Buying a Home in B.C.: A Consumer Protection Guide

Buying a Home in British Columbia:

A Consumer Protection Guide

Published by BC Housing

2013

BC HOUSING

BUYI NG A HOME I N B R ITISH COLUMB IA: A Consumer Protec tion G uide

1

About this Guide

This guide is designed to provide practical information to help consumers in British Columbia make

informed decisions about their home purchases.

ABOUT BC HOUSING

Through the British Columbia Housing Management Commission (BC Housing) the provincial government

works to strengthen consumer protection for buyers of new homes in British Columbia. BC Housing is

responsible for:

? licensing residential builders and building envelope renovators, and administering Owner

Builder Authorizations

? ensuring that new homes are covered by home warranty insurance

? monitoring the provision of third-party home warranty insurance, and

? carrying out research and education to benefit the residential construction industry

and consumers

BC Housing does not provide home warranty insurance, nor does it mediate or otherwise adjudicate

disputes between home buyers and builders or private warranty providers.

We welcome your questions and comments. You can reach us at:

Licensing and Consumer Services

Branch of BC Housing



Email: licensinginfo@

203 ¨C 4555 Kingsway

Burnaby, BC V5H 4T8

Telephone: 604-646-7050

Toll-free: 1-800-407-7757

Fax: 604-646-7051

ACKNOWLEDGEMENTS

BC Housing thanks the representatives of many organizations involved in the residential construction

industry in British Columbia, including warranty providers and consumer, builder and real estate

organizations, which provided valuable input in the development of this guide.

DISCLAIMER

This guide is intended to provide readers with general information only. The purchase and sale of real

estate and the condition of homes and their construction are complicated issues. Readers are urged not

to rely simply on the contents of this guide, but to consult with appropriate and reputable professionals

and construction specialists, including lawyers, notaries, accountants, architects, engineers and building

inspectors, as appropriate. The authors, contributors, funders and publishers assume no liability for the

accuracy or the statements made or for any damage, loss, injury or expense that may be incurred or

suffered as a result of the use of or reliance on this guide. The views expressed herein do not necessarily

represent those of individual contributors or BC Housing.

BC HOUSING

BUYI NG A HOME I N B R ITISH COLUMB IA: A Consumer Protec tion G uide

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Table of Contents

This guide is designed to

provide practical information

to help consumers in British

Columbia make informed

decisions about their home

purchases.

BC HOUSING

You¡¯re Buying a Home

5

Consumer Protection for Home Buyers in British Columbia

6

The Decision to Purchase

7

Home Ownership Choices

Strata Properties

New or Resale

Consumer Protection Considerations

Buying New

Custom vs. Spec Home

Pre-sales and Contract Assignments for Stratas

7

8

8

8

9

9

9

Affordability and Financing

12

Affordability Guidelines

Home Buying Costs

Down Payment

Mortgage

Closing Costs and Adjustments

Property Taxes

Strata Fees

12

12

12

12

12

13

13

Role of the Real Estate Salesperson

14

Checking Out the Builder

15

Builder Licensing Requirements

Tips for Checking Out the Builder

15

15

Checking Out the Home

17

Building Codes and Building Authorities

New Homes Registry

New Home Walk-through Inspection

Checking Out Resale Homes

Home Inspection

Warranty Insurance Claims History

Owner-built Homes and the Owner Builder Disclosure Notice

Evaluating Resale Strata Properties

Know What Information to Gather

Strata Minutes

Form B Information Certificate for Existing Strata Properties

Building Envelope Renovations

BUYI NG A HOME I N B R ITISH COLUMB IA: A Consumer Protec tion G uide

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17

18

19

19

19

20

21

21

22

22

23

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Table of Contents

Resale Homes: The Purchasing Process

25

Making an Offer

What the Offer Should Contain

Subject Clauses

Strata Subject Clauses for Resale Strata Properties

The Closing

25

25

25

25

26

Role of Lawyer or Notary Public

27

Home Warranty Insurance

28

Summary of Coverage

Buying a Home with Existing Home Warranty Insurance Coverage

Types of Protection

Mandatory Home Warranty Insurance

Strata Properties

Mobile or Manufactured Homes

What¡¯s Excluded

When 2-5-10 Coverage Begins

Documentation

Maintenance Required

If a Problem Arises

Manufacturers¡¯ Warranties

Other Types of Insurance

28

29

29

29

30

30

30

31

31

32

32

32

32

Home Buyer Checklist

34

Glossary

35

Additional Resources

Watch for these icons throughout the document:

STRATA INFORMATION

KEY POINTS

i

MORE INFORMATION

BC HOUSING

BUYI NG A HOME I N B R ITISH COLUMB IA: A Consumer Protec tion G uide

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You¡¯re Buying a Home

Whether you¡¯re purchasing a brand new home or a resale property, investing in your

first home or your next one, buying a home is a big decision. In fact, it¡¯s probably the

single largest purchase you¡¯ll ever make, so you want to make sure that you make a

well-informed decision.

It¡¯s important to be well-informed and well-prepared before you buy. Going about

the home buying process carefully, asking the right questions and getting all the

information you need can protect you as a consumer and result in a good decision for

you and your family.

This guide is designed to give you some of the information you need. It takes you through

the home buying process and explains things you need to know, suggests questions

to ask and gives information about where to get help. Although it is primarily aimed at

buyers of newly constructed homes, it will also be useful for buyers of resale homes.

HOW NEW IS ¡°NEW¡±?

This guide refers to homes at various stages of construction and sale:

This guide points you to

other resources where you

can find more information.

?

?

New home: a recently constructed home

?

Resale home: an existing home that has been previously occupied, and is being sold

to a new owner

Pre-sale home: a home that is planned or under construction, and for which a buyer

can enter into a pre-sale contract

Because this guide has a consumer protection focus, it does not attempt to cover all

aspects of home buying, such as house-hunting or financing. But it does point you to

other resources where you can find more information.

BUILDING, BUYING AND SELLING A HOME: WHO¡¯S INVOLVED IN

THE PROCESS?

As the home buyer, you¡¯re at the centre of a large number of parties, including:

?

?

?

?

?

?

?

?

?

?

?

?

developers and builders

contractors

government regulators

home warranty insurance providers

tradespeople

architects, designers and engineers

lawyers and notaries public

bankers and mortgage brokers

strata councils and strata corporations

real estate salespersons

insurance brokers, and

home inspectors.

While the responsibility for the quality of the final product rests on many shoulders, it

is up to you as the buyer to work closely with these parties to help ensure that you will

not experience a problem with your home after you move in; or if there is a problem,

ensuring that it is dealt with properly.

BC HOUSING

BUYI NG A HOME I N B R ITISH COLUMB IA: A Consumer Protec tion G uide

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