1998/99 Legislative Session: 3rd Session, 36th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


HONOURABLE JENNY KWAN
MINISTER OF MUNICIPAL AFFAIRS

BILL 46 -- 1998

HOMEOWNER PROTECTION ACT

 
Contents

Section  
Part 1 -- Introductory Provisions
1  Definitions
2  Purposes of the Act
Part 2 -- Homeowner Protection Office
3  Homeowner Protection Office
4  Board
5  Powers and duties of the chief executive officer
6  Financial administration of the office
Part 3 -- Registrar
7  Registrar
8  Duties of the registrar
9  Enforcement
10  Collection of fees
Part 4 -- Research and Education Division
11  Establishment of research and education division
12  Purposes of the division
13  Advisory council
Part 5 -- Licensing of Residential Builders
14  Licensing of residential builders
15  Refusal, suspension or cancellation of a residential builder's licence
16  Procedure for refusing, suspending or cancelling the licence of a residential builder
17  Public register
18  Licensing of other persons
Part 6 -- Trades and Occupations
19  Compulsory certification of trades and occupations
Part 7 -- Owner Builders
20  Owner builder not required to be licensed or obtain home warranty insurance
21  Disclosure and security
Part 8 -- Consumer Protection for New Home Buyers
22  Mandatory home warranty
23  Statutory protection
Part 9 -- Reconstruction Program
24  Reconstruction Program established
25  Payments to the program
26  Annual assessment
27  Payments from the program
28  Agreements
Part 10 -- Alternate Dispute Resolution
29  Dispute resolution processes
Part 11 -- General Provisions
30  Building permits
31  Injunction
32  Regulations
33  Minister's regulations
34  Offence and penalty
35  Compensation to consumer
36  Transitional
37-42  Consequential Amendments
43  Commencement

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 -- Introductory Provisions

Definitions

1 In this Act:

"advisory council" means the Provincial Advisory Council on Homeowner Protection established under section 13;

"chief executive officer" means the person appointed under section 3 (3) as the chief executive officer of the Homeowner Protection Office;

"director of research and education" means the person designated under section 11 (b) as the director of research and education for the office;

"home warranty insurance" has the same meaning as in section 189.1 (1) of the Insurance Act;

"new home" means a building, or portion of a building, that is newly constructed and intended for residential occupancy, and includes

(a) a self-contained dwelling unit that is

(i) detached, or

(ii) attached to one or more other self-contained dwelling units,

(b) a building having 2 or more self-contained dwelling units under one ownership,

(c) common property, common facilities and other assets of a strata corporation, and

(d) any building or portion of a building of a class prescribed by the regulations as a new home to which this Act applies,

but does not include a manufactured home unless otherwise prescribed;

"office" means the Homeowner Protection Office established under section 3 (1);

"owner" means a person who

(a) purchases a new home, or

(b) contracts with a residential builder to construct a new home,

and includes

(c) a person who purchases a life interest in a new home,

(d) a strata corporation in respect of the common property, common facilities and other assets,

(e) a cooperative, corporation or society having an ownership interest in a new home, and

(f) a subsequent purchaser of a new home;

"owner builder" means an individual who

(a) for personal use builds, or undertakes the renovation of, a detached self- contained dwelling unit or any building, or portion of a building, of a class prescribed by the regulations, and

(b) has not, within the previous 18 months, built or undertaken the renovation of a dwelling unit or building referred to in paragraph (a);

"program" means the Reconstruction Program established under section 24;

"registrar" means the person designated under section 7 (1) as the registrar;

"renovation" means a change, addition or alteration to a home, or a repair to a home, as prescribed by the regulations;

"residential builder" means a person who engages in, arranges for or manages all or substantially all of the construction of a new home, and includes a developer and a general contractor;

"vendor" means a person who sells their ownership interest in a new home;

"warranty provider" means a person who has a business authorization under the Financial Institutions Act to carry on insurance business.

Purposes of the Act

2 (1) The purposes of this Act are

(a) to strengthen consumer protection for buyers of new homes,

(b) to improve the quality of residential construction, and

(c) to support research and education respecting residential construction in British Columbia.

(2) A further purpose of this Act is to establish a Reconstruction Program to provide financial assistance to eligible homeowners for home reconstruction.

Part 2 -- Homeowner Protection Office

Homeowner Protection Office

3 (1) The Homeowner Protection Office is established consisting of the board appointed under section 4 (1).

