Information for Owner Builders
Under the New Home Buyer Protection Act, owner builders must apply for authorization to construct their own home. This is done through the Owner Builder Application for Authorization process. If approved, the authorization will allow the owner builder to construct their own home, whether they choose to build with or without a warranty.
The mandatory warranty coverage required in the New Home Buyer Protection Act is designed to provide homeowners with recourse options if defects occur within their new home. Owner builder authorizations are available as an option out of respect for an individual’s right to build their own home. However, owner builder authorizations are issued with an understanding that approved owner builders, specifically those that build without warranty, cannot pass their risks onto a second homeowner. This means that if an owner builder decides to build without warranty, they cannot sell the home before the conclusion of the ten-year warranty protection period without first ensuring that warranty is in place.
If you are approved for an owner builder authorization and build without warranty you are essentially agreeing to provide warranty coverage to the next homeowner should you decide to sell the home before the 10-year protection period ends.
An individual must meet certain criteria to be eligible for an owner builder authorization. An individual must:
- intend to reside in the new home for 10 years;
- be the registered owner of the property where the home will be built;
- intend to personally engage in, arrange for or manage all or substantially all of the new home's construction;
- the land title is "fee simple" and is registered to an individual(s) in Joint Tenancy (this is listed on the Certificate of Title);
- not have contravened the Act;
- not have received an owner builder authorization in the past three years; and
- not have resided in a new home for which another individual was issues and authorization in the past 3 years.
If you do not meet the above criteria for an owner builder authorization, you may submit an application but must also attach additional information providing a rationale for why your situation should be considered for an owner builder authorization.
Corporations may not be eligible for an owner builder authorization. Corporations may have to obtain a builder licence.
- If your home will be funded before, during or after construction, we strongly suggest you check with your lender to see if they require warranty.
- As an owner builder, if you choose to build without warranty but decide to sell before the end of the protection period, you will need to obtain home warranty coverage before selling the home. If a warranty provider considers your request for coverage, they may:
- request detailed information about the home and the construction process,
- determine the cost of warranty coverage by using a risk assessment model, and/or
- refuse to provide new home warranty coverage.
Note: currently, in today's market there is no insurer of last resort. There is no guarantee that you will be able to obtain warranty coverage during or after your home is constructied and lived in.
Detailed instructions on how to apply for an owner builder authorization can be found here.
An application needs to be completed if you plan to build with or without warranty.
An owner builder may choose to build with warranty. The owner builder should consult directly with the warranty providers doing business in Alberta to choose a policy for their home. Government does not regulate the costs of warranty.
There are currently seven warranty providers that operate in Alberta. You may need to contact more than one provider as not all of the companies offer coverage to owner builders.
- National Home Warranty Group Inc. - Aviva Canada Inc.
- Progressive Home Warranty Solutions Inc. - Aviva Canada Inc.
- Progressive Home Warranty Solutions Inc. - Echelon Insurance
- Millennium Insurance Corporation
- Blanket Home Warranty Ltd. - WBI Home Warranty Ltd. / Royal & Sun Alliance Insurance Company of Canada (RSA)
- The Alberta New Home Warranty Program
- Travelers Insurance Company of Canada
- WBI Home Warranty Ltd. - Royal & Sun Alliance Insurance Company of Canada (RSA)