Tuesday, May 03, 2005
Homeowner Protection Act: if you build it, you are exempt.
I have had a very interesting conversation last week with a builder client of mine, which has spurred this post of interest to those readers who are involved into construction in British Columbia.
Not every new home in British Columbia must be built by a licensed builder or have third party warranty insurance. Under the Homeowner Protection Act, owner-builders are not required to be licensed or obtain home warranty insurance. Owner-builders are defined as people who build a single detached dwelling for their own personal use no more than once in any eighteen (18) month period. All persons ordinarily residing in the same dwelling who are also registered on title are deemed to be the same owner-builder. Thus the owner-builder cannot build a second dwelling in the same eighteen-month period and claim that, for instance, the wife built it - as this client of mine seemed to be suggesting. Only one owner-builder exemption is allowed per household in the aforesaid time period.
An owner-builder must comply with the ten (10) year statutory protection provisions of the Homeowner Protection Act. Owner-builders who sell their homes within ten years of building could face legal action and personal liability to subsequent purchasers. They must ensure the home is built with good quality material and constructed with ordinary (not special) competence, skill and care. To meet the legislative criteria, owner-builders must build or directly manage the construction of the new home. All others involved in performing a manager or builder function must be licensed residential builders, otherwise the home is not considered to be owner-built. Hence the brother of my client who is not on title and will not live in the dwelling does not qualify for the exemption and must be licensed as well.
Owner-builders who sell their home within ten years of occupancy are required to provide the purchaser with a copy of the Owner-Builder Declaration and Disclosure notice indicating that the home is not built by a licensed builder and that it does not have a third party warranty. The statutory protection provisions of the Homeowner Protection Act protect original and subsequent purchasers of owner-built homes. Any action commenced by a buyer under this section of the legislation must be commenced within ten years of occupancy.
I am sure my client, who has the URL of this blog, will not be especially enthused in reading this post but, as the saying goes, prevention is better than sorry.
Luigi Frascati
Real Estate Chronicle
