MANITOBA SCRAPS PROPOSED NEW HOME WARRANTY ACT – How can you protect yourself?

The New Home Warranty Act and Regulations were originally to be in force on January 1, 2017.  The PC Government delayed and eventually scrapped the implementation of the Act and Regulations.

With recent developments in rural Manitoba, there seems to be renewed interest in this topic, with advocates suggesting that there needs to be some mechanism to protect purchasers of newly built homes.  There does not appear to be any new direction on this front.

With a new Act and Regulations not likely, we offer tips to protect yourself:

1. Have the contract reviewed by your lawyer. The contract is written by and to favour the builder. Make sure that the contract includes provisions which protect your interests.
2. If you notice any discrepancies between the writing and any oral agreements you had with the builder, they should be addressed before you sign anything!
3. Make sure you understand all the time frames in the contract – including the start and finish dates, delivery dates for materials, for making changes or selections, etc. Late or incomplete work is one of the biggest issues with construction projects.
4. Make ALL your payments through your lawyer.
5. Be clear on pricing. Make sure there are no additional fees or expenses that may arise.
6. Understand exactly what materials you are buying. It is all the windows and doors, cabinets and appliances, lighting and flooring that go into that home. Make sure your contract specifies the quality and grade of these important items. Once the builder has started ordering materials, it will be too late to argue over the quality.
7. Specify the payment schedule. Define what amounts will be paid on what dates. Will the payments be made as a lump sum or in installment? Are the payments due at a set time or based on certain completion dates? Again, make ALL your payments through your lawyer.
8. Understand the dispute resolution process. Is there a mandatory arbitration clause?
9. Be clear on what the deposit is paid towards. Each builder has a different percentage, so be sure to understand what it is.  Before you agree to hand over a large sum of money to your builder, you should request that the money be placed in a trust account and that you be provided with copies of paid receipts to make sure the money is going where it is supposed to.
10. Build in mandatory inspections throughout the process.
11. Demand that funds be set aside in trust to cover incomplete work or bad workmanship even if the builder is able to obtain a certificate of occupancy. If the builder receives all the money before your list is complete, you have no leverage against getting the work corrected or completed.
12. Do your due diligence when considering a builder. Speak with previous customers and view other similar homes built by the builder for quality.
13. Demand a new home warranty and question whether a builder is registered with a home building association (ask for proof).

HOW WE CAN HELP:

We understand that these issues are very complex.  Please feel free to contact one of our lawyers for more information on new home purchases and its application to you.