(2) The purposes of the office are

(a) to license residential builders and other persons required to be licensed under this Act,

(b) to carry out research and education respecting residential construction in British Columbia, and

(c) to administer the program.

(3) The Lieutenant Governor in Council must appoint a person as chief executive officer for the office and may determine the remuneration and the terms and conditions of the appointment of the chief executive officer.

(4) Subject to the approval of the Lieutenant Governor in Council, the office, for the purpose of carrying out any power, right, function or duty conferred or imposed on it under this or any other Act, may borrow the sums of money it considers necessary or advisable.

(5) The office is a corporation and has the power and capacity of a natural person of full capacity.

(6) The office is, for all purposes, an agent of the government and its powers may be exercised only as an agent of the government.

(7) The Public Service Act and the Public Service Labour Relations Act do not apply to the office or to a member, officer or employee of the office.

(8) The Company Act does not apply to the office but the Lieutenant Governor in Council may order that one or more provisions of that Act apply.

Board

4 (1) The Lieutenant Governor in Council must

(a) appoint as members of the board at least 3 persons who hold office during pleasure, and

(b) designate one of the members as chair of the board.

(2) The board must manage the affairs of the office or supervise the management of those affairs.

(3) The office may pay to a member

(a) an allowance for reasonable travelling and incidental expenses necessarily incurred in carrying out the business of the office, and

(b) if the member is not a member of the Legislative Assembly or a public servant, remuneration at rates set by the Lieutenant Governor in Council.

Powers and duties of the chief executive officer

5 (1) The chief executive officer must do all of the following:

(a) designate the registrar and the director of research and education;

(b) appoint officers and hire employees as the chief executive officer considers necessary, and set the terms and conditions of their employment, including their remuneration and duties;

(c) advise the minister respecting home warranty insurance or any other matter under this Act or the regulations;

(d) perform other prescribed powers and duties.

(2) The chief executive officer may act as the registrar or the director of research and education, and may perform the duties of either of them.

Financial administration of the office

6 (1) The office must establish and maintain an accounting system satisfactory to the Minister of Finance and Corporate Relations and must, whenever required by that minister, render detailed accounts of its revenues and expenditures for the period or to the day that minister designates.

(2) All books or records of account, documents and other financial records of the office must at all times be open for inspection by the minister or a person designated by the minister.

(3) The Minister of Finance and Corporate Relations may direct the Comptroller General to examine and report to the Minister of Finance and Corporate Relations on any or all of the financial and accounting operations of the office.

(4) The Auditor General must

(a) audit the books and financial affairs of the office at least once in each year, and

(b) report to the office.

(5) The office must, within 90 days of the fiscal year end, submit annually to the minister, in a form approved by the minister,

(a) a report of the office on its operations for the preceding fiscal year,

(b) a financial statement showing the revenues, expenditures, assets and liabilities of the office as of the end of the preceding fiscal year, and

(c) the annual report of the auditor of the office.

(6) The financial statement referred to in subsection (5) (b) must be prepared in accordance with generally accepted accounting principles.

(7) The financial statement and reports referred to in subsection (5) must be laid before the Legislative Assembly by the minister as soon as practicable.

(8) The Minister of Finance and Corporate Relations is the fiscal agent of the office.

(9) The Lieutenant Governor in Council may designate administrative services that the office must obtain from the government or from any government corporation, agency, branch or ministry or other government organization or entity that is specified in the order making the designation.

Part 3 -- Registrar

Registrar

7 (1) The chief executive officer must designate a person as the registrar of residential builders and other persons required to be licensed under this Act.

(2) The registrar may designate a person who may, in the absence of the registrar, perform the duties of the registrar.

Duties of the registrar

8 (1) The registrar has the following duties:

(a) to receive and review applications for licensing from residential builders and other persons required to be licensed under this Act;

(b) to issue licences to, and renew the licences of, residential builders and other persons required to be licensed under this Act who meet the requirements of this Act and the regulations;

(c) subject to section 15, to suspend or cancel licences;

(d) to maintain a register of licensed residential builders and other persons licensed under this Act;

(e) to make entries in the registers in accordance with this Act and the regulations;

(f) to keep records, including records of decisions made by the registrar;

(g) subject to the regulations, to provide information to the public about persons licensed under this Act;

(h) to perform other prescribed duties.

(2) Subject to the regulations, the registrar may request reports from licensed residential builders and other persons licensed under this Act.

