fournier’s company NVR Construction, has worked on six different projects around Calgary, including one building currently under repair in the inner city that dates back only four years.

“It’s only four years old, and I have to tear off the entire stucco finish to redo it because it wasn’t done properly, and they were already seeing evidence of rot on the exterior sheathing,” said Fournier. “That’s hard for any of these owners to take – it’s not even 10 years old.

“[We’ve seen] all kinds of different damage, from complete rot of wood structure to different types of moulds. It’s a lot of different stuff.

“A building can be a complex envelope, and unfortunately if one aspect of that envelope is compromised because it isn’t done correctly, it can compromise the entire envelope.”

Last year in Calgary, residents at one Calgary condo complex were faced with repair bills as high as $189,000 each after several building code violations were found in their building. Under the proposed legislation, new homebuyers in Alberta will automatically get five years of protection from water damage, two years of protection for major systems like plumbing and electrical, and a 10-year structural warranty. Currently, there is no mandatory protection for damage caused by water penetration or for major systems that fail.

With questions remaining regarding the new legislation, such as who will administer the new program and what happens if a developer goes bankrupt, there are few things that any prospective homeowner can do to help ensure that they’re not left with an unexpected bill.

“The first is to make sure [homeowners] do their due diligence,” said Jeff Kahane of Kahane Law Office. “The concept of buyer-beware is still very prevalent here. If the seller knows, they should be disclosing it. Definitely they should get a home inspection, even on condos.”

Those sentiments are echoed by Jablonski, who said that before entering into any agreement, buyers should consult with their REALTOR® and review all condo documentation.

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