Regulation on the guarantee plan for new residential buildings — Reasonable period

The amendments to Regulation on the guarantee plan for new residential buildings, which came into force on 1 January 2015, amended the guarantee plan. Some amendments, such as those concerning warranty limits, are obvious. Others are more subtle, although their impact is just as important. This is the case with the amendments relating to the denunciation period, where we are now talking about reasonable time. What exactly is the situation?

Before the amendments came into force, it should be noted that Regulation (1) provided that in order to be eligible for warranty coverage, defects in workmanship, hidden defects and construction defects must in particular be reported in writing to the contractor and to the administrator within a reasonable period of time, which could not exceed 6 months from their discovery or their first occurrence in the event of gradual defects or losses. However, since the entry into force of the amendments, Regulation (2) provides that the period for denunciation must be reasonable without providing for a maximum duration for this period. So the mention of the 6 months is over.

In short, since 1 January 2015, the reporting period must be reasonable, whereas previously this reasonable period could not exceed 6 months (3).

This means that the legislator has made the choice that the Regulation, in its new version, now includes the concept of a reasonable period of notice provided for in the Civil Code of Quebec with respect to the guarantee of quality, whereas in the old versions, it determined a maximum period of time.

We must then turn to the case law emanating from civil courts to determine the rationality of a delay in reporting in a case where the Regulations are implemented.

To this end, although there is a certain consensus on a period of 6 months in real estate matters, the courts consider that this is a question of assessment on a case-by-case basis that must take into account all the circumstances specific to each case (5). The decision-maker must therefore in particular consider whether or not the objective sought by the imposition of a reasonable period of time has been achieved, namely to allow the seller to verify whether there is in fact the presence of a defect covered by the warranty, assess its extent and assess the extent of the defect and assess the possible corrective measures. In addition, he must take into consideration whether the delay caused real harm to the seller (6) in order to qualify the delay as reasonable or not (7). Thus, doctrine and case law place the reasonable period of denunciation within a range that should not exceed six months to one year, depending on the circumstances (8).

Moreover, it is from this perspective that the legislator has also chosen to codify the principle of the assessment of circumstances by adding a second paragraph to section 19.1 of the Regulation which provides for precisely this assessment by the decision-maker, in particular the representations of the contractor or the administrator.

In conclusion, knowing that the determination of reasonably is the result of an assessment of circumstances and facts, anyone faced with a question concerning a whistleblowing period should themselves act reasonably and, if necessary, consult a legal professional.

DID YOU KNOW THAT?
Did the amendments to the Regulation on the Guarantee Plan for New Residential Buildings, which came into force on 1 January 2015, also introduced warranty coverage for relocation, moving and storage after taking possession if the building is no longer habitable due to corrective work as well as warranty coverage for rehabilitation and material damage caused by corrective work? (Sections 10 (6), 10 (7), 27 (6) and 27 (7) of the New Residential Buildings Guarantee Plan Regulation).

(1) Sections 10 and 27 of the previous version of the New Residential Buildings Guarantee Plan Regulation.
(2) Sections 10 and 27 of the most recent version of the New Residential Buildings Guarantee Plan Regulation.
(3) SDC lot 3 977 437 v. Mikalin Management Limited, Me Morissette, GAMM 2013-15-11.
(4) Ibid.
(5) Leblanc v. Dupuy, 2014 QCCS 3226.
(6) Ibid.
(7) Without wanting to comment too much on the issue, it can be assumed that the failure to report within a short period of time that would result in additional or irreversible damage would qualify this delay as unreasonable.
(8) Ménard v. Girard, 2013 QCCS 5030.

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