Enforcement

9 (1) For the purposes of this Act and the regulations, the registrar or a person authorized by the registrar, may, during regular business hours, do one or more of the following:

(a) subject to subsection (2), enter and examine any premises;

(b) question any person about

(i) the qualifications of workers,

(ii) the work performed by workers, or

(iii) any matter that relates to licensing under this Act;

(c) inspect the records of a person who is required to be licensed under this Act;

(d) require a person to produce for inspection a record referred to in paragraph (c);

(e) on giving a receipt for a record referred to in paragraph (c), remove the record to make copies or extracts;

(f) exercise and perform other prescribed powers and duties.

(2) The registrar or person authorized by the registrar may only enter a place occupied as a private residence with the consent of an occupant.

(3) A person must not obstruct the registrar or other authorized person when exercising his or her powers under this section, or withhold from him or her, or conceal or destroy, a record relevant to an investigation.

(4) On the request of the registrar and for the purposes of this Act and the regulations,

(a) a warranty provider must provide reports respecting

(i) the risk profile of persons required to be licensed under this Act, and

(ii) other prescribed information, and

(b) a municipality or regional district must provide reports respecting building regulation compliance by persons required to be licensed under this Act.

(5) The registrar may specify the form and content of a report required by subsection (4).

Collection of fees

10 (1) The registrar must collect from residential builders and other persons required to be licensed under this Act the prescribed fees for licensing and for the renewal of licences.

(2) Money collected by the registrar under subsection (1) must be paid to the credit of the office and applied to defray the expenses incurred in carrying out the functions of the office under this Act.

(3) Despite the Financial Administration Act, money collected by the registrar under subsection (1) of this section is not paid into the consolidated revenue fund.

Part 4 -- Research and Education Division

Establishment of research and education division

11 The chief executive officer must

(a) establish in the office a research and education division, and

(b) designate a person as director of research and education to manage the division.

Purposes of the division

12 The purposes of the division established under section 11 are as follows:

(a) to establish and maintain expertise in building science, especially as it applies to British Columbia and the British Columbia Building Code;

(b) to advise on necessary and appropriate amendments to the British Columbia Building Code;

(c) to advise the City of Vancouver on necessary and appropriate amendments to the City of Vancouver building by-laws;

(d) to provide advice and assistance to those charged with the responsibility of preparing periodic revisions of the National Building Code of Canada;

(e) to conduct research into cost effective building techniques, processes and materials appropriate for use in British Columbia;

(f) to cooperate with other organizations to establish what constitutes the best practice for building and retrofitting housing in British Columbia;

(g) to support consumer education;

(h) to perform other functions consistent with this Part.

Advisory council

13 (1) An advisory council is established to be known as the Provincial Advisory Council on Homeowner Protection consisting of members appointed by the chief executive officer.

(2) The advisory council established under subsection (1) is to be composed of

(a) participants from the residential construction industry, including architects and engineers,

(b) owners, and

(c) local government.

(3) The chief executive officer may designate one of the members as chair of the advisory council and another member as vice chair.

(4) The chief executive officer may, at any time, rescind an appointment made under subsection (1) or a designation made under subsection (3).

Part 5 -- Licensing of Residential Builders

Licensing of residential builders

14 (1) A person must not carry on the business of a residential builder unless licensed under this Part.

(2) On application to the registrar, a person may be issued with a licence as a residential builder if

(a) the registrar is satisfied that the person meets the qualifications and conditions for licensing required by the regulations, and

(b) the person pays any prescribed licence fee.

(3) For the purposes of subsection (2), a corporation is not qualified to hold a licence unless

(a) at least one of the directors of the corporation is licensed under this Part, and

(b) none of the directors of the corporation has, in the 5 year period immediately preceding the corporation's application for a licence,

(i) had his or her licence cancelled under this Part, or

(ii) been a director of a corporation that has had its licence cancelled under this Part.

(4) A residential builder who is authorized by a licence issued under this Part may use the designation "Licensed Residential Builder".

(5) Unless a person is a licensed residential builder referred to in subsection (4), the person must not

(a) use or display the designation "Licensed Residential Builder", or

(b) imply, suggest or hold out in any manner that the person is a residential builder who is licensed under this Part.

(6) A licence issued under this Part

(a) is valid for one year from the date of issue, or for a shorter period as determined by the registrar,

(b) may be renewed, and

(c) is not transferable.

(7) Subject to the regulations, the registrar may impose conditions on licences issued or renewed under this Part.

