Strata Tip of the Week - New Home Warranties in Strata Corporations

by Condo Clear

In British Columbia, the Homeowner Protection Act mandates that all newly built homes, (including strata-titled properties) or significantly reconstructed buildings must be covered by third-party new home warranty insurance. This is commonly referred to as the “2-5-10 New Home Warranty”. Basic coverage typically includes:

15 months: Defects in labour and materials
2 years: Building cladding and delivery systems (plumbing, HVAC, etc.)
5 years: Building envelope defects
10 years: Structural defects

1. Why Addressing Warranty Defects is a Positive Sign

While hearing that a strata corporation is addressing warranty deficiencies might raise concerns, we typically see this as a positive sign. The reality is that almost no building is built with zero defects. Addressing problems while the warranty coverage is still active shows that the strata is being proactive and committed to resolving construction related issues.

If stratas neglect to take advantage of their new home warranties and later discover significant deficiencies, the cost of repairs will likely fall on the owners.

2. Start by Obtaining the Warranty Certificate(s)

To determine whether a strata’s warranty coverage is still active, it’s important to request the warranty certificate(s), especially if the building was constructed within the last 10 years. We recommend always requesting and reviewing all warranty certificates, reports, and documents for buildings that are 12 years old or newer.

3. The Importance of Warranty Documentation

If you find no information pertaining to the building’s warranty, this may be a concern, as it could indicate that the strata has not taken advantage of its warranty coverage.

As part of your due diligence for clients, it's vital to obtain and review the strata corporation’s warranty certificate, and all related warranty documents and reports. This information will provide insight into:

The scope of any warranty issues, and
The proactive measures taken by the strata to address deficiencies

By obtaining and reviewing all warranty-related documentation, consumers will be able to understand the extent of warranty deficiencies the strata may be dealing with and their commitment to addressing these. This will ultimately enable your clients to make more informed decisions about their strata-titled purchase.

That’s it for this week. If you have any suggestions for other topics you’d like us to cover, please let us know at info@condoclear.ca.

Disclaimer: The information provided is for general purposes only. It is not intended to provide legal advice or opinions of any kind. No one should act, or refrain from acting, based solely upon the materials provided, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

A little about Condo Clear:

They are a fully licensed brokerage under the BCFSA, and carry Errors and Omissions (E&O) insurance.

They have been in business since 2017 and have completed over 3,000 strata reviews to date province-wide.

Their Review Advisors have firsthand knowledge and experience. They’ve all been practicing strata managers.

A little about Condo Clear Services:

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Learn More: https://condoclear.ca/