In the residential construction industry, there are two major categories of builders: residential builder (includes a developer and a general contractor), a person who is licensed by the Homeowner Protection Office (HPO), engages in, arranges for or manages all construction of a new home under building permits; and owner builder, an individual who is exempt from licensing, receive authorization from the HPO to build a dwelling unit for his own personal use.
What does a new home buyer need to know when encountering an owner-built home or a non-owner-built home? Only purchasing a new home built by a residential builder comes with a 2-5-10 home warranty insurance, the minimum coverage includes 2 years on labour and materials, 5 years on the building envelop, and 10 years on the structure of the home. For sure, this program is able to offer buyers the investment protection and also peace of mind.
On the contrary, an owner builder does not have to provide third-party warranty insurance for his new home. However, there are still many obligations that must be met. For instance, the owner can only build once in any 18-month period; after obtaining an occupancy permit, he has to first occupy his new home for at least one year; as to sell the new home on the open market, the owner builder should provide a potential buyer a copy of a Disclosure Notice obtained from HPO; if the age of new home is less than 10 years after first occupancy, the owner will be still personally liable for any defects in the labour, design and materials used in the home.
To view the HPO’s 2014 “Residential Construction Performance Guide”, visit the link http://www.winniewu.ca/faqs.html under “How the Updated Guide Protects New Homes”.