Refusal, suspension or cancellation
of a residential builder's licence

15 The registrar may refuse to renew, or may suspend, cancel or impose restrictions on, the licence of a residential builder

(a) for any reason that would disqualify a residential builder under section 14 if the residential builder were an applicant,

(b) if the residential builder has made a false statement on a material matter in the application or refuses to provide information on a material matter when requested to do so by the registrar, or

(c) if the residential builder is in breach of a condition of, or restriction on, the licence or is convicted of an offence under this Act or the regulations.

Procedure for refusing, suspending or
cancelling the licence of a residential builder

16 (1) If the registrar refuses to issue a licence to, or renew the licence of, a residential builder, or suspends, cancels or imposes restrictions on the licence of a residential builder, the registrar must

(a) serve notice of the decision, together with written reasons, on the residential builder, and

(b) state in the notice that the residential builder has a right to appeal the decision of the registrar to the Commercial Appeals Commission under the Commercial Appeals Commission Act.

(2) The appeal must be made in the manner and within the time allowed in the Commercial Appeals Commission Act.

Public register

17 (1) The registrar must compile a list of all residential builders licensed under this Part.

(2) The list required by subsection (1) is a public record and must be made available for inspection by any person during the regular business hours of the office.

Licensing of other persons

18 If a residential subcontractor or residential renovator is required by the regulations to be licensed, a reference to "residential builder" in this Part is deemed to be also a reference to "residential subcontractor" or "residential renovator", as the case may be.

Part 6 -- Trades and Occupations

Compulsory certification of trades and occupations

19 (1) In this section, "compulsory certification occupation" and "compulsory certification trade" have the same meaning as in section 1 of the Industry Training and Apprenticeship Act.

(2) The chief executive officer may provide advice to the Lieutenant Governor in Council for the purposes of section 13 of the Industry Training and Apprenticeship Act with respect to specifying

(a) a designated occupation as a compulsory certification occupation, and

(b) a designated trade as a compulsory certification trade.

(3) A person must not work in a compulsory certification occupation or a compulsory certification trade unless the person is in compliance with section 13 (4) of the Industry Training and Apprenticeship Act.

(4) A person licensed under this Act must not employ a person to work in a compulsory certification occupation or a compulsory certification trade if the employer knows, or would reasonably be expected to know, that the person is not permitted by subsection (3) to work in that trade or occupation.

Part 7 -- Owner Builders

Owner builder not required to be licensed
or obtain home warranty insurance

20 (1) An owner builder is not required

(a) to be licensed under this Act, or

(b) to obtain home warranty insurance.

(2) Despite subsection (1) (b), an owner builder may choose to obtain home warranty insurance.

Disclosure and security

21 An owner builder must, before selling a home that is not covered by home warranty insurance during the period in which home warranty insurance would have been in effect under this Act or the regulations, provide to a person offering to purchase the home

(a) a disclosure notice in the prescribed form stating that the home is not covered by home warranty insurance, and

(b) if required by the regulations, another form of security instead of home warranty insurance.

Part 8 -- Consumer Protection for New Home Buyers

Mandatory home warranty

22 (1) A person must not build, offer for sale or sell a new home unless the new home is covered by home warranty insurance.

(2) Home warranty insurance for a new home must provide coverage for

(a) defects in materials and labour for a period of at least 2 years after the date on which the warranty begins,

(b) defects in the building envelope, including defects resulting in water penetration, for a period of at least 5 years after the date on which the warranty begins, and

(c) structural defects for a period of at least 10 years after the date on which the warranty begins.

(3) If required by the regulations, a person must not undertake a renovation or offer for sale or sell a renovated home unless the renovation is covered by home warranty insurance.

(4) Subsections (1) and (3) do not apply to an owner builder.

Statutory protection

23 (1) A residential builder and a vendor of a new home are both deemed to have agreed with the owner, to the extent of labour, materials and design supplied, used or arranged by the residential builder or vendor, that the new home

(a) is reasonably fit for habitation,

(b) has been constructed from materials that are of good quality and reasonably fit for the purpose, and

(c) has been designed and constructed with ordinary competence, skill and care.

(2) Any term of an agreement that purports to waive, exclude, limit or qualify the protection under subsection (1) is of no effect.

(3) The protection under subsection (1) is for the benefit of whoever is the owner of the new home from time to time until the end of the period within which an action may be brought under subsection (5), and that owner is deemed

(a) to have given good consideration for the benefit of the protection, and

(b) to be the only person entitled to recover damages for a breach of the protection.

