A Quick Primer On Manitoba’s Third Party Warranty

“Would you care for extended warranty? For only 75 dollars you can protect your purchase for 3 years!” If I had a dollar for every time I heard something like that, I would be able to afford extended warranty! It’s offered on seemingly every consumer product offered these days. In fact standard warranty is an assumed practice. And yet, the consumer practice of third party warranty hasn’t found its way to the biggest investment of your life here in Manitoba.

What is third party new home warranty? Third-party new home warranty is a new construction home warranty on your home that is provided by a company outside of the building contract relationship. This means that if the home builder your hire ceases operations, your third party warranty would not become nullified. Typically the warranty will cover finish materials and labour for one year, mechanical systems for 2 years, and foundation or structural defects for 7 years. In our case, we use Progressive Home Warranty. They step in and provide a warranty package to the home owner, and monitor the steps along the way taken by the builder.

Manitoba had been expecting to enact a Home Warranty Legislation to ensure all Winnipeg Home Builders and the rest of their Manitoban counterparts would provide third-party warranty for all new homes they built. This was expected to be introduced as policy in January of 2017 as voted on by the NDP government in 2013.

An informative visual history of the home warranty act.

However, after two separate delays, one in November of 2016, and one a year later, the provincial government has now nixed that legislation. The legislation was claimed to be burdened down with regulatory nonsense, and deemed to make things too hard on the home builders.

Now there hasn’t been a lot of coverage on this issue, but I would question what burdensome obligations this act would be bogged down with. The act coupled the ability to pull permits with a prerequisite of having proof of warranty on that property. It could also have put added barriers in place to people wishing to self-build their homes.

Now there’s no argument that warranty programs can be cumbersome. They entail added inspections by the warranty provider (to ensure they are warranting proper work), a good chunk of operating cash set aside under a letter of credit, and extra paperwork in the office to register the warranty. In particular this suggested program would’ve entailed some oversight departmentally to ensure the processes were being followed and understood. So we do understand the work entailed and the costs introduced by these warranty programs.

But from a consumer point of view, the mandated warranty offers a lot of comfort. Firstly, it does the obvious job of providing peace of mind. A selling feature on cars is often the advertised warranty period. Why should the largest investment of your life be any different? The proposed Manitoba New Home Warranty Act proposed a minimum coverage of 1 year on defects in materials, labour and design, 2 years on violations of the Manitoba Building Code that constitute unreasonable health and wellness risks, defects in mechanical systems, building envelope or exterior cladding, and 7 years on any structural defects. The minimum upper limit of coverage was to be set at $100,000.

A second benefit to mandating Manitoba Home Builders to provide Third Party Warranty is that it means the builder you are choosing to build with, is serious enough about their business that they’ve committed to put aside money in a letter of credit for their insurance company. They have skin in the game to ensure that they build a home properly, and don’t require the warranty company to mediate shoddy workmanship.

We are fully in support of third party warranty, and we’ve been offering it since 2007. We haven’t had a single claim against us, but it has produced a lot of relaxed home owners in the past decade! We’re happy that the market has shifted in such a way that less regulations are required because more builders are offering the warranty regardless of provincial oversight.

In the end, it is important that the customer feels at ease with the decisions they’ve made. They need to feel comfortable and protected. We feel that warranty does a great job of offering that protection, but as always, the warranty should be your last resort. Better built homes don’t require warranty, and so by choosing simpler and better building details, you’re already ahead of the warranty game. Visit our website and make an appointment with us to see why we offer warranty, and why we doubt you’ll ever need it!

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