Mandatory new home warranties in Alberta offer another layer of protection for homeowners making one of the biggest purchases of their lives. This extended coverage also gives you a huge advantage over the uncertainty you’ll find with resale homes. You can feel more confident going into the home buying process knowing that all builders in Alberta are required to provide a warranty for each home they build.

Ready to learn more about what this mandatory home warranty covers? We’ve compiled a list of answers to common questions about new home warranties so you know exactly what to expect.

What Law Mandates New Home Warranties in Alberta?

The New Home Buyer Protection Act, also known as the NHBPA, became law in February 2014. This act was designed to help ensure that warranty protection was available to all new home buyers. 

Some of the highlights include a minimum of 1-2-5-10 coverage, a government registry with public information that includes dates, and required proof of a warranty for builders in the province to receive permits.

The responsibility is on the builder to enroll their homes with a warranty provider and it’s important to note this coverage is attached to the property, not the homeowner. If you choose to sell your home, any existing coverage will apply for the new owner.

Which Warranty Providers Can a Home Builder Use?

The Alberta New Home Warranty Program (ANHWP) is a leading provider of this mandatory home warranty and has been protecting Alberta homeowners since 1974, well before it became mandatory.

Over 400 of the best builders in the province use the ANHWP to protect their homes and give their clients the peace of mind they deserve. This makes it easy to find a good, reputable builder who is a member and it also means you don’t have to worry about checking if you’re getting the coverage you’re entitled to.

There are five other reputable warranty providers that a builder can choose from. They include:

• Millennium Insurance Corporation
• National Home Warranty Group Inc. – Aviva Canada Inc.
• Progressive Home Warranty Ltd. – Trisura Guarantee Insurance Company
• Blanket Home Warranty Ltd. – Intact Insurance Company
• WBI Home Warranty Ltd. – Intact Insurance Company
• Travelers Insurance Company of Canada

Because these are the only six officially recognized warranty providers under Alberta’s New Home Buyer Protection Act, you can feel safe knowing they all offer the same standard, mandatory coverage and are following the rules set out for them by the province.

What is 1-2-5-10 Coverage?

This mandatory coverage includes one year for materials and labour, two years for the distribution and delivery systems, five years that include building envelope protection, and ten years to cover all major structural components. The coverage offered under these warranties has helped provide greater protection for homeowners who would like to avoid needless costs.

We’ve broken down each level of warranty coverage below so you can make sense of it all.

<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/HEUJftoAFFU” title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe>

Year 1: Material and Labour Defects

Each home warranty has different tiers of coverage. In the first year, a new home is covered in areas of materials and labor. This would be something like the paint chipping on the walls. The home warranty will cover things that are material or labor defects.

Year 2: Distribution System Protection

Your home warranty will cover all of the distribution systems in the home through the second year. These are some of the most expensive elements of owning a home.

If a plumbing system fails within the first two years, it probably means that something was not installed properly. This allows the buyer to have some financial protection in this case. In the past, home buyers who did not have a protection plan would have to spend a ton of money to fix the systems in the home.

Year 5: Building Envelope Protection

Going up to the fifth year, a home warranty will cover things that protect the home from outside elements. One of the best examples of this is the roof and windows. If these items encounter issues in the first five years, you are covered by the warranty.

Year 10: Structural Coverage

One of the best aspects of Alberta’s mandatory new home warranty is the structural coverage. Homeowners can expect to receive ten years of coverage on several things within a home.

These areas are related to the structure of the home and include the labor and materials. One of the best examples of this is the foundation. If you have any cracks in the foundation of a home, it can signal a lot of future potential issues.

It is vital to repair any structural damage as soon as possible. Working with a qualified home builder will prevent many of these issues. However, if this issue does come up within the ten-year window, you will have a protection plan to get it repaired.

Another great feature is that the warranty will pay for you to live somewhere else during the repairs. The warranty will cover $150 a day, up to $15,000, during the course of the repairs, depending on the company. This is a huge financial benefit if you do have to go through this process.

When Does Coverage Begin?

In the case of single-family homes or non-condominium multi-family homes, the date of the home’s occupation and the date an accredited agency gives permission for the home to be occupied. For single-family homes, the registration of a new title is also a factor. 

Multi-family buildings that are warrantable, common property or under a condominium corporation have coverage commence upon title transfer and an agreement for a building assessment report.

Are There Any Limits to the Warranty Coverage?

There are some limits to the total amount your home is covered. For single-family homes, the maximum coverage is the lesser of the purchase price (excluding land) and $265,000. The same can be said for non-condominium multi-family units like duplexes or townhomes with no common warrantable property. Multi-family units under a condominium plan are entitled to the lesser of the purchase price and $130,000. 

What are Some of the Enhanced Warranty Insurance Options?

You may be able to take advantage of pre-possession insurance that covers the time between a deposit and possession. Another possible option is deposit insurance which protects against builder default. 

The ANHWP, for example, has the option to extend coverage by two years for Building Envelope protection outlined in Year 5. See if the builder you want to work with chooses this type of coverage already and if not, see if they will add it to the policy for your property. You can never be too careful when it comes to something as important as your new home.

When a builder provides you with a mandatory warranty, you can rest assured knowing your home is covered and you’ll have less to worry in the years to come. This is just another reason why buying a new home in Alberta is a great idea because you’re protected from a lot of unforeseen and costly issues that pop up in older resale homes.

We hope the above information about new home warranty coverage in Alberta will help you feel better about your future home purchase. Here are some great builders in Edmonton and Calgary to look at when you’re ready to get serious about your new home options!

Originally published Jul 4, 2017; updated Jan 27, 2023

Author: Jeff S.

Proud father and husband. Loves music, Nine Inch Nails, UFC and inbound marketing.