O.C. 374/2013

November 27, 2013

A.R. 211/2013

November 28, 2013


            The Lieutenant Governor in Council makes the New Home Buyer Protection (General) Regulation set out in the attached Appendix.

For Information only

Recommended by:          Minister of Municipal Affairs

Authority:                           New Home Buyer Protection Act
                                             (section 28)


 

APPENDIX

New Home Buyer Protection Act

NEW HOME BUYER PROTECTION
(GENERAL) REGULATION

Table of Contents

                1      Definitions

                2      Commencement of coverage

                3      Common property and common facilities

                4      Preparation of building assessment reports

                5      Multiple buildings and phases

                6      Distribution of building assessment reports

                7      Additional coverage

                8      Restriction of liability

                9      Additional powers and duties of Registrar

              10      Registry

              11      Information regarding residential builders and warranty providers

              12      Collection, use and disclosure of personal information

              13      Compliance officers

              14      Administrative penalties

              15      Expiry

              16      Coming into force

Definitions

1(1)  In this Regulation,

                               (a)    “Act” includes the regulations made under the statute;

                              (b)    “building code” means the Alberta Building Code 2006 declared in force by the Building Code Regulation (AR 117/2007);

                               (c)    “private sewage disposal system” means a plant for the treatment and disposal of sewage, including a septic tank and absorption field, that is not connected to a municipal sewage disposal system and is installed during the construction of a new home;

                              (d)    “professional engineer” means a person who is permitted to practise engineering under the Engineering and Geoscience Professions Act;

                               (e)    “professional technologist” means a professional technologist as defined in section 86.4(m) of the Engineering and Geoscience Professions Act;

                               (f)    “qualified person” means a professional engineer, a professional technologist or a registered architect;

                               (g)    “registered architect” means a registered architect as defined in section 1(m) of the Architects Act;

                              (h)    “statute” means the New Home Buyer Protection Act.

(2)  For the purposes of section 1(1)(m) of the statute, the following are prescribed as delivery and distribution systems:

                               (a)    private sewage disposal systems that

                                        (i)    serve a single property,

                                      (ii)    are designed to receive not more than 25 m3 of sewage each day, and

                                     (iii)    are designed to dispose of sewage either on the property that the system serves or in a holding tank;

                              (b)    all components of a delivery and distribution system in a new home that are

                                        (i)    present on the date that coverage in respect of a new home commences under a home warranty insurance contract, and

                                      (ii)    installed during construction by the builder of the new home,

                                       excluding any fixtures and appliances that are attached to a delivery and distribution system and that are subject to a manufacturer’s warranty.

(3)  For the purposes of section 1(1)(n) of the statute,

                               (a)    “consequential losses or costs” means

                                        (i)    costs of repairing a new home resulting from defects in the new home, and

                                      (ii)    reasonable living expenses incurred by the owner of a new home while a new home is uninhabitable as a result of a defect or during the rectification of a defect;

                              (b)    “defect” means any design, construction or material used in the construction of a new home that is discovered after the commencement of coverage under a home warranty insurance contract and

                                        (i)    is contrary to the building code,

                                      (ii)    requires repair or replacement due to the negligence of an owner builder or a residential builder or person for whom the owner builder or residential builder is by law responsible,

                                     (iii)    constitutes an unreasonable health or safety risk, or

                                     (iv)    has resulted in material damage to the new home.

(4)  For the purposes of section 1(1)(s) of the statute, “portion of a building” includes retaining walls which have a structural function in supporting the building.

(5)  For the purposes of section 1(1)(s)(ii) of the statute, “common facilities” means

                               (a)    property managed by a condominium corporation pursuant to its bylaws, and

                              (b)    a unit in a building described in a condominium plan, or any portion of that unit that includes all or part of one or more of

                                        (i)    the building envelope,

                                      (ii)    a delivery and distribution system that serves two or more units,

                                     (iii)    a load bearing part,

                                     (iv)    any common property as defined in section 14(1)(a) of the Condominium Property Act, and

                                       (v)    any area subject to an easement in favour of another unit,

                                       whether or not that unit or any portion of that unit is intended for residential occupancy.

(6)  For the purposes of sections 1(1)(y), 3(3)(b) and (8)(b) of the statute and sections 2(4), 4(2)(d) and (4) and 11(2)(i)(i) of this Regulation, “transfer of title” means a transfer of title in an arm’s length transaction.

(7)  For the purposes of section 1(1)(z) of the statute, a building where after a change, alteration or repair to the building, at least 75% of the enclosed square footage of the building above the foundation at the completion of the change, alteration or repair is new, is prescribed to be a reconstruction.

(8)  For greater certainty, a change, addition, alteration or repair to a building’s surfaces, fixtures or decorations is not a reconstruction for the purposes of the Act.

