Tarion New Home Warranty Program
Tarion is a private corporation that regulates home new builders and protects the rights of new home buyers through the provisions set out in the Ontario New Home Warranties Plan Act. The Tarion New Home Warranty Program provides coverage to new homes and condominiums for certain losses and defects and promotes repairs to construction, electrical, plumbing, and common areas in condominiums.
The Tarion New Home Warranty coverage for a new home takes effect from the date of closing. For a new condominium, it comes into effect from the date of available occupancy. The warranty provides for a maximum coverage of $150,000.00 for a new residence.
- Deposit Protection – Purchasers of new homes are protected against financial loss including the deposit if the sale is not completed through no fault of the purchaser. Coverage for up to a maximum amount of $20,000.00 is provided if the Agreement of Sale and Purchase is signed before February 1, 2003; and for a maximum amount of $40,000.00 thereafter. For new condominiums the maximum amount is $20,000.00 since buyers are protected under the Trust and Excess Deposit provision of the Condominium Act, 1998 for deposits over $20,000.00.
- Protection against Delayed Closing of New Homes and Condominiums – Incase of closing delays the builder is required to notify the purchaser in writing. Without written notice, the purchaser can claim compensation for out-of-pocket expenses. A purchaser can only file a claim once he or she is the owner. A builder is allowed to extend the closing date once for a maximum of 120 days by notifying the purchaser at least 65 days prior to the original date of closing. If the closing is extended for 15 days or less the builder is required to notify the purchaser at least 35 days in advance, and if a delay of more than 15 days is expected then the builder must notify the purchaser at least 65 days in advance and set a new closing date. The builder is given a grace period of up to 5 days for closing delays beyond which he is to compensate the purchaser for up to $100 per day for living expenses and other related costs up to a maximum amount of $5000. Contact your lawyer to find out more about filing a claim under the Tarion New Home Warranty Program.
- One Year Warranty Coverage – The Tarion New Home Warranty Program warrants that the home meets the Ontario Building Code requirements for one year from the date of available occupancy and is free from flaws in workmanship and defects in materials and is fit for habitation. Any defects must be reported in writing to Tarion and the builder before the end of the first year. The following items are covered under the one year warranty protection:
- Walls or Ceilings-Shrinkage cracks and corner beading splits are covered only once in the one year period.
- Electrical- Defective materials or improper installation of wiring, light switches, electrical panel and breakers are covered.
- Plumbing- Defective materials or improper installation of copper pipes, soldered joints, drains and shut-off valves are covered.
- Doors- Deformed interior doors not including closet or cabinet doors are covered under the one year warranty.
- Kitchen and bathroom ventilation, fans are covered for defects in performance, provided the purchaser has properly removed built-up grease and dirt.
- Two Year Warranty Coverage – The two-year warranty applies to homes enrolled on or after January 1, 1991 and provides coverage against:
- Losses due to water seepage in the basement or foundation walls in a home or underground areas like a parking garage for a condominium.
- Losses due to defective materials and workmanship including caulking, or doors or windows that fail to prevent water seepage.
- Defective work and materials in electrical, plumbing or heating systems.
- Damage to exterior cladding of the building due to defective materials and workmanship.
- Breaches of the Ontario Building Code’s Health and Safety provisions.
- Seven Year Warranty Coverage – For homes enrolled on or after January 1, 1991 there is a seven year protection against losses due to major structural defects. The Ontario New Home Warranties Plan Act defines a ‘major structural defect’ as “any defect in materials or work that results in the failure of a load-bearing part of the home’s structure, or any defect in materials or work that significantly and adversely affects the use of the building as a home.”
- Defects in any upgrades installed by the home owner.
- Any secondary damage that may include damage to person or property caused by losses that are covered under the warranty itself.
- Normal shrinkage of materials and settling of soil around the house.
- Damage caused due to natural catastrophies, municipal services, and rodents or insects, except where construction does not meet the Ontario Building Code..
- Damages caused due to homeowner’s negligence in maintenance, or damage caused by tenants or guests.
- Damages noted in writing and accepted by the owner prior to possession.
An inspection of the property should be arranged between the purchaser and the builder prior to closing. Any defects should be noted and brought to the notice of the builder and Tarion in writing. The purchaser is required to complete a Certificate of Completion and Possession which is sent to Tarion by the builder. The purchaser gets an additional period of 30 days to report any defects that he or she might have missed earlier on the 30 day report form. Any claims should be made in writing before the expiry date of the applicable warranty.