Everything you need to know about the new-home guarantee

There are many benefits to buying a new build, not the least of which is Quebec’s guarantee for new residential buildings, (garantie de construction résidentielle neuve), or GRC. It protects homeowners, to different degrees, during construction and in the first five years after they take possession. This guarantee gives owners peace of mind and covers them on multiple aspects, such as if defects in the design, construction or execution are found.

Here’s what you need to know about the Guarantee plan for new residential buildings.

Contents:

• What is the new residential building guarantee?
  • What does the guarantee cover?
  • What types of homes are covered?
  • Does the guarantee apply to condos and co-owned properties?
  • Duration of the guarantee
• Directory of accredited businesses
• Pre-acceptance inspection process
• Recourse in the event of a problem with a new home

What is the new residential building guarantee?

The Guarantee plan for residential buildings includes a set of legal protections put in place to ensure the quality and durability of new homes in Quebec. Falling under the Regulation respecting the guarantee plan for new residential buildings (RRGPNRB), this guarantee plan strives to protect owners from construction flaws, defects and hidden defects. It is transferrable upon the sale of the home.

The warranty applies in the event of the contractor's failure to meet his legal or contractual obligations. In a problem arises, buyers of new homes can call on the Garantie Construction Résidentielle (GCR) organization to report the defect. It gives buyers peace of mind to know they can buy a new build and benefit from legal protection if any issues arise.

What does the guarantee cover?

The residential building guarantee gives protection to the owners of a new build by covering several critical aspects:

• Construction defects
• Defects that compromise the solidity, safety or functionality of the home
• Defects affecting solidity, such as structural problems with foundations, load-bearing walls and framework

It's important to note that the residential construction guarantee does not cover damage resulting from normal wear and tear, negligence, misuse, unauthorized modifications or force majeure. Owners should read the details carefully to understand the scope of the protection they’re being offered.

What types of homes are covered?

The residential construction guarantee covers the following types of buildings:

• Single-family homes
• Divided and undivided co-ownerships (multi-family building with no more than 4 superimposed units)
• Multiplexes with 2 to 5 dwellings
• Semi-detached and row houses

It's important to note that the residential construction guarantee generally does not apply to commercial or industrial buildings, but to properties intended for residential use.

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Does the guarantee apply to condos and co-owned properties?

The residential construction guarantee applies to co-ownerships in Quebec. Whether divided or undivided co-ownerships, if they are multi-family building with no more than 4 superimposed units, they fall under the category of new residential builds covered by the guarantee.

Owners of condominiums can benefit from this warranty in the event of problems relating to the construction of private portions of the building. They must report any defects to the construction company in order to resolve the problem. If a common portion is affected, the syndicate of coproperty is obliged to take charge of the claims process.

Duration of the guarantee

• First part (1 year) – Existing defects
  • Non apparent construction defects
  • Problems with materials, equipment (artesian well, septic tank, septic field, french drain and connection to municipal services) or construction work that compromise the solidity, safety or functionality of the dwelling
• Second part (3 years) – Hidden defects
  • Construction defects, not apparent, which predate acceptance of the property and which render it unfit for its intended use or so diminish its usefulness that the buyer would not have purchased it, or would not have paid such a high price, had he or she been aware of them.
• Third part (5 years) – Major defects affecting the solidity of the work
  • Major defects that compromise the structural stability of the dwelling
  • Major problems affecting structural elements such as foundations, load-bearing walls, framing and so on

Directory of accredited businesses

The residential construction companies that are accredited with the Garantie de construction résidentielle (GCR) are all listed in the Accredited Business Directory. The organization GCR is mandated by the Régie du bâtiment du Québec (RBQ) to administer the legal guarantee for new residential buildings in the province.

GCR accreditation is an obligatory process undertaken by residential construction contractors to demonstrate their commitment to quality and to customer satisfaction. Companies that obtain this accreditation must comply with the obligations set out by the RRGPNRB.

The directory allows buyers to check whether a construction company holds GCR accreditation. This guarantees compliance with quality standards and gives homeowners an additional assurance of the contractor’s reliability—an important factor when choosing a firm to build a new home.

By consulting this directory, consumers can see information on the company's accreditation, the categories of buildings covered, the accreditation’s period of validity and other relevant details. This contributes to greater transparency and confidence in Quebec's residential construction industry.

Pre-acceptance inspection process

The process of pre-acceptance inspection, also known as the pre-delivery inspection, is a critical step. Its purpose is to check that the building complies with current standards and to identify any defects or flaws before the owners take possession of the dwelling.

Here’s how this inspection usually takes place:

1. Before the pre-acceptance inspection, the construction company contacts the owner to arrange a date. It's important to schedule this appointment well in advance.
2. A thorough visual inspection of the home is done, using a Pre-Acceptance Inspection Form. An inspector appointed by the buyer for the private portions, or by the syndicate of coproperty for the common portions, visually examines the conformity of the work.
3. Once the inspection visit is done, the results are given to the contractor. They generally have to correct the defects after the delivery of the dwelling.
4. If no major issues are detected, then the owner can go ahead and accept the dwelling. The person then agrees to take possession of the premises with or without reservations.

It’s mandatory that owners be present during the pre-acceptance inspection to ask questions and make sure that everything is in order before taking possession. Keeping written records during this step is also important in case recourse is needed later.

Recourse in the event of a problem with a new home

Homeowners have a number of recourse options in the event of a problem with a new home covered by the Quebec residential construction warranty. Homeowners must report problems to the contractor, and if they are not satisfied, complete a claim form. Mediation, a conflict resolution process designed to facilitate communication between the parties and find an amicable settlement, comes after the claim.

If mediation is unsuccessful, owners must notify the GCR within the statutory timeframe. The warranty organization may mandate an expert to inspect the reported defects. This person will determine whether the problems are covered by the warranty.

If problems are confirmed as being covered by warranty, construction companies are generally required to carry out the necessary corrective work and, if this is not done, to assume the cost of repairs. This may include repair or replacement of defective components.

The arbitration process is the mechanism provided to challenge a GCR decision when the parties appeal directly to an arbitrator or when they have not reached an agreement through negotiation or mediation. The request for arbitration must be made within 30 days of receipt by registered mail of the administrator's decision or of the mediator's notice of total or partial failure of mediation. The request for arbitration must be made within 30 days of receipt by registered mail of the administrator's decision, or of receipt of the mediator's notice of total or partial failure of mediation. As a general rule, the arbitrator's decision is final and without appeal.

It is important to keep all relevant documentation, such as the inspection report, communications with the contractor and proofs of payment. In the event of a persistent dispute, owners may also consider consulting a notary or a lawyer specializing in construction law for further legal advice.

The residential construction guarantee provides peace of mind for owners of new homes by repairing visible defects, equipment and construction flaws. It promotes an effective resolution to problems that occur after acceptance of real estate. There are also other protections available if the purchase is done off plan.

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