(9)  For the purposes of sections 3(6)(d) and 4(2)(d) of the statute, “structural defects” means

                               (a)    any defect in materials, labour and design that results in the failure of a load‑bearing part of the new home, and

                              (b)    any defect that causes structural damage that materially and adversely affects the use of the new home for residential occupancy.

(10)  Words and expressions used in sections 2 to 6 and not defined in section 1 of the statute or this section have the same meanings as may be assigned to them in or under the Condominium Property Act.

Commencement of coverage

2(1)  Despite section 3(3) of the statute, 

                               (a)    for a new home constructed by a residential builder or an owner builder on land owned by the owner or the owner builder prior to permit issuance, coverage under a home warranty insurance contract for the defects identified in section 3(6) of the statute begins on the earlier of

                                        (i)    the date the new home is first occupied, and

                                      (ii)    the date an accredited agency, accredited municipality or accredited regional services commission grants permission to occupy the new home,

                                  and

                              (b)    for a new home constructed by a residential builder on land not owned by the owner and where there is no transfer of title to the land by the residential builder to the owner, coverage under a home warranty insurance contract for the defects identified in section 3(6) of the statute begins on the earlier of

                                        (i)    the date the new home is first occupied, and

                                      (ii)    the date an accredited agency, accredited municipality or accredited regional services commission grants permission to occupy the new home.

(2)  Despite section 3(3) and (4) of the statute, coverage under a home warranty insurance contract for the defects identified in section 3(6) of the statute for the common property and common facilities of a condominium corporation begins when

                               (a)    the title to an inhabitable unit in a building or building in a phase of development of a condominium is transferred from a residential builder to a purchaser of a unit in an arm’s length transaction, and

                              (b)    the residential builder has agreed with a qualified person to have the qualified person prepare a building assessment report for the building or for a phase of development within 180 days of the transfer of title described in clause (a).

(3)  Despite section 1(1)(y) of the statute, where subsection (1) or (2) applies,

                               (a)    the purchase period begins when coverage under subsection (1) or (2) begins, and

                              (b)    the purchase period applies to the common facilities of a condominium corporation.

(4)  With respect to the common property or common facilities of a condominium corporation, for the purposes of section 4(2) of the statute, “the date the new home is first occupied” means 180 days after the first transfer of title to a unit in the condominium building or phase of development if the condominium is developed in phases.

Common property and common facilities

3(1)   If a new home is included in a condominium plan, a home warranty insurance contract must provide coverage for any common property and any common facilities located in the building in which the new home is located.

(2)  A home warranty insurance contract referred to in subsection (1) must name the condominium corporation as the insured.

Preparation of building assessment reports

4(1)  A residential builder must arrange for a qualified person to prepare a building assessment report for the common property and common facilities of a condominium building.

(2)  A building assessment report must contain the following:

                               (a)    the identification, location and description of

                                        (i)    each delivery and distribution system in the building,

                                      (ii)    any mechanical system in the building,

                                     (iii)    the building envelope,

                                     (iv)    the surface water drainage system around the building, and

                                       (v)    the load-bearing parts in the building as the building was built;

                              (b)    a notation of any differences in any of the items in clause (a) from the original design plans;

                               (c)    the identification of any defects or deficiencies in or damage to the building resulting from any defect or deficiency in each delivery and distribution system, the building envelope and any mechanical systems, and of the load-bearing parts in the building;

                              (d)    a report on an inspection of the common property, if any, and common facilities, if any, after the first transfer of title to a unit in the building;

                               (e)    a report of a survey of any owners occupying the building or phase of development at the time of the inspection of the building of any observed defects or deficiencies in or damage to the building resulting from any defect or deficiency in

                                        (i)    any delivery and distribution system,

                                      (ii)    the building envelope, or

                                     (iii)    the load-bearing parts in the building.

(3)  For greater certainty, subsection (2)(a) requires descriptions of every existing

                               (a)    delivery and distribution system and mechanical system that serve two or more units,

                              (b)    roofing and sub-roof installation, including water and vapour control systems, insulation and venting for attic space and soffits, and

                               (c)    water control system, including

                                        (i)    eavestroughing,

                                      (ii)    cladding components,

                                     (iii)    balcony membranes and sealants,

                                     (iv)    grade and landscaping drainage courses,

                                       (v)    weeping tile,

                                     (vi)    foundation membranes and sealants, and

                                    (vii)    parkade membranes and sealants.

(4)  A building assessment report must be prepared within 180 days of the first transfer of title to a unit in the condominium building or in a phase of development.

(5)  The Registrar may, on application by a residential builder, exempt the residential builder from the requirements of subsection (1).

