The guarantee plan for new residential buildings: the exclusions to the regulation

For buildings that are subject to Regulation on the guarantee plan for new residential buildings, the regulated guarantee plan is mandatory. Knowing that the definition of the term “building” in the Regulation includes not only the building itself, but also the facilities and equipment necessary for its use¹, it should be noted that the Regulation also specifically excludes certain elements or types of problems that beneficiaries may face.

The entire list of excluded elements is found in sections 12 and 29 of the Regulation². Without listing the entire list, we think it is appropriate to comment on five exclusions frequently applied by warranty plan administrators to the best of our knowledge to declare a claim ineligible for warranty coverage:

1) Repairs of defects in materials and equipment supplied and installed by the beneficiary.

Commentary : For this exclusion to apply, the materials must have been supplied and installed by the beneficiary.

2) Repairs made necessary by normal material behavior such as cracks and shrinkage.

Commentary : For example, “shrinkage cracks” in gypsum cladding that may result from the drying out of the framework in the first few months after construction of the building are generally excluded, depending on the size of the cracks in question. As for this exclusion, the Regulation specifies that it does not apply if the contractor has failed to comply with the rules of the art or with a standard in force applicable to the building.

3) Repairs made necessary by the fault of the beneficiary such as inadequate maintenance, the misuse of the building as well as those resulting from removals, modifications or additions made by the beneficiary.

Commentary : This exclusion requires a clear demonstration of the beneficiary's fault and of the causal link with the impairment in order to be applicable to a claim. Non-compliance by a contractor with its obligation to provide information and advice may also play a role in the application of this exclusion: for example, it can be assumed that a contractor who does not sufficiently inform beneficiaries of the importance of controlling indoor humidity and of its impact on materials could be forced to make certain corrections if the lack of control and knowledge of the beneficiaries on the subject.

4) Parking spaces and storage spaces located outside the building where the residential units are located and any structures located outside the building such as swimming pools, earthworks, sidewalks, driveways and the land surface water drainage system except for the negative slope of the land.

Commentary : As mentioned in the introduction, the warranty covers the building as well as the installations and equipment necessary for its use. In short, what is outside the building is generally excluded. On the other hand, a contractor has already been ordered to carry out corrective work on an access ramp made of embankment and paving stone since, depending on the configuration of the premises, the arbitrator decided that this ramp was an integral part of the building³. Each case remains a case in point.

5) The claims of the persons who participated in the construction of the building.

Commentary : The legislator has chosen not to provide security coverage for the claims of persons who participated in the construction of the building. In plain terms, the administrator does not have to deal with claims about the legal mortgages of subcontractors or the contractor.

All in all, although the Legislator has taken care to exclude certain elements from warranty coverage, the fact remains that the administrator, and potentially the Arbitral Tribunal, must exercise judgment in the reasoning leading to the acceptance or exclusion of a claim, each case being a case in point.

Finally, it should be borne in mind that in the event that a claim is excluded from the coverage of the warranty plan for new residential buildings, the contractor is not out of business since nothing prevents the parties from going to the civil courts to have the situation corrected.

Did you know that?
The administrator must send to the beneficiary, as soon as the application for registration of the building is received or, as soon as the beneficiary is known, the explanatory document on the application of the Regulation prepared by the Régie du Bâtiment du Québec.

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