A Manitoba homeowner found out the hard way that when he needed his new home warranty, he could not rely on it.
"If anyone asked me for my opinion on the home warranty program, I'd say, 'Save your money and hire somebody that can keep an eye on the builders … so it's done properly,'" Bill Hopkins told CBC News in an interview.
Hopkins and his wife, Christa, chose to build a new home in Lorette, Man., where they could raise their two young sons in a small-town setting.
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They decided to build a modest bungalow with Ventura Custom Homes Ltd. of Winnipeg, and the family moved into their new home in 2006.
Hopkins said the idea of building from scratch was exciting and appealing because everything would be brand new.
"It's a secure feeling. It's a new home; you're not going to have any major issues with it," Hopkins said.
Four years later, they uncovered a mystery — and a major problem — in the living room wall.
"My son had dropped a toy behind the sofa, and at the time there was carpet on the floor. So we pulled the sofa out so he could retrieve his toy," Hopkins explained.
"He walked behind the sofa to get his toy. When he came back out, his socks were soaking wet."
Hopkins discovered the wall was saturated. He began to investigate the source of the water and contacted the builder.
'It was just mush'
Ventura advised that it was only liable for defective materials or workmanship for the first year after possession.
"Their response was basically, 'Your one-year warranty has expired with us on this date, and you have to direct any concerns to the National Home Warranty Program,'" Hopkins said.
From there, he said the experience was as if he was bounced like a ping pong ball between the builder and the warranty company.
Hopkins said a Winnipeg representative of National Home Warranty Program told him the source of the problem was likely windows leaking due to improper caulking.
The Hopkins began to tear the wall apart and found the problem to be extensive.
"I took my hand and pushed it through the sheathing on the house. Right through. And I grabbed it and it was just mush," he said.
The family hired a home inspector, whose report concluded that water had been leaking in since the house was built, resulting in moderate to severe mould growth.
The home inspector reported that when the house was built, the water-resistant sheathing paper had not been installed all the way to the top of the wall, allowing rain to infiltrate the building.
The report also said the bottom half of the wall was constructed from "buffalo board," a product no longer available in the marketplace because it was discontinued from use about four years earlier.
"If it gets wet, it basically responds the same way as a cardboard box. It doesn't take much moisture contact for the product to swell and deteriorate," the report states in part.
Several types of mould identified
The mould was of particular concern to the Hopkins, especially since one of their children has asthma.
The home inspector had air quality tests done at a laboratory, which found the presence of several types of mould that could be harmful to health.
"I let my family down," Hopkins said. "I put their health at risk."
National Home Warranty sent a letter to the Hopkins in December 2010, informing them their home still had coverage under the five-year structural defect portion of the warranty.
However, the warranty company denied coverage in this case because it said it did not consider the problems in the Hopkins's house to be a structural defect.
Since neither the builder nor the National Home Warranty Program would cover the repairs, the Hopkins filed a lawsuit in 2011 to try to recover the money they have spent fixing the problem.
Hopkins said he has paid about $32,000 out of pocket on repairs, plus he's put in his own family's labour.
He estimates the cost at about $50,000.
"I'm not looking to get rich here and make extra money … I just wanted it fixed," he said.
Ventura Custom Homes general manager Glenda Sobie declined an interview request by CBC News, saying it would be inappropriate to comment while the matter is before the courts.
Court case awaiting decision
In its statement of defence, Ventura denied the water seepage was the result of faulty materials or workmanship.
The company also said it was only liable for defects during the first year after the Hopkins took possession of the house.
Ventura's defence also faulted the Hopkins for failing to mitigate the damage from the water getting into the house.
Ventura said the home purchase agreement obligated the Hopkins to send any disputes to an arbitration process rather than file a lawsuit.
Manitoba Court of Queen's Bench Chief Justice Glenn Joyal rejected that argument by Ventura on arbitration in November 2011 and ruled in favour of the Hopkins.
Ventura has appealed, and the case is awaiting a decision from the Manitoba Court of Appeal.
In a counter-claim, the company says it has been harmed by the Hopkins in that Ventura "…has incurred and been put to much trouble, inconvenience, delay and loss in its business and reputation."
The National Home Warranty Program, a division of Aviva Canada, is not a defendant in the lawsuit.
Glenn Cooper, a spokesman for Aviva Canada in Toronto, said he cannot comment on individual claims for privacy reasons.
Warranty coverage differs among provinces
Cooper said in general, coverage for water penetration on a new home in Manitoba is one year, which he said is standard among warranty providers.
But in British Columbia, National Home Warranty offers five-year coverage for unintended water penetration.
The company's warranty program offers different coverage in different provinces, Cooper explained, because provincial guidelines and regulations differ.
He said the cost of a home warranty varies, but the builder is typically charged less than $1,000, which is reflective of the fact that it is a limited warranty.
The Manitoba government has introduced a plan to make new home warranties mandatory, as they are in other provinces such as B.C., Ontario and Quebec.
But even with the legislation being proposed, the Hopkins might not have benefitted since they didn't discover the water damage concealed in the wall until four years after they moved into their house.
Manitoba's proposal would require coverage for water penetration for a period of two years.
Bill Hopkins said he thinks the coverage should be the same in all provinces.
He also believes Manitoba legislators should make it mandatory that when a dispute arises between a homeowner and a warranty company, an independent, unbiased inspector should determine whether the warranty will cover the problem.
Hopkins claimed that an official with his warranty company told him that in order for the warranty to kick in, the house would have to "shift off its foundation," and the likelihood of that happening was nil.
Hopkins said he was disappointed that neither the builder nor the warranty company sent anyone to look at the house once the water problem was discovered.
"I wanted somebody to come out and take a look at this, from either the builder or the home warranty program, and neither one would take the time to come out to see what I was talking about," he said.
"They should be ashamed of themselves."