(6)  Subsection (5) applies where there is no delivery and distribution system or mechanical system that serves two or more units in or for a condominium building.

(7)  The Registrar may impose terms and conditions on any exemption granted under subsection (5), including

                               (a)    that a specific individual other than a qualified person prepare the building assessment report, and

                              (b)    that the Registrar may require an applicant under subsection (5) provide the Registrar with any information required to evaluate the application, including

                                        (i)    whether the building satisfies subsection (6), and

                                      (ii)    respecting the competency of the individual who is proposed to prepare the building assessment report.

(8)  A decision of the Registrar under subsection (5) or (7) is final and may not be appealed to the Board.

Multiple buildings and phases

5(1)  If a condominium is developed in phases, a separate building assessment report must be prepared for each building in each phase of development as set out in the phased development disclosure statement.

(2)  For greater certainty, if a building or land that is subject to a condominium plan or a proposed condominium plan is developed in phases, the purchase period for the common property and common facilities of the condominium corporation applies only to the common property and common facilities that are completed in a phase as set out in the phased development disclosure statement.

Distribution of building assessment reports

6(1)  When a building assessment report is prepared, the person who prepared the building assessment report shall submit the building assessment report to the condominium corporation and to the warranty provider who issued the home warranty insurance contract in respect of the condominium.

(2)  Within one week of receiving the building assessment report, the condominium corporation must serve any owner, purchaser or mortgagee of a unit in the condominium building or in the phase of development of the condominium with notice that the building assessment report has been prepared.

(3)  On request of the owner, purchaser or mortgagee, the condominium corporation must give the owner, purchaser or mortgagee a copy of the building assessment report within 10 days of the request.

Additional coverage

7   For the purposes of section 3(7)(a) of the statute, a warranty provider must offer an option to purchase at least 2 years of additional coverage for defects in the building envelope.

Restriction of liability

8   For the purposes of section 4(2) of the statute, a residential builder or an owner builder of a new home is not deemed to have agreed that the new home is free from any defect that may be excluded from coverage under the Insurance Act by a warranty provider from a home warranty insurance contract.

Additional powers and duties of Registrar

9(1)  In addition to the powers and duties set out in the statute, the Registrar

                               (a)    shall keep records, including decisions and orders made by the Registrar and by the Board,

                              (b)    may, on application by a permit issuer or an applicant for a permit, determine whether a building or a portion of a building or a proposed building or portion of a proposed building is a new home to which the Act applies or is otherwise exempt from the application of the Act,

                               (c)    may, subject to subsection (2), delegate any power or duty conferred or imposed on the Registrar by the Act to one or more employees of the Government of Alberta,

                              (d)    may, on application by a residential builder or owner of a building or a proposed building that is subject to an exemption under the Act, provide notice that a building or proposed building is exempt from the application of the Act, and

                               (e)    may issue guidelines and interpretation bulletins respecting the interpretation or application of the Act.

(2)  The Registrar may delegate the power to impose administrative penalties under subsection (1)(c) only to a person to whom the Registrar has delegated the Registrar’s powers and duties as an acting Registrar.

(3)  The Registrar shall give notice of a decision under subsection (1)(b) and (d) to the permit issuer and the applicant for a permit, and mail a copy to the registered owner of the new home or the land where the new home is or is proposed to be located.

(4)  The decision of the Registrar under subsection (1)(b) and (d) may be appealed to the Board.

Registry

10(1)  In addition to the information identified in section 9 of the statute, the registry may contain

                               (a)    any information received by the Registrar in the application process,

                              (b)    the application status in respect of a new home, and

                               (c)    the cessation of coverage for any reason of a new home under a home warranty insurance contract.

(2)  The online registry referred to in section 9(2) of the statute may contain information respecting a new home, including

                               (a)    contact information for the builder of the new home, including the name of the primary contact where the builder is not an individual, and the address of the builder,

                              (b)    whether the new home was built by an owner builder,

                               (c)    the location of the new home,

                              (d)    whether there is coverage under a home warranty insurance contract in respect of the new home,

                               (e)    the name and contact information for the warranty provider, if any, in respect of the new home,

                               (f)    whether there is additional coverage for defects in the building envelope under a home warranty insurance contract in respect of the new home, and

                               (g)    the commencement date of coverage under a home warranty insurance contract, if any, for the new home.

(3)  The online registry referred to in section 9(2) of the statute may also contain information respecting

                               (a)    details of any administrative penalties imposed under the Act,

                              (b)    compliance orders issued under the Act,

                               (c)    offences committed under the Act,

                              (d)    decisions and orders issued by the Registrar or the Board under the Act, and

                               (e)    other notices issued under the Act.

