Legislation to Protect Purchase Deposits on New Homes Under Construction

The Homeowner Protection Act introduced today, Nov. 7, offers deposit protection to Nova Scotians who enter into construction agreements for new homes.

The act is the first of a series of measures the province will be undertaking to improve homeowner protection.

"The is the first step in developing a comprehensive approach to protecting buyers of new homes," said Jamie Muir, Minister of Service Nova Scotia and Municipal Relations. "It's very clear we need a mechanism to protect consumers' purchase deposits on homes not yet completed."

An independent review of homeowner protection was recently completed at the request of government. It investigated concerns relating to insufficient purchase deposit protection, poor construction workmanship, water penetration, construction deficiencies, and the perceived lack of recourse for homebuyers.

The review was undertaken by an independent consultant, Novus Consulting Group, and included extensive consultation with industry, a review of other jurisdictions, and public consultations.

The consultant's final report identified problems largely within the condominium sector.

It also included eight recommendations to improve homeowner protection. One of the recommendations forms the basis of the new legislation.

"If this legislation is passed, Nova Scotians who purchase residential units that are in the construction phase will have their deposits placed in trust, thereby reducing the potential financial loss to consumers," said Mr. Muir.

Other recommendations include creating a registry of builders and developers; a mandatory home warranty program for at least all newly constructed condominiums; mandatory inspections by independent inspectors of condominium buildings more than three storeys for water penetration and building envelope failure; and homebuyer education.

The province will be working with industry to develop consumer education materials for buyers of new homes.

Government is currently analyzing the other recommendations to determine the full implication of each one and to determine next steps.

The New Homeowner Protection Final Report is available on the Service Nova Scotia and Municipal Relations website at www.gov.ns.ca/snsmr .