When you purchase a newly constructed freehold home or condominium unit, you are entitled to warranty coverage that begins as soon as you take possession which is known as coverage after possession. This coverage is divided into three distinct time periods: 1 year, 2 years, and 7 years, each offering protection for specific issues. Here’s a summary of what each timeframe covers:
One-Year Warranty
The one-year warranty starts on the date you take possession of your new home and lasts for one year. It includes protection against:
- Defects in workmanship and materials.
- Unauthorized substitutions of materials.
- Violations of the Ontario Building Code.
- Ensuring the home is suitable for habitation.
Two-Year Warranty
The two-year warranty also begins on the date of possession and covers:
- Water penetration through basement or foundation walls.
- Defects in workmanship or materials causing water penetration in the building envelope.
- Defects in exterior cladding (e.g., brickwork, siding) that lead to detachment, displacement, or deterioration.
- Defects in electrical, plumbing, and heating delivery and distribution systems.
- Violations of the Ontario Building Code that impact health and safety.
Seven-Year Major Structural Defect (MSD) Warranty
The seven-year MSD warranty protects against major structural defects from the date of possession until the seventh anniversary. This includes:
- Failure of load-bearing structural elements.
- Significant impairment of a load-bearing element’s ability to support normal structural loads.
The seven-year MSD warranty covers substantial damage from:
- Soil movement and major cracks in basement walls.
- Chemical failures of materials and environmental hazards (e.g., excessive radon levels).
- Collapse or severe distortion of joints or roof structure.
Additional Coverages
Extended Warranty for Missing Items
If certain items are missing when you take possession of your home, your builder must extend the warranty for those items. The extended warranty:
- Applies to items completely absent on the possession date.
- Begins on the date the missing item is installed and lasts for one year or more, depending on the new home warranty’s duration.
You must report missing items to Tarion using a warranty form within the first year of possession.
Temporary Relocation Allowance
If your home becomes uninhabitable due to a warranted issue, you may receive a Temporary Relocation Allowance to cover expenses like temporary accommodation, food, or storage. The allowance provides up to $150 per day, with a maximum of $15,000, if:
- The kitchen is unusable.
- All toilets and/or bathtubs/showers are unusable.
- The staircase to the upper floor is unsafe.
- The structural integrity of the home is compromised.
- There is toxic mold or another harmful substance.
Items Not Covered by the Warranty
The new home warranty does not cover certain conditions, such as:
- Defects in materials, design, and work provided by the homeowner.
- Secondary damage resulting from warranty-covered defects (e.g., property damage, personal injury).
- Normal wear and tear.
- Natural shrinkage of materials due to drying.
- Damage from dampness or condensation due to inadequate ventilation.
- Damage caused by the homeowner or visitors.
- Alterations, deletions, or additions made by the homeowner.
- Settlement of land around the building, except under the building’s footings.
- Contractual warranties outside the scope of the Ontario New Home Warranties Plan Act.
- Damage from insects or rodents, unless the construction does not meet Ontario Building Code specifications.
- Damage from municipal services or other utilities.
- Surface defects in work and materials accepted in writing by the homeowner at possession.
For detailed information on exclusions and eligibility, refer to the Home Construction Regulatory Authority (HCRA) advisory.