(4) Despite subsection (3), if the ownership of the new home changes during the course of an action for breach of the protection under subsection (1), the new owner is entitled to be substituted as plaintiff and to enforce all rights that the former owner could have enforced.

(5) An action in respect of the protection under subsection (1) must be commenced within 10 years after the date of first occupancy of the new home or, in respect of common property, common facilities and other assets of a strata corporation, the date the strata plan is deposited in a land title office in accordance with the Condominium Act.

(6) Nothing in this section

(a) excludes, qualifies or limits any other term, express or implied,

(b) relieves any person of liability to which they would otherwise be subject, or

(c) subjects a municipality or regional district to any greater liability than if this section were not in force.

(7) This section does not apply to a new home covered by home warranty insurance.

Part 9 -- Reconstruction Program

Reconstruction Program established

24 A program is established to be known as the Reconstruction Program for the purpose of providing financial assistance to eligible homeowners for home reconstruction.

Payments to the program

25 (1) The office must pay the following money to the credit of the program:

(a) any donations, grants or loans to the program received from

(i) the government of Canada or British Columbia,

(ii) any public or private corporation, or

(iii) any other person;

(b) assessments levied under section 26;

(c) investment earnings on the money referred to in paragraphs (a) and (b).

(2) Money paid to the credit of the program

(a) is the property of the office,

(b) must be accounted for separately from other money of the office, and

(c) is not subject to any process of seizure or attachment by any creditor of the office.

(3) The office must place with the Minister of Finance and Corporate Relations, for investment, money paid to the credit of the program that is not immediately required for carrying out the purposes of section 27.

(4) Money placed with the Minister of Finance and Corporate Relations under this section is to be treated for all purposes as money placed with that minister under section 40 (5) of the Financial Administration Act.

Annual assessment

26 (1) For the purposes of the program, the Lieutenant Governor in Council may make regulations prescribing an annual assessment that must be paid by prescribed categories of residential builders as part of a licence fee payable under section 14 (2).

(2) For the purpose of subsection (1), the Lieutenant Governor in Council may prescribe formulas for calculating the assessment and the time for payment of that assessment.

(3) If a residential builder defaults in the payment of an assessment that is due and payable under this Act, the chief executive officer may

(a) issue a certificate stating the amount due, the amount remaining unpaid, including prescribed interest, and the name of the person by whom it is payable, and

(b) file the certificate with a district registrar of the Supreme Court,

and when filed the certificate has the same force and effect, and all proceedings may be taken on it, as if it were a judgment of the court for the recovery of a debt for the amount stated in the certificate against the person named in it.

(4) In addition to any other remedy available to the office, failure to pay the assessment in the amounts and at the times specified in the regulations may be cause for the registrar to refuse to renew, or to suspend, cancel or impose restrictions on, the licence of a residential builder.

Payments from the program

27 (1) Subject to the regulations, the chief executive officer may authorize payments out of the program to provide financial assistance to eligible homeowners.

(2) In addition to the payments authorized by subsection (1), the chief executive officer may authorize payments out of the program as follows:

(a) for the repayment of any advance made to the program;

(b) for the repayment of any loans made to the program;

(c) for costs of administering the program;

(d) for any matter relating to the protection and maintenance of the program;

(e) as required by an agreement entered into under section 28.

Agreements

28 The chief executive officer, on behalf of the office, may enter into agreements with prescribed persons for any purposes consistent with this Part.

Part 10 -- Alternate Dispute Resolution

Dispute resolution processes

29 (1) For the purpose of resolving residential construction disputes before or after an action is commenced arising out of or in connection with the construction of new homes, including, without limitation, disputes about home warranty insurance, the Lieutenant Governor in Council may make regulations respecting the mediation or arbitration of residential construction disputes.

(2) For the purposes of the mediation of residential construction disputes referred to in subsection (1), the Lieutenant Governor in Council may make regulations including, without limitation, regulations

(a) providing to a party to a residential construction dispute the ability to require the parties to engage in mediation and setting out when and how that ability may be exercised and prescribing any other results that flow from the exercise of that ability, and

(b) respecting

(i) the forms or procedures that must or may be used or followed before, during and after the mediation process,

(ii) requiring and maintaining confidentiality of information disclosed for the purposes of mediation,

(iii) the circumstances and manner in which a party to a residential construction dispute may opt out of or be exempted from mediation,

(iv) the costs and other sanctions that may be imposed in relation to mediation, including, without limitation, in relation to any failure to participate in mediation when and as required or otherwise to comply with the regulations,

(v) the mediators' fees and disbursements, and

(vi) the qualifications required for, and the selection and identification of, individuals who may act as mediators in the mediation process contemplated by the regulations.

