Since 2015, the Residential Construction Warranty (GCR) is the only organization authorized by the Régie du bâtiment du Québec to issue mandatory warranty certificates.

What types of homes are covered by this warranty?

The GCR covers three types of properties:

- Single-family semi-detached and row houses;
- Multifamily homes with 2 to 5 units (duplexes, triplexes, etc.);
- Condominium units stacked up to a maximum of 4 units, excluding private parking and storage spaces.

Factory-built homes are also covered by the Warranty Plan in the following cases: the sales contract with the manufacturer includes complete installation of the home (turnkey project) OR the sales and installation contract is with a general contractor (turnkey project). If the sales contract is with the manufacturer of the factory-built home and the installation contract is with a general contractor, then only the installation part covered by the contract with the general contractor is included in the Warranty Plan.

Note: There are certain exclusions. For example, in the case of a self-build where no contractor is involved, the warranty does not apply. Moreover, the new residential building warranty plan only covers entirely new buildings. If an existing part of a building is reused during construction, the coverage does not apply.

How are coverages enhanced?

Protections depends of housing types:

• For a single-family home: $300,000 maximum coverage. Previously, this type of home was covered up to $260,000 under the old system.
• For a multifamily home: $200,000 per unit or $1,000,000 for a five-unit building.
• For a condominium: $300,000 per unit.

The coverage includes items such as completion of work, repair of defects or deficiencies, relocation and storage costs, etc.

Deposits are also better protected. Previously, deposits were covered up to $39,000, and this amount has increased to $50,000 with the GCR.

Inspection procedures

The GCR has implemented an inspection program (validated by the RBQ) determined based on a rating assigned to the contractor. This rating is assigned based on inspection results, the number of claims, satisfaction surveys, etc. The better the rating, the fewer inspections are required. Thus, some contractors may be inspected for 100% of their constructions and, if the quality of their work does not improve, they could eventually lose their license.

For more information on mandatory warranties, you can consult the GCR website here.

At the beginning of 2022, the Residential Construction Warranty announced the publication of a list of companies that have lost their accreditation. This new tool aims to prevent fraud and transactions that do not comply with the law.

What about constructions not covered by the GCR?

For a building to be covered by the new warranty plan, the purchase contract must have been signed on or after January 1, 2015, and construction work must not have started before January 1, 2015. Additionally, it must not be a large building with more than four units or a building where an existing part has been converted into divided co-ownership.

So what happens with these constructions? According to Éric Coté, spokesperson for the Association de la Construction du Québec (ACQ), about 90% of buildings not covered by the GCR are subscribed to a non-mandatory warranty. The ACQ itself covers about 60% of these buildings, including the famous Tour des Canadiens 1 in downtown Montreal, their largest project. "It is true that the market for large buildings has not been regulated and the warranty is not mandatory, but more and more mortgage lenders consider having an optional warranty to be an asset," explains Éric Coté. Thus, although there is no obligation to subscribe to insurance, 95% of units outside the GCR are covered by an optional warranty plan. This says a lot. "We also work a lot upstream to prevent problems. We prefer to go to the source, for example by conducting checks during construction," says the ACQ spokesperson. Bonds will also be required for less experienced contractors. These risk management examples are very reassuring.

In addition to the ACQ, the Association des professionnels de la construction et de l’habitation du Québec (APCHQ) offers an optional warranty called the Garantie des immeubles résidentiels inc. (GIR). The Garantie Habitation des Maîtres Bâtisseurs (GHMB) offers a warranty plan specifically designed for condominium towers with more than four (4) stacked private units and conversion projects into condominiums. Therefore, several options exist to ensure safe and reliable construction.

However, promoters are not required to cover their buildings with an optional warranty plan. The latter varies from project to project, and buyers must actively inform themselves about the content of their warranty when signing their preliminary contract.

Overview of non-mandatory plans

Non-mandatory plans, like the GCR, cover deposits, hidden defects, apparent defects, etc. In all cases, a pre-possession inspection is necessary. For example, GHMB specifies that this inspection must be carried out jointly by the contractor and the consumer using a predefined checklist provided by them. The client can be assisted during the inspection by a person of their choice.

What about the coverages offered? "There are several axes we try to offer to the contractor in terms of services and support. The client of the warranty plan is the contractor, but the beneficiary is the buyer who will benefit from certain protections," explains Raymond Hébert, general manager of GIR. Thus, the GIR protects deposits up to $30,000 ($2M for the entire building). "The second protection is at the level of completion and apparent defects. When the buyer takes possession of the unit, they can report all visible defects during the inspection and anything that was not finished," continues Raymond Hébert. Finally, GIR also offers protection for hidden defects and construction defects (1 year and 5 years, respectively).

Although the different optional plans are similar, it is advisable to compare them according to needs. For example, the ACQ offers deposit protection up to $50,000, and $30,000 in the case of renovation work. Completion of work and hidden defects are also covered.

Everyone agrees that awareness remains an area to work on for optional warranties. Not everyone knows that a building is not automatically guaranteed, so vigilance is required.