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New Construction | Warranty

The 2-5-10 Home Warranty, Properly Explained

Every new home built by a licensed residential builder in BC must carry this. Almost everything written about it stops at the name, which is where the misunderstandings start.

The short answer

Two years on materials and labour, five on the building envelope including water penetration, and ten on structure. Inside the two year period shorter limits apply: 12 months on non-common property, 15 months on strata common property, and 24 months only for major systems, cladding, windows, and doors.

The two year period is not two years for everything

This is the part that catches people. The headline says two years for materials and labour, and inside it sit three different limits depending on what failed and where.

Twelve months applies to detached homes and to non-common property in strata units. Fifteen months applies to common property in multi-unit strata buildings. Twenty-four months applies to the major systems, meaning electrical, plumbing, heating, ventilation and air conditioning, plus exterior cladding, windows, doors, and any defect that makes the home unfit to live in.

So a defect inside your own unit that is not a major system may be covered for twelve months, not twenty-four. Knowing which bucket something falls into before the first anniversary is worth real money.

  • → 12 months: detached homes and non-common property in strata units
  • → 15 months: common property in multi-unit strata buildings
  • → 24 months: major systems, exterior cladding, windows, doors, and anything making the home unfit to live in
  • → Building Code violations are covered where they create a health or safety risk or are likely to cause material damage

Five years on the envelope, ten on structure

The five year cover is for defects in the building envelope, including unintended water penetration that could cause damage. In this climate that is the coverage that matters most.

The ten year cover is for defects in load-bearing parts or the overall structure, including defects that make the home unfit to live in.

When the clock starts, and who it follows

For a strata unit, coverage begins at first occupancy or transfer of title, whichever comes first. For common property it is first-unit occupancy or transfer of title. For a speculative detached home, first occupancy or transfer of title.

Crucially, coverage stays with the home rather than the owner. If you buy a two year old home, you inherit whatever remains of the warranty. That is worth establishing on any home that is not brand new.

What it will pay, and what it excludes

Claims are capped. For a strata unit the limit is the lesser of the first owner's purchase price or one hundred thousand dollars. For a detached home it is the lesser of the first owner's purchase price or two hundred thousand. Common property is capped at one hundred thousand per unit or two and a half million per building.

Exclusions are permitted by the Regulation and include landscaping, site grading and surface drainage, roads and curbs, normal wear and tear, damage caused by others or by natural events, and a failure by the owner to prevent or minimise damage. Driveways are covered even though roads are not.

Your policy is a contract with the warranty provider and the exclusions in it are the ones that bind you. Read it.

Is this right for you

Works well if

  • ✓ Any purchase of a home built by a licensed residential builder in BC
  • ✓ Buying a home two to nine years old, where warranty may remain

Does not work if

  • ✕ The home is owner-built, where the owner builder carries liability instead
  • ✕ The home is in an exempt category, such as some manufactured homes
  • ✕ The problem is cosmetic, a preference, or a contractual expectation rather than a defect

Check before you offer

  • → The home and the builder on the BC Housing new homes registry
  • → The date coverage started, since that sets every deadline
  • → Your own policy document, because the exclusions in it are what bind you
  • → Which sub-limit applies to a defect before the twelve month mark passes

Read next

Checking the Builder
Checking the Builder Before You Buy

Common questions

What does the 2-5-10 warranty cover?

Two years on materials and labour, five years on the building envelope including unintended water penetration, and ten years on structural defects in load-bearing parts. These are minimum requirements under the Homeowner Protection Act, and some policies provide more.

Is everything covered for two full years?

No, and this is the most common misunderstanding. Inside the two year period, 12 months applies to non-common property in a strata unit and to detached homes, 15 months to strata common property, and 24 months only to major systems, exterior cladding, windows, doors, and defects making the home unfit to live in.

Does the warranty transfer if I buy a two year old home?

Yes. Coverage stays with the home rather than the owner, so you inherit whatever remains. Establish the date coverage started, because that sets every remaining deadline.

How much will it pay out?

For a strata unit, the lesser of the first owner's purchase price or $100,000. For a detached home, the lesser of the first owner's purchase price or $200,000. Common property is capped at $100,000 per unit or $2.5 million per building.

What is not covered?

The Regulation permits exclusions including landscaping, site grading and surface drainage, roads and curbs, normal wear and tear, damage caused by others or natural events, and failure by the owner to minimise damage. Driveways are covered even though roads are not. Cosmetic issues and contractual expectations are not construction defects.

Where these figures come from

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