(3) For the purposes of the arbitration of residential construction disputes referred to in subsection (1), the Lieutenant Governor in Council may make regulations including, without limitation, regulations

(a) providing when and how an arbitration will occur, and who will participate in the arbitration,

(b) respecting the forms, procedures and rules that must or may be used or followed for an arbitration, and

(c) respecting the costs, fees and disbursements for an arbitration.

(4) If and to the extent that there is any conflict between regulations made under subsections (1) to (3) and any other enactment, including, without limitation, the rules of any court, the regulations made under subsections (1) to (3) prevail.

(5) Regulations made under subsection (2) may provide for a mediation process to be applicable to residential construction actions brought out of one or more court registries and may be different for residential construction actions brought out of different court registries.

(6) Section 9 of the Insurance Act does not apply to home warranty insurance disputes.

Part 11 -- General Provisions

Building permits

30 (1) A municipality or regional district must not issue a building permit for a proposed new home unless the applicant provides evidence, in the prescribed form,

(a) that the proposed new home

(i) is covered by home warranty insurance, or

(ii) will be built by an owner builder or is otherwise exempted by regulation from the requirement to be covered by home warranty insurance, and

(b) that the proposed new home will be built

(i) by a licensed residential builder, or

(ii) by an owner builder or a person who is otherwise exempted by regulation from the requirement to be licensed as a residential builder.

(2) If a municipality or regional district issues a building permit for a proposed new home, relying in good faith on the evidence provided under subsection (1), the municipality or regional district is not liable, either directly or vicariously, for any damages or other loss, including economic loss, sustained by any person because

(a) the new home is not covered by home warranty insurance, or

(b) the new home was not built by a licensed residential builder.

(3) On request of the registrar, a municipality or regional district must forward to the registrar information provided by applicants for building permits under subsection (1).

(4) If a residential renovator is required by the regulations to be licensed and renovations are required by the regulations to be covered by home warranty insurance, a reference in this section to "new home" or "residential builder" is deemed to be also a reference to "renovation" or "residential renovator", as the case may be.

Injunction

31 (1) On application of the chief executive officer or the registrar, and on being satisfied that there is reason to believe that this Act or the regulations are or will be contravened, the Supreme Court may grant an injunction restraining a person from the contravention or requiring a person to comply.

(2) At any time before the court disposes of the injunction proceeding, it may grant an interim injunction.

Regulations

32 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make the following regulations:

(a) defining, for the purpose of paragraph (d) of the definition of "new home" in section 1, a class of buildings or portion of a building, including a manufactured home, as a new home to which this Act applies;

(b) prescribing dwelling units for the purposes of the definition of "owner builder" in section 1;

(c) prescribing renovations, and requiring that renovations be covered by home warranty insurance;

(d) prescribing additional powers and duties of the chief executive officer and the registrar;

(e) requiring categories of residential subcontractors and residential renovators to be licensed under this Act, and may provide differently for different categories of residential subcontractors and residential renovators;

(f) exempting

(i) categories of persons from all or any portion of this Act and the regulations, and may provide differently for different categories of persons,

(ii) a building, a class of buildings, a portion of a building or the common property, common facilities and other assets of a strata corporation from the definition of "new home" in section 1,

(iii) a category of persons from the definition of "owner builder" in section 1,

(iv) a category of persons from the definition of "residential builder" in section 1, and

(v) areas of British Columbia from the application of all or any portion of this Act and the regulations;

(g) prescribing information that must be provided by warranty providers to the registrar;

(h) requiring owner builders, and any other persons exempted from section 22 (1) or (3), who do not provide home warranty insurance and who sell the home during the period in which home warranty insurance would have been in force under this Act or the regulations, to provide a disclosure notice or security, or both, on the resale of the home, and may specify the form and content of a disclosure notice and the terms, conditions, kind and amount of security;

(i) prescribing interest payable on an assessment made under section 26;

(j) requiring municipalities and regional districts to collect assessments under section 26 from applicants for building permits, and to forward to the office the amounts collected;

(k) providing that a person who commits an offence under the regulations is liable to the penalties provided for in section 34 (1) to (3);

(l) defining, for the purpose of this Act or the regulations, any word or expression not defined in this Act;

(m) respecting any matters that, in the opinion of the Lieutenant Governor in Council, will assist in the operation of the program.

