The Home Owner Protection Office (HPO) defines a new home as “a building, or portion of a building, that is newly constructed or being constructed and is intended for residential occupancy, and includes…a home that is or is being substantially reconstructed.” In BC, new homes or substantially reconstructed homes require a third party new home warranty.
The HPO recently adopted new definitions affecting how renovations and heritage buildings are included or excluded from the requirements for a new home warranty.
HPO has issued clarifications to what they consider a substantial reconstruction. In a nutshell, the HPO considers a building to be substantially reconstructed when less than 25% of the original structure above grade remains, or 75% or more of the reconstructed home is new. If a building is being substantially reconstructed, then the building is considered a new home overall and a new home warranty on the complete building will likely be required.
In the case of an older home being renovated, the exterior wall assemblies, the homes’ energy use, control of air movement and vapour diffusion through the exterior walls, and glazing assemblies likely do not meet current building code requirements. If the home renovation falls under the substantial reconstruction rule, the renovated building is considered a new home and a new home warranty would likely be required.
If a new home warranty is required, the warranty provider will likely require the overall home to be upgraded to meet current building code requirements. In addition, the renovation must be carried out by a licensed HPO contractor.
Under the existing Home Owner Protection Act Regulation, a designated heritage building that is being converted from commercial to residential use is exempt from the requirements for home warranty insurance.
In the case of a designated heritage building, if the renovation is a substantial reconstruction and deemed a new home by HPO, then much of the exterior structure, roofing, claddings, glazing assemblies and below grade waterproofing would need to be upgraded to meet current building code requirements. That is detrimental because the essential fabric of the heritage component of the building will then be lost.
There are a number of scenarios possible when considering whether or not the building falls under the substantial reconstruction rule or not. HPO will make that determination.
For further information, contact the Home Owner Protection Office at www.hpo.bc.ca