Building a new home can be an exciting and rewarding venture. Support and protection to homeowners is offered through the government agency – BC Housing and its Licensing and Consumer Services branch. In addition, public for-profit companies provide 2/5/10 warranty for homes in BC.

The Licensing and Consumer Services (LCS) branch administers the Homeowner Protection Act and helps protect the consumer. When unethical builders and homeowners try to circumvent the law and get caught, they are subject to stiff penalties. See this link for disciplinary actions against disreputable builders and homeowners.

If a homeowner chooses to act as the contractor and build their own home, they are considered Owner Builders. As of July 4, 2016, anyone who wishes to build a new home in British Columbia as an owner builder must apply for an Owner Builder Authorization and pass an exam. The exam is designed to test an applicant’s knowledge and understanding of home building basics as well as the statutory obligations and requirements that owner builders must meet under the Homeowner Protection Act. This will help owner builders expand their knowledge, improve the quality of construction, and protect subsequent buyers of owner-built homes.

It is critical to note that it is illegal for an Owner Builder to hire another contractor to build their home using the Owner Builder exemption.

BC Housing – Licensing and Consumer Services

Formerly known as the Homeowner Protection Office (HPO), the Licensing and Consumer Services (LCS) branch of BC Housing, is the government agency responsible for licensing residential builders and administering Owner Builder Authorizations. They have the power to cancel the license of the builder and levy financial penalties. Ultimately, they protect the consumer by ensuring that new homes are covered by home warranty insurance. Wendy Acheson is Vice-President & Registrar of Licensing and Consumer Services, and also the person you will often see in the news. She is responsible for administering the Homeowner Protection Act, overseeing licensing compliance and consumer-service operations. Wendy has led important initiatives to increase the quality of residential construction and strengthen consumer protection. LCS also monitors the provision of third-party home warranty insurance.

Warranty Providers

Builders are responsible for arranging home warranty insurance through a warranty provider.
The warranty provider issues a 2/5/10 home warranty insurance policy when the home is completed or occupied and provides the following protection:
• One year on defects in materials and labour or violation of the Building Code.
• Two years on defects in materials and labour supplied for the mechanical systems, as well as for the exterior cladding, caulking, windows and doors, that may lead to detachment or material damage to the new home and violation of the Building Code.
• Five years on the building envelope includes the components that separate the indoors from the outdoors.
• Ten years for defects in materials and labour that result in the failure of a load-bearing part of the new home, and for any defect that causes structural damage.

There are four warranty providers in BC: Travelers, National, WBI and Pacific. It is illegal to build a house without registering the home with a warranty provider. Unscrupulous builders continue to ignore the laws and put at risk not only themselves but homeowners as well.

When looking for a builder, make sure they are licensed with BC Housing and one of the four warranty providers. It is illegal to build a home and not provide 2/5/10 warranty insurance.  Non-compliance with the Homeowner Protection Act and its Regulations can lead to a monetary penalty of up to $25,000 or imprisonment for a term of not more than one year, or both.

The English idiom, “A pound wise, a penny foolish” provides timely wisdom when choosing a builder. Ultimately, you get what you pay for. Happy Building.

Larry Clay
President of Clay Construction
Vice-President of GVHBA

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