What is the Guarantee Plan for new residential properties in Quebec?
How does it work?
What are the key aspects you should know!
In this article, we will break down the notion of Guarantee Plan so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let’s dig into our Quebec real estate laws!
Are you ready?
Let’s get started!
Guarantee Plan In Quebec
In the province of Quebec, there are laws protecting individuals buying a new home or condo from a promoter, entrepreneur, or developer.
In 1999, the Quebec government implemented a mandatory “Guarantee Plan” requiring contractors to comply with certain legal obligations in an attempt to ensure home buyers are protected.
Today, the Guarantee Plan in Quebec is governed by the Regulation Respecting the Guarantee Plan For New Residential Buildings (or “Règlement sur le plan de garantie des bâtiments résidentiels neufs”).
This regulation is adopted further to the Building Act (or “Loi sur le bâtiment).
In essence, the Guarantee Plan is designed to protect homebuyers from:
- Contract delaying to deliver the property
- Latent defects
- Serious flaws with the property
Article 2 of the Regulation states that the “Regulation applies to guarantee plans guaranteeing the performance of the contractor’s legal and contractual obligations (…) and resulting from a contract entered into with a beneficiary for the sale or construction of” a new property.
Let’s look at certain key aspects of the Quebec Guarantee Plan.
The first step is to verify if your property is covered by the Quebec Guarantee Plan for New Residential Buildings.
In essence, a “new building” can be:
- Detached property
- Semi-detached property
- Row-type single family property
- Multi-family buildings of our private portions stacked one above the other excluding the private areas used for parking
If you are considering a prefabricated home, the plan of guarantee will cover you if:
- You have a sales contract that includes the complete installation of the property
- If your contract with a contractor is turnkey
- If you have a sales contract for the prefabricated home and installation contract with a general contractor for the on-site installation
If the new property you are looking to have built for you is covered by the Guarantee Plan, you should be happy to know that you can benefit from some legal protections.
The next step is to ensure that the contract you sign with the builder or seller of the property is in conformity with the law.
Your builder or contractor must provide you with a signed copy of the guarantee contract for the type of property you are buying.
For example, if you are buying a detached property, you should get a guarantee contract intended for detached properties.
The guarantee contract is a legally binding agreement between the contractor and the buyer setting out the terms and conditions of the guarantee, such as:
- How to make a claim
- Type of recourses available to the buyer
The guarantee contract should contain the following information:
- Buyer’s name and address
- Contractor’s name and address
- Contractor’s accreditation and license numbers issued by the Régie du bâtiment du Québec
- Description of the property
- Description of the mandatory nature of the guarantee plan
- Identification of the plan manager (government)
It’s important that you read through the documents offered to you by the builder before you sign to make sure you understand them.
If you are not sure, don’t hesitate to consult with a real estate lawyer to that effect.
Once the property is built, the contract and buyer should perform a pre-acceptance inspection of the residence.
This inspection is performed by the buyer and the contractor who are required to complete a legally mandated checklist of inspection points.
In most cases, the contract fulfils its obligations and delivers the property to the buyer.
However, in some cases, there may be issues or disputes between the parties.
In that case, the buyer may file a claim under the Quebec plan of guarantee.
It’s important for the buyer to file his or her claim within the required timelines to avoid losing any rights or legal protections.
The Regulation Respecting the Guarantee Plan for New Residential Buildings sets out the delays for a buyer to file a claim.
When the contractor fails in its obligation to deliver the property as per the terms of the contract, you may claim:
- The reimbursement of partial payments made to the contractor
- Reimbursement of relocation, storage, and moving costs
- Completion of the work
- Repair of apparent defects and poor workmanship declared in writing at the time of acceptance
- Repair of defects and poor workmanship that are not apparent on acceptance
Your claim can vary if you have done the inspection and already accepted the property or before the acceptance.
Make sure you read the requirements of the plan to understand your legal protections.
Buyer Legal Recourse
Once a claim is filed, there’s a specific process that must be respected by the contract, buyer, and guarantee administrator (government office).
If the dispute is resolved amicably, then the matter is closed.
Otherwise, the matter can proceed to:
If the buyer chooses to file a lawsuit before the common courts in Quebec, the elements brought before the court will no longer be subject to the guarantee offered by the plan.
As a result, it may be worth it for the buyer to pool all the remedies in one single lawsuit before the courts.
Guarantee Plan Brochures
The Government of Quebec, via the guarantee administrator, regularly publishes guides, content and brochures to help guide consumers and buyers of a new construction home.
You can consult a copy of the guides at the following links:
When you sign a contract with a builder for the construction of a new house or condo, the guarantee administrator will send a copy of the brochure to the buyers after the signing of the sales contract.
Quebec Guarantee Plan Takeaways
So what is the Quebec Guarantee Plan?
What type of property does it cover?
How does it work in general?
Let’s look at a summary of our findings.
Home or Condo Guarantee Plan
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