AB-2025-06502 - Exploring Mediation Options for New Home Warranty Claim Disputes

In Alberta, the Residential Protection Program (RPP) licenses residential builders and makes sure new homes have warranty coverage. The program works under the authority of the New Home Buyer Protection Act (NHBPA), which applies to new homes built after February 2014 and to residential builders licensed after November 2017.

Mandatory new home warranty is delivered by private warranty providers backed by insurers. Home warranty must provide the following minimum coverage starting on the earliest of the dates the home is completed or occupied, or the title is transferred: -materials and labour defects for a period of at least one year; -materials and labour defects for delivery and distribution systems for a period of at least 2 years; -Building envelope defects for a period of at least 5 years; and -Structural defects for a period of at least 10 years.

The NHBPA establishes that, when a homeowner discovers a defect in their home during the warranty period, they can file a warranty claim through their warranty provider. The warranty provider assesses the claim to determine if they will accept it.

Examples of types of claim disputes include coverage terms, establishing commencement and/or occupancy dates, and application of defect definition. If the warranty provider does not accept the claim and the homeowner disagrees with this assessment, the home owner can attempt to resolve the dispute by using the adjuster or the insurer’s complaint liaison officer or ombudsperson; using the warranty provider’s mediation option, if offered by their warranty provider; accessing an umpire for specific matters outlined under section 519 of the Insurance Act; accessing the General Insurance OmbudService mediation services; or litigation.

While some mediation options for resolving New Home Warranty Claim disputes currently exist, none require participation by both parties once the process has been initiated, nor do they necessarily include a neutral mediator with technical expertise in the home building sector.

As a result of the New Home Buyer Protections Review, the Province is exploring regulation amendments that would add a professional mediation process using qualified mediators with technical expertise in the home building sector, when a party chooses to pursue dispute resolution via an independent process. In addition, under this new option for mediation, once a request for mediation has been initiated by one party, the other party would be required to participate.

An organization designated by the Minister of Municipal Affairs could be engaged as a Mediation Coordinator for disputes involving New Home Warranty Claims that fall within the scope of the New Home Buyer Protection Act.

Mediation by a neutral party with technical expertise in the home building sector would be a new alternative for dispute resolution under the NHBPA; therefore, potential service volumes are not yet known.

The objective of this RFI is to collect information about mediation services that could be utilized as an alternate option to resolve New Home Warranty Claim disputes involving a homeowner and a warranty provider.

These mediation services are required to be provided across Alberta and must include procedures for screening, initiating, conducting, and concluding mediation requests, and ensure that mediators are qualified and trained, including technical expertise in home building sector.