Home warranty: Protecting yourself from new home building issues
Published Wednesday, August 2, 2017 6:00AM PDT Last Updated Wednesday, August 2, 2017 11:01AM PDT
Home owners rely on a good builder, on city inspectors and their own inspections to make sure the new house they are buying is up to par. But sometimes the problems don't always reveal themselves until after you move in. Fortunately, there are protections in place to ensure home buyers are not left hanging.
Lydia Cabrall and her husband are thankful that their builder was licensed and registered with B.C.'s Homeowner Protection Office otherwise they could have been left hanging with tens of thousands of dollars in repairs.
Their two-year old home looks like a construction site, with bathrooms all torn up, uneven floors and a crack in the foundation.
She says the home has more than 100 defects, and the repairs are nearing $100,000. They are now being handled under their home warranty but she questions how it could have passed inspection because apparently, the home was built to code.
But after a leak was discovered in their basement the warranty company dug up around the foundation and discovered some issues with inadequate damp proofing.
McLaughlin on Your Side showed photos of the home to Nathan Stone, VP of the Canadian Homebuilders Association who wasn’t convinced.
“As it stands today, I would say that doesn’t meet code,” said Stone as he anaylyzed pictures of the foundation, “Holes like that should be prefilled with the damp proofing so that they wouldn’t leak.
The Township of Langley signed off on it after a visual inspection but told CTV News in an email statement that, “Once an inspection is approved, Township staff do not remain on site to witness or observe backfill work.”
So what about the uneven floors discovered on both levels of the two storey home? The framing passed code too.
"As we say it's the minimum allowable level to which you can build to make sure the home is safe and to make sure the home is ready for occupancy," explained Stone.
Quality control is up to the builder.
Cabral says her builder, Jasbir Dhaliwal with SDS New Homes, never came back to fix the problems, but fortunately he was was registered and had the required BC Home Warranty.
“It’s one of the best in the country, absolutely, the envy of all the other provinces,” said Stone.
It ensures that work is done to industry standards not just code and covers:
- 2 years on labour and materials
- 5 years on the building envelope including water penetration
- 10 years on the structure.
Without the home waranty to pay the cost, Cabral says they wouldn’t have been able to afford all of the needed repairs.
"We would be living in a house that we resented," she said.
If you discover problems with a new home you need to report them right away in writting to both the builder and the warranty company because the clock starts ticking on the warranty when the title passes out of the builder’s name.
“We have to have a good sum of money sitting as a bond with the warranty company that's how they give us our license and our warranty," Stone explained.
The builder gets a chance to address problems first before warranty kicks in and if those deficiencies don’t get fixed, the insurance company will send the builder the bill.
The warranty company is now in contact with Cabral’s builder. Dhaliwal says he was told the repairs will cost an estimated $60,000, but Cabral says she was told by the insurance company that it's now into six figures.
CTV News contacted Cabral’s insurance company, Aviva. the company the case is a perfect example of how a warranty can help a homeowner. New contractors have been hired and Aviva is promising to make sure the Cabrals are satisfied with the fix.
And what about home inspectors? Just like builders you need to research them carefully too. Last year the province beefed up standards for home inspectors and now they can also be held liable if they make mistakes. Unfortunately, those rules weren't in place when the Cabrals bought their house.