BC’s 2-5-10 Home Warranty Explained: What Your New Home Is Covered For

BC’s 2-5-10 Home Warranty Explained: What Your New Home Is Covered For

Every new home built in British Columbia by a licensed residential builder comes with mandatory third-party home warranty insurance, usually called “2-5-10” coverage. It’s one of the strongest consumer protections in Canadian housing, but most homeowners only learn how it works when something goes wrong. Here’s what the coverage includes, what it doesn’t, and how to make sure a home you’re building or buying is protected.

What “2-5-10” actually means

The name comes from the three layers of coverage, each lasting a different length of time from the date the home is first occupied:

Who has to provide it

Under BC’s Homeowner Protection Act, new homes must be built by a residential builder licensed through BC Housing, and each new home must be enrolled in home warranty insurance with an approved third-party warranty provider before the building permit is issued. The warranty is provided by an insurance company, not by the builder, so the coverage stays in place even if the builder goes out of business.

The coverage also stays with the house. If the home is sold during the warranty period, the remaining coverage transfers to the new owner automatically.

What it doesn’t cover

Home warranty insurance covers defects in how the home was built, not everything that can go wrong with a house. According to BC Housing, common exclusions include:

• Normal wear and tear, and damage from acts of nature
• Landscaping, fencing, patios and site grading
• Detached structures such as sheds, carports and detached garages
• Damage caused by the owner’s failure to maintain the home
• Work done or materials supplied by the owner or others who aren’t the builder

There are also limits on the total amount covered. For a detached home, BC Housing lists the limit as the lesser of the first owner’s purchase price or $200,000; for a strata unit, the lesser of the purchase price or $100,000.

Owner-built homes are different

If a home is built by an owner-builder instead of a licensed builder, it doesn’t carry home warranty insurance. The owner-builder remains personally responsible for defects for 10 years after occupancy, and anyone buying that home later has to go to the owner-builder, not an insurance company, if problems show up. If you’re buying a newer home, check whether it was owner-built before you commit.

How to check whether a home is covered

1. Search the New Homes Registry. BC Housing’s online registry lets you look up homes built after November 19, 2007 to see who built them and whether they have home warranty insurance.
2. Ask for the warranty certificate. A covered home has a policy with a named warranty provider and a start date.
3. Check the builder’s licence. Confirm the builder is licensed with BC Housing before you sign a contract to build.

How to make a claim

If you find a defect, give written notice to both the warranty provider and the builder as soon as possible, and always before the relevant coverage period ends. Keep photos, dates and copies of all correspondence. A notice sent one day after the coverage expires can be refused, so don’t wait to see whether a problem gets worse.

Questions to ask before you build

• Is the builder licensed with BC Housing, and who is their warranty provider?
• When exactly does the coverage start, and what are the key expiry dates?
• What does the maintenance manual require, and how often?
• Which parts of the project (landscaping, a detached garage, fencing) fall outside the warranty?

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