2-5-10 Warranty: What is Included in New Home Insurance?
Homes built by Licensed Residential Builders in British Columbia are covered by mandatory, third-party 2-5-10 Warranty. What is included? The most straightforward answer to this question is a direct quote from the Homeowner Protection Office’s website:
“Homes built by Licensed Residential Builders are covered by mandatory, third-party home warranty insurance. As a minimum, this coverage includes 2 years on labour and materials (some limits apply), 5 years on the building envelope and 10 years on structure. It’s the strongest construction defect insurance in Canada.” A 2-5-10 Warranty is the standard, however, some homes have new home insurance that exceeds this minimum requirement. The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.
Strata-titled homes have two policies of home warranty insurance, one on the home and another on the common property. When the coverage of a new strata-titled home commences, it is possible that the coverage on the related common property has already commenced or expired. Coverage on the common property of strata-titled buildings starts when the first unit in the building is occupied or sold. It is always best to check the current status of possible building warranties with a Condo Expert!
It’s worth noting that between reviewing the Property Disclosure Statement, the 2-5-10 warranty (for newer buildings), and a Buyer’s condition to review all strata documents, a buyer should be well informed and well protected when it comes to time to remove their conditions on an offer.
To find out more, contact us today!