(3) The Lieutenant Governor in Council may make regulations respecting licensing under this Act as follows:

(a) prescribing the qualifications and conditions for licensing of residential builders, residential subcontractors and residential renovators, and may provide different qualifications and conditions for different categories of residential builders, residential subcontractors and residential renovators;

(b) prescribing licensing fees, and may set different fees for different categories of residential builders, residential subcontractors and residential renovators;

(c) prescribing conditions that may be imposed on the licence or the renewal of the licence of a residential builder, residential subcontractor or residential renovator for the purposes of this Act, and may provide different conditions for different categories of residential builders, residential subcontractors and residential renovators;

(d) respecting the issuance, duration, expiration, renewal, suspension and cancellation of licences;

(e) prescribing how notice of a decision of the registrar may be served on an affected person.

Minister's regulations

33 The minister may make regulations as follows:

(a) prescribing the form and content of reports required from residential builders, residential subcontractors and residential renovators;

(b) respecting the form of evidence that must be provided to a municipality or regional district by an applicant for a building permit;

(c) prescribing information to be provided to the public about residential builders, residential subcontractors and residential renovators.

Offence and penalty

34 (1) Every person who

(a) knowingly furnishes false information in any application under this Act or in any statement or return required to be furnished under this Act or the regulations, or

(b) contravenes section 9 (3), 14 (1) or (5), 19 (4), 21 or 22 (1) or (3),

commits an offence and is liable on conviction to a fine of not more than $25 000 or to imprisonment for a term of not more than one year, or to both.

(2) If a corporation commits an offence under subsection (1), every director, officer or other person who authorized, permitted or acquiesced in the offence commits the offence personally and is liable on conviction to a fine of not more than $25 000 or to imprisonment for a term of not more than one year, or to both.

(3) Despite subsection (1), if a corporation is convicted of an offence under subsection (1), the maximum penalty that may be imposed on the corporation is $100 000.

(4) Every person who contravenes section 19 (3) commits an offence and is liable on conviction to a fine of not more than $2 000 or to imprisonment for not more than 6 months, or to both.

(5) Section 5 of the Offence Act does not apply to this Act.

Compensation to consumer

35 (1) In addition to a penalty imposed under section 34, a court that convicts a defendant of an offence under this Act may at the time the penalty is imposed order the defendant to pay to the owner as compensation for pecuniary loss suffered by the owner as a result of the commission of the offence an amount not greater than the monetary jurisdiction specified in the Small Claims Act.

(2) An application for an order under subsection (1) may be made by an owner or by the Crown prosecutor on the request and on behalf of the owner unless the owner has commenced a civil action against the defendant in respect of the same matter.

(3) If the defendant does not comply with an order made under subsection (1) within 30 days or within the time ordered by the court, whichever is later, the owner may, by filing the order with the registrar of the Provincial Court hearing matters under the Small Claims Act in or near the place where the conviction was entered, enter judgment in that court.

(4) A judgment entered in the Provincial Court under subsection (3) is enforceable against the defendant in the same manner as if it were a judgment rendered in that court in civil proceedings.

Transitional

36 The Lieutenant Governor in Council may make regulations the Lieutenant Governor in Council considers necessary or advisable for meeting or removing any difficulty arising out of the coming into force of this Act or any provision of it, and for preserving and giving effect to the rights of persons arising prior to the coming into force of this Act or any provision of it, and the regulations may be made to apply generally or to a particular case or class of cases.

 
Consequential Amendments

 
Financial Institutions Act

37 Section 1 (1) of the Financial Institutions Act, R.S.B.C. 1996, c. 141, is amended

(a) in the definition of "deposit business" by striking out "term;" at the end of paragraph (d) and substituting "term," and by adding the following after paragraph (d):

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (d) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution; ,

(b) in the definition of "insurance business" by striking out "(a) to (g);" at the end of paragraph (h) and substituting "(a) to (g)," and by adding the following after paragraph (h):

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (h) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution; , and

(c) in the definition of "trust business" by striking out "person;" at the end of paragraph (c) and substituting "person," and by adding the following after paragraph (c):

whether or not the person undertaking an activity or activities set out in paragraphs (a) to (c) can or does distribute any gain, profit or dividend, or otherwise disposes of the person's assets, to a member or shareholder of the person other than during winding up or on dissolution; .

