Are You Covered by Warranty on a New Home?

If you are building a new home, you might be wondering: “Is there warranty on a new home?”

Initially, most homeowners focus on the cost of building a new home, along with the design of the home. Your builder’s warranty process and what happens after you take possession is just as important. Your new home warranty should be one of the most valuable features included in your new home. In reality, warranty coverage is often one of the last things a homeowner asks about in the process.

You might assume potential defects are covered by warranty for a certain length of time once you take possession.

It might surprise you to know that warranty on a new home is not mandatory in Saskatchewan. Yes, you read that correctly. There is no formal law indicating the home you are building must have warranty included. It can be shocking to know this, considering that a new home is a significant investment in time and finances.

Every so often, we come across a story online, depicting a nightmare situation in which a customer bought or built a new home and later discovered that their house didn’t come with third-party warranty coverage. Once the homeowner has taken possession, problems arise or work is unfinished – and the builder has gone awol. The homeowner is stuck with a messy situation, and perhaps a legal battle. While this doesn’t occur often, it can and does happen. This scenario is usually due to not choosing the right home builder and forgetting to inquire about the home’s warranty policy before signing on the dotted line.

While there is no formal legislation around home builders and warranty coverage, there are some safeguards to ensure warranty on a new home is part of the package.

  1. Certified Professional Homebuilders

  • When building a new home, your best option is to choose a builder that is a Certified Professional Home Builder by the Saskatoon & Region Home Builders Association. It is mandatory that member builders of the SRHBA offer third-party warranty coverage as part of their Certified Professional Home Builder designation.
  1. New Neighbourhoods

  • Home building in new neighbourhoods come with certain stipulations by the land developer. In most cases, home builders are required to offer a third-party warranty coverage policy to build a home in a new neighbourhood.
  1. Financial Institutions

  • Chances are you will need to acquire a mortgage loan from a financial institution. Most lenders will require a proof of third-party warranty coverage from your home builder before they approve your mortgage.
  1. Homeowner Due Diligence

  • One of the most important ways to safeguard yourself and your investment is not only choosing the right homebuilder, but having a thorough conversation with them about their warranty policies, procedures and their coverage early on in the process.

Did you know?

When it comes to infill homes in core/established neighbourhoods, there is no over-arching land developer that requires a builder to offer a warranty package. This is even more reason to discuss warranty coverage with the home builder you’ve chosen to work with.

Understanding Your Warranty Coverage

Once you determine if your home builder provides a warranty package, it is important to know what is or isn’t covered. You’ll also want to know how long various items are covered for. A typical third-party warranty might look similar to this:

  1. One-Year Materials and Labour Warranty
  2. Two-Year Mechanical Systems Warranty
  3. Five-Year Foundation Water Penetration Warranty
  4. Ten-Year Structural Defect Warranty

The specifics of the above might vary, depending on which warranty provider the home builder is a member of.

Home Builder Warranty Plan

An experienced and skilled homebuilder will have their own internal warranty policy. They will also budget for warranty expenditures. The builder includes third-party warranty coverage as a safeguard in the event the building company dissolves at some point. With a skilled and reputable home builder, it is unlikely that you will need to utilize your third-party warranty provider often. The home builder will take care of deficiencies that arise, provided that they are not a result of homeowner action/inaction. The length of time in which deficiencies are covered may vary between home builders. Again, it is wise to ask about the home builder’s internal handlings of warranty claims early on in the home building process.

Lexis Home Warranty

At Lexis, our commitment to quality continues long after we hand over the keys on possession day. Ensuring our homeowners ‘love coming home’ is more than providing a great experience during the build process. It’s about being there for you during the long haul. We are happy to offer a comprehensive warranty package from Progressive New Home Warranty, in addition to our own internal warranty program.