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Professional Standards Manual

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7. New Construction

(j) Homeowner Protection Act Matters - View Entire Section

(V) New Home Warranty - View Subsection
(2) Limits on Coverage

Coverage on claims is as follows:

  • Fee simple (primarily detached dwelling units):
    • The lesser of the first owner’s purchase price or $200,000.
  • Strata homes:
    • Strata unit: lesser of the first owner’s purchase price or $100,000.
    • Common property: the lesser of $100,000 X the number of dwelling units in the building or $2.5 million per building.

The following are suggested clauses for use with respect to new-construction warranties where the seller is not an owner-builder:

Licensed Builder and Warranty Insurance Clauses

Subject to the Buyer confirming on or before (date) that the Seller is duly licensed pursuant to the Homeowner Protection Act and that the mandatory warranty insurance pursuant to that Act is in place.

This condition is for the sole benefit of the Buyer.

OR

The Seller represents and warrants that the Seller is duly licensed pursuant to the Homeowner Protection Act and that the mandatory warranty insurance pursuant to that Act is in place.

The Seller will provide to the Buyer on or before (date) all details of the warranty insurance coverage pursuant to the Homeowner Protection Act.