 
Freedom of Information and Protection of Privacy Act

38 Schedule 2 of the Freedom of Information and Protection of Privacy Act, R.S.B.C. 1996, c. 165, is amended by adding the following:

  Public Body:  Homeowner Protection Office
  Head: Chief Executive Officer .

 
Insurance Act

39 The Insurance Act, R.S.B.C. 1996, c. 226, is amended by adding the following section to Part 7:

Home warranty insurance

189.1 (1) In this section:

"new home" has the same meaning as in section 1 of the Homeowner Protection Act;

"home warranty certificate" means a certificate, issued by an insurer providing home warranty insurance to an owner, that sets out the terms and conditions of the home warranty insurance;

"home warranty insurance" means a contract of insurance covering defects in the construction of a new home or renovation, and consequential losses or costs incurred by the owner;

"owner" has the same meaning as in section 1 of the Homeowner Protection Act;

"renovation" has the same meaning as in section 1 of the Homeowner Protection Act;

(2) If mandatory conditions for home warranty insurance are required by regulations made under this Act

(a) the mandatory conditions are deemed to be part of the home warranty insurance and must be printed in every home warranty certificate under the heading "Mandatory Conditions", and

(b) no variation or omission of or addition to a mandatory condition is binding on the insured.

(3) The home warranty insurance must provide coverage at least equal to the minimum standards set out in the regulations and, if the home warranty insurance does not, in any of its provisions, provide coverage at least equal to the prescribed minimum coverage, the coverage provided in the relevant provisions of the contract is deemed to be replaced by the appropriate prescribed minimum coverage.

(4) The home warranty insurance must not contain

(a) any term which purports to waive, exclude, limit or qualify the home warranty insurance except as may be permitted by regulation, or

(b) any exclusions from coverage except as permitted by regulation,

and any such term or exclusion has no effect.

(5) A person must not waive or invalidate home warranty insurance except as may be permitted by the regulations, and any such waiver or invalidation has no effect.

(6) The home warranty insurance is enforceable even if there is no privity of contract between the owner and the insurer.

40 Section 192 is amended by adding the following subsections:

(3) Without limiting subsection (1), the Lieutenant Governor in Council may, on the recommendation of the minister responsible for the Homeowner Protection Act, make regulations as follows:

(a) prescribing mandatory conditions that must be contained in a home warranty insurance;

(b) prescribing minimum standards for the coverage to be provided by home warranty insurance, including periods of coverage, the time at which coverage begins and coverage limits;

(c) prescribing permitted exclusions of coverage, waiver, limitations or qualifications under home warranty insurance;

(d) prescribing terms that must not be included in home warranty insurance;

(e) prescribing terms and conditions that apply to insurers with respect to home warranty insurance;

(f) prescribing classes of new homes, renovations and home warranty insurance, and categories of residential builders and residential renovators.

(4) A regulation made under subsection (3) may be made applicable generally or to specific persons, new homes, renovations or home warranty insurance or to a category of persons or class of new homes, renovations or home warranty insurance, and may provide differently for different persons, new homes, renovations or home warranty insurance or for different categories of persons or classes of new homes, renovations or home warranty insurance.

 
Real Estate Act

41 Section 1 of the Real Estate Act, R.S.B.C. 1996, c. 397, is amended in the definition of "agent" by adding the following paragraph:

(e.2) performs strata management services for strata corporations, .

42 Section 55 (2) (b) is amended by striking out "paragraph (e.1)" and substituting "paragraph (e.1) or (e.2)".

Commencement

43 This Act comes into force by regulation of the Lieutenant Governor in Council.

 
Explanatory Note

This Bill will strengthen consumer protection for buyers of new homes by requiring that new homes be covered by a new home warranty issued by a private, third party warranty company, and by expanding the common law on implied warranties on new homes. The Bill consequentially amends the Financial Institutions Act and the Insurance Act to regulate warranty companies and warranty products under those Acts.

In addition, this Bill will improve quality and accountability in residential construction by establishing a Homeowner Protection Office to license residential builders who meet prescribed qualifications. The Bill also enables the licensing of residential subcontractors and renovators, and consequentially amends the Real Estate Act to provide for the licensing of strata corporation property managers under that Act.

Finally, this Bill establishes a Reconstruction Program, which will be administered by the Homeowner Protection Office, to provide financial assistance to eligible homeowners who face major repair costs because of construction defects.


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