Garantie Construction Résidentielle. Many of you have heard about it, but many entrepreneurs ask the following question … What is the purpose of this guarantee?
For the buyer, this guarantee offers them protections, but in our blog we will cover everything related to the entrepreneur.
What is the GCR / Garantie Construction Residentiel
This mandatory warranty plan ensures the fulfillment of certain obligations on your part and covers the following new residential buildings:
1.1.1 For buildings not held in divided co-ownership – Single-family detached, semi-detached, row house and multi-family building with two to five dwellings
1.1.2 For buildings held in divided co-ownership – Single-family detached, semi-detached, row house and multi-family building of not more than four superimposed private portions. (If the last condo unit is on 2 floors thus giving a building of condos with a total of 5 floors, the building comes under the GCR guarantee).
It is obvious that in order to take advantage of the warranty plan you must first hold an RBQ license and be accepted for accreditation with the GCR.
Accreditation to the GCR involves an initial fee of $ 488.64 (amount in 2020), a personal balance sheet and guarantees which can be provided by bond with the ACQ at; 1-800-956-7526 / APCHQ at 1-855-608-8546 or by letter of guarantee or other (8 options are available to you). The GCR provides entrepreneurs with all the necessary documents on its website in the accreditation section.
As examples for the amounts of the Bond requested;
The Quality Score
The GCR Quality Score scale is between AA and D.
This rating is assessed according to financial ratios, customer satisfaction and the quality of the buildings constructed. Contractors who have not yet had a technical evaluation are temporarily rated N (unlisted).
Technical rating AA
The contractor, wishing to maintain or obtain a technical AA rating, must meet these three criteria:
- Be able to demonstrate the application of at least one practice of excellence per project inspected;
- Obtain an average of at least 91 points in their inspection reports;
- Have not lost a point in their collaboration rating.
The Contractor’s GCR Quality Score is evaluated according to the number of months of contractor’s accreditation:
Less than 36 months: 50% technical rating and 50% financial rating
Over 36 months: 50% technical rating, 40% financial rating and 10% customer satisfaction rating.
In order for GCR to be able to incorporate the customer satisfaction rating to establish the GCR Quality Score, a contractor must have registered at least three buildings having been delivered for at least a year to the GCR Guarantee Plan.
Several factors are taking into account when it comes to the rating given to an entrepreneur. You can preview he list on the GCR website.
The guarantee plan ensures that the contractor must fulfill a number of obligations, and covers the following types of new residential buildings exclusively:
- Detached, semi‑detached or row-type single‑family house
- Multifamily building of two to five units, held in undivided co‑ownership (intergenerational, duplex, triplex, etc.)
- Multifamily building held in divided co‑ownership (condo) of no more than four stacked private portions
- Transformation of buildings
- Building renovations such as extensions, construction on an existing foundation or construction of a non‑adjacent garage to the property
- Condominium buildings that have more than four superimposed private portions
- A home you have built yourself, without the help of a general contractor*
Mandatory listing of new residential buildings constructed for rental purposes
Sometimes, a building constructed for rental purposes may be repurposed in the 24 months following the completion of work, and its units may be sold instead of rented. In the interest of ensuring adequate coverage for buyers and fair treatment for contractors, GCR would like to share with you the procedure for buildings constructed for rental purposes.
Prefabricated homes are subject to certain exceptions:
- If the sales contract is concluded with the manufacturer of a prefabricated home and includes complete home installation (turnkey project), the manufacturer must register the residential unit.
- If the sales contract and installation contract are concluded with the general contractor (turnkey project), the general contractor must register the residential unit.
- If the sales contract is concluded with the manufacturer of the prefabricated home and the installation contract is concluded with a general contractor, only the on-site installation work, by the contractor, is covered by the plan.
Self-built homes are not generally covered by GCR.
Therefore, a self-builder who organizes and coordinates the construction of a new residential building, whether performing the work alone or hiring a specialized contractor to perform it, cannot be covered by the guarantee plan.
The situation changes if the self-builder hires a contractor to organize or coordinate the work fully or partially. In this case, the contractor will be considered to be acting as a general contractor. The contractor must hold a subclass 1.1.1 or 1.1.2 licence, be accredited under the guarantee plan and register the project with GCR (even if the invoice is issued under the name of the self-builder).