According to Ontario law, every new home must have a warranty from the builder. Tarion makes sure that people who buy new homes in Ontario get all the protection they were promised by their builder. This warranty gives financial protection before you move in and covers any problems with the construction after you move in. This warranty protects buyers and owners of new Freehold and Condominium properties up to 7 years from time of possession.
How it works and who provides the warranty?
A new home built by a builder or vendor licensed under HCRA qualifies if it meets specific criteria outlined in the ONHWP Act. These criteria define what constitutes a “home,” “vendor,” “builder,” and “owner,” as detailed on the HCRA website. The warranty coverage starts when you sign the Agreement of Purchase & Sale and remains valid for up to 7 years after possession, even if the ownership is transferred during this period.
Summary of Coverage Before You Take Possession:
1. Deposit Protection:
– Protects your deposit if the builder goes bankrupt, breaches the purchase agreement, or if you have statutory rights to terminate.
– Coverage limits vary based on when the purchase agreement was signed and the purchase price.
2. Delayed Closing/Occupancy Coverage:
– Ensures compensation if the builder fails to meet the agreed-upon occupancy or closing date.
– Builders must offer compensation if they miss these dates without valid reasons (e.g., strikes, fire).
For more detailed article on coverages before Possession click here.
Summary of Coverage After You Take Possession:
The warranty period is divided into three phases:
1. One-Year Warranty:
– Covers defects in workmanship and materials, as well as unauthorized substitutions.
– Protects against violations of the Ontario Building Code.
– Applies for one year from the date you take possession, regardless of ownership changes.
2. Two-Year Warranty:
– Covers water penetration issues in the building envelope.
– Protects against defects in plumbing, electrical, and heating systems.
– Applies for two years from the date you take possession.
3. Seven-Year Major Structural Defects (MSD) Warranty:
– Covers major structural defects that compromise the building’s integrity.
– Covers substantial damage resulting from soil movement, structural cracks, or failure of load-bearing elements.
– Applies for seven years from the date you take possession.
For more detailed article on coverages after Possession click here.
Additional Coverages:
1. Extended Warranty for Missing Items:
– If your home lacks certain items upon possession, their warranty coverage starts once installed.
– Must report the absence within the first year of possession.
2. Temporary Relocation Allowance:
– Provides compensation for temporary accommodations if your home becomes uninhabitable due to a warranted issue.
Exclusions:
Certain conditions and items are not covered under the warranty, such as normal wear and tear, damage caused by the homeowner, alterations not approved by the builder, and damage from insects or rodents.
How It Works:
– The warranty starts when you sign the purchase agreement and continues for up to seven years after taking possession of your home.
– Builders are obligated to pay an enrollment fee to Tarion and must comply with specific timelines and notice requirements for occupancy and closing dates. Builders will charge the enrolment fees to the purchaser on final closing.
– Compensation for delays in occupancy or closing is provided to the homeowner if deadlines are not met, subject to certain conditions.
In essence, Tarion ensures that buyers of new homes in Ontario are protected financially and legally, both before and after taking possession, against defects and delays as outlined by provincial regulations.