Information regarding residential builders and warranty providers

11(1)  A residential builder must provide the following information to the Registrar concerning the residential builder:

                               (a)    company or business name;

                              (b)    business telephone number;

                               (c)    business facsimile number;

                              (d)    business address;

                               (e)    mailing address, if different from the business address;

                               (f)    the name, telephone numbers and e‑mail address of a primary contact;

                               (g)    the name, telephone number and e‑mail address of any registered directors and officers.

(2)  A residential builder must provide the following information to the Registrar in respect of a new home or proposed new home:

                               (a)    the location of the new home;

                              (b)    whether the new home is a single detached residence, duplex or part of a multiple family dwelling;

                               (c)    if the new home is a reconstruction;

                              (d)    whether there is coverage under a home warranty insurance contract in respect of the new home or whether it was built pursuant to an exemption under the Act;

                               (e)    the name and contact information for the warranty provider, if any, in respect of the new home;

                               (f)    whether there is additional coverage for defects in the building envelope under a home warranty insurance contract, if any, in respect of the new home;

                               (g)    the commencement date of coverage under a home warranty insurance contract, if any, for the new home;

                              (h)    the date the new home is first occupied;

                               (i)    for condominium buildings,

                                        (i)    the date of the first transfer of title to a unit in each building in each phase of development,

                                      (ii)    the date on which the residential builder agreed with a qualified person to have the qualified person prepare a building assessment report, and

                                     (iii)    the date when the building assessment report was prepared.

(3)  A warranty provider must provide the following information to the Registrar:

                               (a)    the policy number for a new home or proposed new home;

                              (b)    if the coverage for a new home or proposed new home has ceased for any reason;

                               (c)    if there is additional coverage for defects in the building envelope;

                              (d)    information concerning a residential builder.

(4)  A warranty provider who provides information to the Registrar on behalf of a residential builder must provide all information required under subsections (1) and (2).

(5)  A warranty provider must, on request by the Registrar, provide statistical information to the Registrar regarding claims.

Collection, use and disclosure of personal information

12(1)  The Registrar shall maintain records with respect to

                               (a)    the data included in the registry, and

                              (b)    offences committed, compliance orders issued, administrative penalties imposed and amounts collected or owing under the Act.

(2)  The Registrar may

                               (a)    for the purposes of assisting the public, provide information to the public respecting the personal information of residential builders and warranty providers, and

                              (b)    provide information to the public about residential builders that are corporations, their directors, officers and agents and warranty providers regarding

                                        (i)    contraventions of or offences committed under the Act, and

                                      (ii)    compliance orders issued, administrative penalties imposed and penalties assessed under the Act.

Compliance officers

13   In addition to the powers and duties set out in the statute, a compliance officer

                               (a)    may only enter a place occupied as a private dwelling place with the consent of the occupant,

                              (b)    may be accompanied by any person or with any thing that the compliance officer considers would be of assistance, and

                               (c)    shall obtain the consent of the owner of a new home or of a private dwelling place or a warrant before entering any business premises attached to or forming part of a new home or of a private dwelling place.

Administrative penalties

14(1)  The Registrar may impose an administrative penalty of between $250 and $10 000 for

                               (a)    a single contravention of any of the following provisions of the statute:

                                        (i)    section 3(1);

                                      (ii)    section 3(2);

                                     (iii)    section 11(2);

                                     (iv)    section 24(1);

                                       (v)    section 24(2),

                              (b)    failure to comply with a compliance order, or

                               (c)    failure to comply with a term or condition of an authorization.

(2)  The Registrar may impose a maximum penalty of $1000 per day for continuing or repeated contraventions of the statute referred to in subsection (1)(a).

(3)  In imposing an administrative penalty, the Registrar may consider the following factors:

                               (a)    previous enforcement actions under the Act for contraventions of a similar nature by the person or its directors or officers;

                              (b)    the severity and extent of the contravention;

                               (c)    the extent of the harm caused by the contravention or the degree of risk of harm;

                              (d)    the degree of wilfulness or negligence in the contravention;

                               (e)    whether the contravention was repeated or continuing and, if so, the length of time during which it continued or the number of times it was repeated;

                               (f)    any economic benefit derived by the person, or a person who is not at arm’s length from the person, from the contravention;

                               (g)    whether there was any attempt by the person to remedy the contravention;

                              (h)    whether or not the person or the person’s directors or officers who receives the notice of administrative penalty has a history of non‑compliance;

                               (i)    any other factors that, in the opinion of the Registrar, are relevant.

(4)  In addition to the information set out in section 15(5) of the statute, a notice of administrative penalty must contain information on how to appeal the administrative penalty, including that the appeal must be filed within one month in writing.

Expiry

15   For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on February 1, 2019.

Coming into force

16   This Regulation comes into force on the coming into force of section 28(1) of the New Home Buyer Protection Act.