INDUSTRY NEWS I Developers get another source of mandatory coverage
Sun
VANCOUVER SUN/FILES Buyers can have confidence in new condominium residences because they’re covered by the province’s home protection plan. Over the last six years, 100,000 new homes with warranty insurance have been brought to market.
An important arrow in the marketing quiver used by the development industry in B.C. to persuade new-home buyers that the leaky condo crisis was a yesteryear public tragedy, the home-warranty plan now has another insurance-provider.
Lombard General Insurance is the company’s name. Already in business in the province, either directly or through brokers, are St. Paul‘s Guarantee; National Home; and Willis.
The overseer of the warranty scheme is Ken Cameron, in his capacity of chief operating officer of B.C.’s Home Protection Plan.
“We’re working quite hard in an advocacy capacity to make sure those who do provide warranty insurance continue,” Cameron reports, in response to the latest news involving his agency.
”It’s important because it means there’s someone behind the house even if the builder is gone it is still backed by an insurance company. People can have confidence in the housing industry.”
Cameron’s agency was created in 1998 under the Home Owners Protection Act. The legislation was a response from government to a recommendation from former premier Dave Barrett, in his capacity as sole commissioner examining the leaky condo crisis in B.C. at the time.
Besides managing the home warranty system, Cameron’s agency extends financial assistance to owners of leaky condominiums and licences new-home builders.
In the last six years, 100,000 new residences have been brought to market with warranty insurance attached. It’s the law in B.C.
(Single-family residences built by their owners are exempt from the warranty-insurance requirement. About 3,000 of these homes are built annually, Cameron reports.)
”After the leaky condo crisis consumer confidence in the industry was in the tank. Now the industry is thriving. It’s an economic leader in the province. We’ve been able to rehabilitate the reputation of wood frame construction and that’s important for B.C.,” Cameron says.
The most common warranty insurance is known as 2/5/10, after its lengths in years of coverage — two on labour and materials, five on the building envelope and 10 on structural defects.
But Cameron notes some developers are going beyond 2/5/10 with “amazing customer- service programs.”
Residences in leaky buildings cost an average of $25,000 to $30,000 to repair, says Cameron. Some in concrete buildings, however, cost $60,000 to $70,000 to repair.
About 40,000 owners of 65,000 homes have received help from his office. Most of the $460 million in assistance has been in the form of loans.
Seventy-five per cent of the units affected have recovered 100 per cent of their value. A lot of units have recovered and paid off their loans,” he says. “It’s a case of government providing targeted and limited intervention to help people recover from the problem and move on with their lives.”
Cameron also reports his agency is now seeing more concrete residences with reports of leaks but “the cost of repairing those units is more and it’s going up. It’s well above $50,000.”
Asked how many units would be affected Cameron says he didn’t know the exact number but expects it would be “in the hundreds.”
He advises home-buyers to engage in deep due-diligence when they’re looking at a residence in a building constructed before 1998 and after the middle of the 1980s.
He recommends reviewing the strata minutes and engineering reports and asking, if repairs have been done, whether they were done by a licensed builder.
© The Vancouver Sun 2005