Every new home built in Alberta since February 2014 has to be enrolled in a licensed New Home Warranty program. The rule is provincial, the coverage bands are set in legislation, and it is illegal to sell an unenrolled new home. Most homeowners buying a new infill understand this, at least in outline.
Fewer homeowners know that the exact same rule reaches into major renovations, if the renovation crosses a specific threshold. That threshold is what people call the 75 percent rule, and it catches owners off-guard when their builder tells them, halfway through design, that the whole-house renovation they thought they were doing is now a warranty-triggered new-home build.
Here is how it actually works.
The 1-2-5-10 coverage bands
Alberta warranty coverage on a new home has four bands, each tied to a different category of defect. This is set by the Alberta government's New Home Buyer Protection Act.
- 1 year, workmanship and materials. Anything that was not built or installed correctly. Squeaky floors, misaligned doors, drywall cracks past normal settlement, hardware that fails, paint that peels, tile that lifts. This is where most warranty claims live. You have 12 months from possession.
- 2 years, distribution systems. Electrical, plumbing, heating, cooling, and ventilation systems. If the furnace fails, if the HRV underventilates, if a plumbing line is undersized for the fixture, if an electrical circuit is wired to code but does not carry the load the room needs. Two years from possession.
- 5 years, building envelope. Roofing, cladding, windows, exterior wall assemblies, and water penetration. If the roof leaks in year three, if the window seals fail, if the cladding lets water into the wall assembly, this is where the claim lives. Five years from possession.
- 10 years, major structural defect. Foundation, load-bearing framing, and anything that fails structurally to the point where the house is uninhabitable or unsafe. Ten years from possession. The bar is high, and legitimate claims here are rare.
The warranty travels with the house, not the original buyer, so a house sold two years in still has its remaining bands available to the new owner.
What "enrolment" actually means
The builder pays the warranty provider a premium at project start, files the required inspection paperwork through the build, and hands the enrolment certificate to the buyer at possession. The premium on a single-family Edmonton infill in 2026 runs roughly $1,200 to $2,000 depending on price point and warranty provider.
If a warranty claim goes in, the buyer contacts the warranty provider first, not the builder. The provider investigates, decides whether the claim is covered under the applicable band, and, if it is, pays out or requires the builder to remedy. If the builder is still in business, the builder usually does the remedy work. If the builder is out of business, the warranty provider pays another qualified contractor to do it.
This is the whole reason the rule exists. Before 2014, a homeowner whose builder had gone under was on the hook for structural failures a decade after possession. The program exists to socialize that risk.
The 75 percent rule for renovations
Here is what surprises owners.
A renovation is treated as a warranty-triggered new-home build if the work meets, roughly, either of these conditions:
- The total renovation cost is 75 percent or more of the pre-renovation appraised value of the house.
- The renovation replaces or substantially alters more than half of the building envelope, more than half of the load-bearing structure, or more than half of the mechanical systems.
The "or" matters. A whole-house renovation that spends less than 75 percent of appraised value can still trigger warranty if it is deep enough structurally. This is the ANHWP definition of a "new home" via major renovation, and the province's licensed provider list applies the same rule regardless of which provider you enrol with.
In practice this means a $600,000 whole-house renovation on a $800,000 house triggers coverage. So does a $400,000 renovation on the same house that tears out and replaces the entire foundation, framing, and mechanical systems, even though the dollar number is only 50 percent of appraised value.
Why this catches owners off-guard
Because many homeowners assume a renovation is a renovation. They budget for the construction cost, they set aside a contingency, and they do not budget for warranty enrolment. When the builder tells them, in the design phase, that their project is going to need warranty coverage, three things happen at once.
- The premium ($1,200 to $2,000) has to be added to the budget.
- The builder has to be a warranty-registered builder, which not every renovation contractor is.
- The inspection sequence during construction gets stricter, because the warranty provider audits.
The third one is the biggest actual impact. Warranty-registered builds have specific stage inspections that must happen and be signed off before the build can continue. On a straight renovation without warranty, those inspections are the city's building inspector only. On a warranty-triggered renovation, the warranty provider often adds its own inspection layer on top.
The failure mode we see
The failure mode is not the rule itself. It is homeowners who work with a builder who is not warranty-registered, and are told "your project does not need warranty" by that builder, when it does. The reasons a builder might give this answer range from an honest mistake to a real conflict of interest (the builder is not registered and cannot enrol the project even if they wanted to).
Two ways to verify:
- Ask the builder for their warranty provider name and their builder license number. Look them up on the provider's site.
- If in doubt about whether your project crosses the threshold, contact the Alberta New Home Warranty Program directly. There is a compliance line specifically for this question. It is free and the answer is definitive.
The Service Alberta homepage on new home warranty has the current phone and email.
What is NOT covered, even inside coverage bands
Worth knowing.
- Normal wear and tear.
- Damage from misuse or neglect. A furnace that fails because the filter was never changed is not a warranty claim.
- Damage from unauthorized alterations. If you rip open a wall and modify the electrical, subsequent electrical failures are not covered.
- Damage from lack of maintenance. A roof that fails at year 7 because the eavestroughs were never cleaned is not a warranty claim.
- Damage from natural disasters, insurable events, or third-party damage.
- Small settlement cracks in drywall (usually excluded past year 1 as normal drying).
- Appliances (covered by the appliance manufacturer's own warranty).
What owners should file at possession
Two documents, in a folder that stays with the house:
- The warranty enrolment certificate from the provider, in your name.
- The possession punch list, dated and signed, listing every item the builder committed to fix within the first 30 days.
These two documents are what a warranty claim rests on. Everything else (photos, receipts, records of communication with the builder) helps, but these two are the anchor. If you sell the house before the warranty bands run out, both documents transfer with the property.
For a broader view of what a compliant infill build should include, see our Edmonton infill cost pillar, and for what "licensed contractor" actually means in Alberta, read WCB and licensed contractor in Edmonton renovation.