Information for Owner Builders
Under the New Home Buyer Protection Act, owner builders must apply for authorization to construct their own home. This is done through the Owner Builder Application for Authorization process. If approved, the authorization will allow the owner builder to construct their own home, either with or without a warranty.
The mandatory warranty coverage required in the New Home Buyer Protection Act is designed to provide homeowners with recourse options if defects occur within their new home. Owner builder authorizations are available as an option out of respect for an individual’s right to build their own home. However, owner builder authorizations are issued with an understanding that approved owner builders, specifically those that build without warranty, cannot pass their risks onto a second homeowner. This means that if an owner builder decides to build without warranty, they cannot sell the home before the conclusion of the 10-year warranty protection period without first ensuring that warranty is in place.
If you are approved for an owner builder authorization and build without warranty you are essentially agreeing to provide warranty coverage to the next homeowner should you decide to sell the home before the 10-year protection period ends.
An individual must meet certain criteria to be eligible for an owner builder authorization. An individual must:
- Intend to reside in the home as their primary residence for at least ten (10) years;
- Be the registered owner of the property for where the home will be built as either the sole owner, or as joint tenancy, or a tenant in common (the property must be in person(s) name, not a corporation);
- The land title is "fee simple" (this is listed on the Certificate of Title);
- Intend to personally engage in, arrange for or manage all or substantially all of the construction (i.e. control, supervise, oversee of the building site, procurement of materials and the hiring, direction, scheduling and payment of tradespersons and other labourers, for all of the new home construction);
- Not have previously contravened New Home Buyer Protection Act;
- Not have provided any false or misleading information on a previous application;
- Not have been approved for a previous Owner Builder Authorization, for at least 3 years since the date of the individual’s first occupancy of the new home associated with their most recent authorization; and
- Not have been approved for a previous Owner Builder Authorization as an ordinarily resident (the place you normally resided) for at least 3 years since the date of approval.
If you do not meet the above criteria for an owner builder authorization, you may submit an application but must also attach additional information providing a rationale for why your situation should be considered for an owner builder authorization.
Corporations may not be eligible for an owner builder authorization. Corporations may have to obtain a builder licence.
- If your home will be financed before, during or after construction, we strongly suggest you check with your lender to see if they require warranty.
- As an individual, if you choose to build without warranty but decide to sell before the end of the 10-year protection period, you will need to obtain home warranty coverage before selling the home. If a warranty provider considers your request for coverage, they may:
- request detailed information about the home and the construction process,
- determine the cost of warranty coverage by using a risk assessment model, and/or
- refuse to provide new home warranty coverage.
Note: Currently, in today's market there is no insurer of last resort. There is no guarantee that you will be able to obtain warranty coverage during or after your home is constructed and lived in.
Detailed instructions on how to apply for an owner builder authorization can be found here.
An application needs to be completed if you plan to build with or without warranty.
An owner builder may choose to build with warranty. The owner builder should consult directly with the warranty providers doing business in Alberta to choose a policy for their home. Government does not regulate the costs of warranty.
There are currently seven warranty providers that operate in Alberta. You may need to contact more than one provider as not all of the companies offer coverage to owner builders.
- Millennium Insurance Corporation
- National Home Warranty Group Inc. - Aviva Canada Inc.
- Progressive Home Warranty Solutions Inc. - Aviva Canada Inc.
- Progressive Home Warranty Solutions Inc. - Echelon Insurance
- Blanket Home Warranty Ltd. - WBI Home Warranty Ltd. / Royal & Sun Alliance Insurance Company of Canada (RSA)
- The Alberta New Home Warranty Program
- Travelers Insurance Company of Canada
- WBI Home Warranty Ltd. - Royal & Sun Alliance Insurance Company of Canada (RSA)