ECA Review Editorialist
The New Alberta Home Buyer Protection Act comes into effect November 1, 2013.
It will make it mandatory for all builders to provide a minimum one-year warranty on labour and materials, two years for plumbing and electrical systems, five years of protection from water damage and 10 years for major structural components.
At first blush this seems like an excellent idea. Too many Albertans, especially in large rapid-growth communities, have been hosed by shoddy workmanship and less-than-honourable builders.
But like so many broad-brush, knee-jerk government policies, this legislation will likely do little to improve construction practices.
Over the past number of years, the most egregious examples of bad builders and victimized purchasers have been in the condominium world. In all these high profile cases, the builders either declared bankruptcy or had already gutted the offending company of assets to start a new construction company — liability and lawsuit free!
It doesn’t take much imagination to realize the legal nightmare that is about to unfold. Is it really a builder’s problem or is it a purchaser milking the system for all it’s worth?
The government’s answer to this pending legal nightmare is to establish an Insurance Disputes Committee. Yes, yet another government-appointed arbitration committee, comprised of industry and government-friendly faces, trying to appear impartial!
The government predicts this program will add $1,700 to $2,000 or less than one per cent to the selling price of a new home. For how long, is the million dollar question? Insurance premiums and warranty costs are notorious for going only one way — up!
Unfortunately this legislation is all about “closing the barn door after the horses are gone”. A progressive government would be stopping the horses from getting out in the first place.
Rules concerning limited companies need to be changed so that legal liability cannot be avoided through bankrupting the offending company. There is a high-profile builder in Alberta today that has done just that. On last count there are hundreds of owners in nine condominium buildings on the hook for millions of dollars of repairs related solely to poor construction. They have virtually no hope of recovering costs, yet their builder, re-named and re-constituted, continues to build away.
Finally, would it not make more sense to re-establish a rigorous inspection system with enough highly qualified, well-trained and ethical inspectors to ensure home construction is done properly 100 per cent of the way?
It is a much wiser course of action to stop the problem before it becomes a problem, and eliminate loopholes for bad builders to jump through. Good builders would welcome more rigorous inspections if done on a timely, professional basis.
Todd Pawsey, Development Officer at the County of Paintearth said, “the mole hills are going to become the mountain range, thanks to this legislation.”
And unfortunately we have seen this result far too often in a province that has a propensity to pass lazy legislation rather than do the hard work of fixing or mitigating the root causes.