Enhance the standard of building in Alberta Improve consumer protection and recourse options

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2 Intention of NHBPA Enhance the standard of building in Alberta Improve consumer protection and recourse options

3 Relevant Legislation New Home Buyer Protection Act Came into force February 1, 2014 New Home Buyer Protection General Regulation New Home Buyer Protection Ministerial Regulation Amendment to Permit Regulation (SCA) Insurance Act Warranty contracts are contracts of insurance governed by the Insurance Act. Dispute resolution process will flow out of the Insurance Act and regulations. Home Warranty Insurance Regulation

4 Required Coverage Mandatory Minimum Coverage: 1 year on labour and materials, 2 years for defects in labour and materials related to delivery and distribution systems, 5 years on building envelope, with requirement to offer additional 2 years, and 10 years on major structural components.

5 New Home Buyer Protection Act Applies to all new residential construction built under a permit applied for after the Act comes into force. Includes houses, condominiums, recreational properties (cottages and cabins), and modular and manufactured homes. Includes major reconstruction, depending on percentage of rebuilt square footage.

6 Owner Builders May apply for an Authorization to build a home without warranty. Must be building their own home and intend to live in it for 10 years. Can only apply once every 3 years. If an Authorization is in place, the home may not be sold without warranty for the 10-year Protection Period. Remaining warranty must be purchased

7 Purpose Built Rental Units must be held under the same legal title or multiple titles held by one person. Available on any multi-family property. Exemption must be registered with the NHBPO and in the Registry. Rental ownership model must be maintained for 10 years. If converted to condos, warranty must be obtained.

8 Building Assessment Report Purpose of the BAR is to provide the condominium corporation board of directors with a detailed assessment of the overall condition of all common property in the condominium, including individual units intended for common use. Identify any defects at the time of the completion of the BAR. Support submission of warranty claims.

9 Role of NHBPO Provide support to builders, warranty providers, and permit issuers. Process registrations and authorizations efficiently so that permits can be issued in a timely manner. Provide interpretive support for the legislation, especially for reconstructions. Ensure compliance with the Act.

10 Registrar and Compliance Officers The Registrar establishes a publicly accessible new home registry. Sets the registration fee ($95) and fee for application for Owner Builder Authorization ($750). Compliance Officers (COs) investigate compliance with the NHBPA CO's Will not perform technical inspection or otherwise duplicate the role of Safety Code Officers Administrative penalties of up to $100,000 can be enforced. Offenses under the Act can result in a charge of up to $100,000 for first offense and $500,000 for subsequent offenses.

11 Role of Builders and Warranty Providers Obtain and offer warranty coverage meeting the minimum requirements of the NHBPA on all new residential construction. Enter all new residential construction into the Public Registry of the NHBPS. Ensure that the data in the Public Registry is accurate and up-to-date. Provide proof of warranty coverage to permit issuers on request Warranty providers use the NHBPS to validate builders and confirm warranty coverage

12 Role of Permit Issuers Issue building permits for new home construction only when warranty or exemption/authorization is in place. Verify that warranty coverage or an exemption/authorization is in place. Supported by Public Registry

13 Supporting Deliverables Regulations New Home Buyer Protection Act Insurance Act Workmanship & Materials Performance Guide for Residential Construction in Alberta Online New Home Registry System Public Education Programs

14 Performance Guide Performance Guide Working Group includes representatives from government, home warranty and construction industry representatives. Standardized catalog of defects to be used by all warranty providers and builders. Defect description, acceptable performance, applicable coverage, expected action, et al. Anticipated release end of July.

15 New Home Registry Publicly accessible tools for viewing new home registration entries (read-only). Used by permit issuers to verify warranty/authorization status. Secure data management tools for builders, warranty providers, and New Home Buyer Protection Office. Supports manual entry of data by builders and batch upload of data by warranty providers.

16 New Home Registry

17 Registrar Registrations are routed to the NHBPO for approval after the warranty provider has confirmed coverage. 1% of all registrations are manually reviewed for quality assurance. Registrations rejected by the NHBPO are routed back to the builder for review.

18 So far Over 11,000 residential units currently registered in the system. 205 Owner Builder Authorizations issued. Estimated that 86% of builders registered as users in the system before February 1, 2014.

19 Public Education Educating the public is critical to the success of the New Home Buyer Protection program. Education and awareness campaigns for the program began in January. Educational and information documents can be found on the Municipal Affairs website. Registrar s bulletins NHBPS documentation Forms and applications

20 Registrar Bulletins Provide interpretive clarity that considers the full scope of statutory requirements and intent of legislation Issued by the Registrar Manufactured Homes for Residential Use Lot Block and Plan Requirements Delivery and Distribution Systems Private Sewage Disposal Systems Reconstruction

21 Under Development NHBPO to provide further direction on issues such as: Commencement Dates Exempted Residential Qualifications for preparing Building Assessment Report Rental Exemptions

22 Compliance Phase 1 Current focus on front end compliance Work with municipalities and permit issuers, owners, builders and warranty providers. Ensuring interpretation is clear and applying the legislation to unique scenarios. Public Presentations Addressing Owner builders

23 Compliance Phase 2 1. Field work for owner builder compliance Site visits Responding to information reported Monitor database to establish trends, areas for follow up 2. Rental exemptions - filing of condo papers etc 3. Public awareness and education. Responding to public inquiries, claims inquiries Monitor dispute resolution 4. Monitoring the desired effect of the legislation Adjust if needed

24 New Home Buyer Protection Board New Home Buyer Protection Board - NHBPB Representatives from varied relevant industry sectors and municipal governance - with board experience. What can be appealed? Decisions regarding Owner Builder authorizations Compliance Orders Administrative Penalties How to appeal? Process and forms on Municipal Affairs site $250 fee, refunded if the appeal is successful.

25 Web Resources NHBPO and Alberta Municipal Affairs NHBPB _buyer_protection_board.cfm

26 Contact Information