Compliance with plans and Regulation on the guarantee plan for new residential buildings

In the field of residential construction, materials and a vacant lot will become a living environment for people who will live in the finished product: a housing unit. Obviously, the construction of a housing unit does not happen overnight. We follow steps and above all, we refer to plans. Sometimes you get away from it. What happens in these cases, namely, is compliance with plans subject to warranty coverage under the Regulation on the guarantee plan for new residential buildings ?

First of all, you should know that there are civil remedies before the ordinary courts, which are based on the Civil Code of Quebec on the one hand, and claims under the Regulation that are decided by the administrator and ultimately by an arbitrator on the other. Consequently, the eligibility of a situation for coverage under the Regulation does not necessarily result in liability in a civil proceeding; the opposite is also true. Since the issue of compliance with plans is based on a certain gray area, the aim of this column is to clarify this question based on the Regulation only.

To illustrate our remarks, let's look at a recent decision¹ whose important facts are the following: following the inspection of the common areas of a building held in co-ownership, the syndicate of co-owners denounced a non-compliance with the initial plans given to it in the condominium register, namely that the insulation installed in the garage did not correspond to what was provided for in the plans. The administrator having indicated that the situation was not eligible for warranty coverage, the case was referred to arbitration.

At the hearing, it was shown that the requirements of Regulation on energy conservation in new buildings were respected and that the contractor had chosen to substitute materials for those planned in order to reduce construction costs. In short, the materials used were less expensive and offered a performance that met the standards although this performance was below that of the materials initially planned. The entrepreneur therefore made the choice not to follow his plans on this point for the sake of economy.

The issue of compliance with the standards was essential, because in the context of the application of the Regulation, a situation, in order to be eligible for warranty coverage, must correspond to a defect (apparent or not), a hidden defect or a construction defect. Knowing that the standards were met, since the work was not flawed, but simply different from what was planned, the arbitrator had to limit himself to considering the question of the contractor's obligation to comply with the plans and specifications.

However, in this case, because the said plans of the common portions had never been consulted by the co-owners before their purchase, it could not be concluded that full compliance with these plans was an essential condition for the purchasers and that, therefore, the contractor had no contractual obligation to comply 100% with the original plans and specifications.

In short, because the syndicate was unable to demonstrate that the modification made the building non-compliant and that the contractor had to fully comply with the plans, it was not able to benefit from warranty coverage. Obviously, the situation could have been quite different if it were a single-family home where the contractor would have been hired to carry out a business contract according to plans provided by the beneficiaries...

Since it is said that prevention is better than cure, in order to avoid this type of claim, the contractor will have an interest in always complying with the standards in the event of material substitution and, as far as possible, in notifying his customers of the changes.

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.

¹ Promenade du Golf Co-Owners Syndicate 4 804 433 and 9211-4388 Quebec Inc. Me Jean Doyle, arbitrator, Customized Arbitration and Mediation Group (GAMM), 2015-16-002, 2016-02-19.

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