THE RENEWAL OF TRUST IN
RESIDENTIAL CONSTRUCTION
Commission of Inquiry into the Quality of
Condominium Construction in British Columbia
Submitted to the Lieutenant-Governor in Council
Government of British Columbia
by Dave Barrett, Commissioner
June 1998


Chapter Three: Plan for Action Continued

II. Homeowner Protection Office

The Homeowner Protection Office reports directly to the Minister of Municipal Affairs and Housing. Both subject portfolios should come under the responsibility of one Minister of the Crown.

The Office would be administered by a Chief Executive Officer. He/she would have the authority to hire staff, and be responsible for the operational functions, as established in the legislation. Since the Office would be self-financing and have regulatory functions, it would be similar to other government agencies having a greater autonomy in decision-making procedures. The Homeowners Protection Office would be subject to audit through the Auditor-General.

(a) Purpose

(1) To strengthen consumer protection for buyers of new homes, by establishing mandatory warranty coverages and standards of provision;
(2) To improve the quality of residential construction through the registration and classification of developers, builders, contractors, and sub-contractors;
(3) To undertake research, disseminate information, evaluate conditions, and prescribe repairs for problem residential buildings; and
(4) To establish a BC Home Reconstruction Fund to provide financial support for owners of problem residences.

Organization Structure

The following is an organization chart for implementing the proposed Homeowner Protection Office:

The CEO reports to the Minister of Municipal Affairs and is responsible for carrying out the provisions of the Homeowner Protection Act. There are three main administrative functions, including consumer protection through regulation and licensing of the developer/builder and the warranty providers; research and education, which included the Provincial Advisory Council and building code interpretation, and administration of the Reconstruction Fund.

The financing for the operation of the Office will be provided by registration fees from builders and developers, a special levy on architects, fee for service (such as ADR), and fines.

Each of these functions are the responsibility of a senior administrator, reporting to the CEO, and will be supported by a small staff. The details of the responsibilities for each of these functions is provided below.

(1) Strengthen Consumer Protection

(i) Mandatory, competitive market warranty on all new residential buildings constructed, and on all renovations. The only exceptions being some builder/owned residences.
(ii) Sets the standards for coverage of home warranty protection; requires the acknowledgment and inclusion in premium rating of manufacturer warranties, and requires that building materials and systems with warranties be preferred over systems or materials without manufacturer endorsement; sets standards with respect to the claims-settlement process; sets standards with respect to the relevant financial solvency and performance criteria of warranty companies.
(iii) The standards are measured (audited) by the Homeowner Protection Office, which has the power to set such standards.
(iv) All warranty companies must be at arms length from builders. NHW has a period of grace to divest itself from HBABC.
(v) If warranty coverage is not provided to a home builder, building permits will not be issued by the municipality.
(vi) It is incumbent upon the warranty company to provide to the homeowner or strata council, a complete list of all the warranties on the building, including the home warranty, and to identify the key dates when certain coverages expire. It is the responsibility of the warranty company to ensure that, if damages are covered by a manufacturer, the manufacturer repairs in a timely and orderly fashion.

(2) Improve the Quality of Residential Construction

(i) Setting and monitoring a standard of qualification for registration of developers, residential builders, contractors, sub-contractors and renovators, including an appeal process for the regulation;
(ii) Reviews and makes recommendations to other governing bodies, where applicable, for changes regarding the standards of skills, abilities, roles, and responsibilities for all other parties involved in the construction and sale of a home. This includes municipal and provincial inspectors, architects, engineers, and management firms;

(iii)

As supported by the Condominium Act, ensures appropriate documentation is provided to the ultimate owner to maintain more effectively and carry out renovations, if necessary, including all blueprints, designs, as-built plans, copies of letters of assurance, permits, list of all professional, companies, contractors, trades, and sub-trades who worked on the project, and maintenance manual;
(iv) Reviews and recommends changes and monitors, on an ongoing basis, the provincial building code as it relates to residential construction; and
(v) Receives complaints and initiates review of such complaints as they pertain to the effective functioning of residential construction.

(3) Research, Education, Diagnosis and Prescription

In an effort to collect, review, and communicate the emerging intelligence of building science technology, it is imperative that a research and education function be established for remediating the current problem, and ensuring quality of construction on an ongoing basis. This research and education function would be a creature of the Homeowner Protection Office and would serve as a source of best practices on a go-forward basis. It would:

(i) Serve as a research clearing house concerning the construction and retrofitting of housing, particularly from the point of view of ensuring that they are weatherproof;
(ii) Provide an expert and unbiased source of advice to strata councils and home owners concerning water infiltration and reconstruction problems;
(iii) Create or approve teams of qualified inspectors to inspect existing condos and other residential buildings, diagnose problems, and recommend remedial action to mitigate future, more expensive repairs. If financial assistance is to be forthcoming from the Reconstruction Fund, the repairs would have to be undertaken by qualified renovators under an approved training program; and
(iv) If financing from the Reconstruction Fund is to be forthcoming for repairs already undertaken, the Office would require an assessment of these renovations, to ensure they are of good quality and make corrective suggestions, where necessary.

(4) Reconstruction Fund

Loans would be made available through the Reconstruction Fund, as a lender of last resort, subsequent to all the measures outlined above having been accessed. Loans are provided at a low-interest, no-interest or in extreme cases, on a forgivable basis.

Loan amounts are for the net cost incurred by the homeowner (i.e, after GST, PST and income tax deductibility of expenses) and are calculated as $30,000 or 100% of the actual net cost of repairs.

Elgibility:

 

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Copyright © 1998: Government of the Province of British Columbia