Many people in the real estate and construction communities are familiar with HPO 3rd party warranty requirements for newly constructed homes as legislated by the Homeowner Protection Act. The “2-5-10” new home warranty is what we expect to see when any new home hits the market.
However, there often can be some dispute over how the Act applies to existing buildings undergoing renovations or changes of use. The HPO refers to “Substantially Reconstructed Homes” as the tipping point to where a renovation to an existing house crosses the threshold to where it is effectively considered a new house and thus requiring enrollment in the warranty program. Below is a link to an informative article which outlines the criteria for where this threshold is met. This may serve as a good reminder for many, but you also may be surprised what type of renovation constitutes a new build in the eyes of the HPO. There are many other anomalies that trigger the requirements as well:
A great example is a heritage conversion. We are involved with a house constructed over 100 years ago as a single family residence, and converted to 8 “light housekeeping units” in the 80’s (housekeeping units are individual rooms that share kitchen and bathroom facilities). At current, the current project proposes to convert the house to 4 self contained dwelling units as a non-stratified 4-plex. While the previous use allowed for 8 housekeeping suites, they are not considered as ‘dwelling units’ and thus our conversion from 8 housekeeping units to 4 dwelling units was actually considered as an increase in the number of units in the building. Once a project increases the number of dwelling units it is treated as a new house.
So, we have an over 100 year old house where we are not touching the exterior shell at all, and it is considered a ‘new house’ with the HPO. Obviously the concern is instances where heritage conversions are stratified, and the units sold off (not the case for us), but still an interesting example of what is considered a new build!