Tarion New Home Warranty Program

Real Estate Lawyers Mississauga

TARION: New Home Warranty

The Ontario New Home Warranties Plan Act states that all builders have to provide statutory warranty coverage in Ontario. Tarion delivers new home warranty protection for all new homes sold including single, multiple and condominium residential properties.

When does the Tarion New Home Warranty Coverage Start?

For single or multi-residential units, the coverage begins from the date of closing.

In the case of a condominium, the coverage takes effect from the date of occupancy. All shared areas in the condominiums, are included from the date of registration of the condo corporation. These areas are known as common elements. Typically, the registration happens a couple or more months post-occupancy.

What Is the Deposit Protection Offered to Home Buyers?

Once deposit is paid, the deposit coverage is deemed to begin. For freehold home purchases, the total coverage of the financial loss and the deposit is up to a maximum of $40,000. This is valid if the builder does not complete the sale and there is no fault of the purchaser. For purchase agreements signed before February 1, 2003, the coverage is up to $20,000.

Deposits for new condominium purchased are protected up to $20,000 by the excess deposit and trust clauses in the Condominium Act, 1998.

Provisions Under One-Year Warranty Protection

Under this program, the home is warranted to be fit to live in and free from any material defects and defects resulting from poor workmanship. It is also warranted that; the home meets the Ontario Building Code requirements for one year from the date since the purchaser is entitled to occupy.

Any defects identified, should be informed in writing to the builder and Tarion. The claim can be disallowed if the notice is not received in writing.

All manufacturer, subcontractor and supplier warranties in excess of one year are passed on to the homebuyer by the builder. Related claims should be made directly to the manufacturer.

Walls/Ceilings – In one year, repairs are done as a courtesy only once for shrinkage cracks due to settling, and corner bead splits. Repairs done are exclusive of any replacement, upgrades or repainting.

Electrical – The warranty covers material defects or defects in wiring installation, light switches, duplex outlets, electrical panel, and breakers. If the homeowner makes any additions or alterations to the electrical system, this warranty gets voided.

Plumbing – The warranty covers material defects, improper installation for all copper piping, drains, soldered joints. Homeowner caused plumbing blockages are not covered under this warranty. Manufacturer’s warranty covers plumbing fixtures and faucets finishes. Reasonable operation of faucets is covered under extended warranty clauses from the manufacturer.

Doors – Ill-fitting and warped interior doors are included except any cabinet and closet sliders. Any shrinkage or expansion due to the weather elements corrects itself in the first year.

Ventilation Fans – Kitchen/stove hood fan, bathroom fan is covered if adequate care has been taken to keep the filters/fans free of grease and dirt build up

Appliances- for all appliances, the manufacturer warranty applies

Common Elements and Exclusive Use Common Elements

In condominiums, the shared areas of the building known as common elements are included in the warranty coverage. Individual suite warranty does not cover the common elements as defined by description and declaration. These issues should be routed to the Board of Directors through property management representatives with a copy to your customer service representative.

Provisions of The Two-Year Warranty Protection

This program warrants all homes enrolled on or after January 1, 1991, against:

  • Seepage of water through foundation walls or basement (for condominiums, all areas below ground would be covered inclusive of parking garages)
  • Material defects and work done to prevent water penetration in the building envelope including caulking, windows, and doors
  • Material defects and all works done in plumbing, electrical, heating systems
  • Material defects and work done which resulted in displacement, detachment or deterioration of exterior cladding
  • Any violations of health and safety provisions of the Ontario Building Code

Provisions of the Seven-Year Warranty Protection

In this protection program, all homes are protected against major structural defects for seven years. The enrollment for the homes should be on or after January 1, 1991.

As per the Ontario New Home Warranties Plan Act, a major structural defect includes defective work resulting in failure of a load-bearing part of the home’s structure, material defect or work which affects the building’s use as a home.

Tarion Warranty Program Limitations

Tarion warranty obligations are limited to the time periods, and specific repairs as expressly mentioned. Any other obligation or responsibility is not implied.

Tarion will not be held responsible for any secondary, indirect or consequential damage attributed to defects applied by repair obligations including without limitation to, damage to chattels, improvements made by anyone except the developer’s authorized representative and the property of the owner.

Tarion Home Warranty Program Exclusions

Homebuyers should be aware of the exclusions under the Tarion Home Warranty Program:

  • All defects in design, materials, and work done, supplied or installed by the Homeowner/Purchase (includes flooring, cabinets, and painting)
  • Secondary damage to person or property resulting from defects under warranty. (Homeowner’s insurance may cover secondary damage separately)
  • Normal material shrinkage and wear and tear from drying out after construction
  • Any damage caused by tenants, guests or homeowner negligence and lack of maintenance
  • Any additions, alterations made by the homeowner
  • Damage caused by soil settlement around the building, utility areas
  • Rodent, insect originated damage unless the construction fails to meet the Ontario Building Code
  • Any damage beyond the control of homeowner including floods, acts of God, wars, riots, and vandalism
  • Any damage resulting from utilities or municipal services
  • Any work or material defects noted and accepted in writing by the homeowner at the time of taking possession
  • Any home lived in or rented before the sale
  • Home purchased, without warranty coverage from receiver or trustee

Protection for Freehold Buyers Against Delayed Closing

If needed, the builder gives written notice to extend closing date up to 120 days. They can do this anytime before closing. If the builder does not provide a written notice of delay, you can claim compensation for out-of-pocket expenses. The compensation claim can be made, once you become the home owner.

The builder is allowed 5 days extension of closing date without penalty. The builder has to compensate you for any extensions beyond this grace period. The compensation can include living expenses up to $100 a day plus direct costs resulting from the delay up to a maximum of $5000.

Completing the purchase is essential for any compensation to be paid. Keep the expense receipts and connect with the Tarion Officer for any queries. Written claim should be submitted to Tarion within the one- year warranty period.

Protection for Condominium Buyers Against Delayed Occupancy

For all sale and purchase agreements signed on or after April 1, 1991, the builder can extend the date of confirmed occupancy up to 120 days. The written notice has to be given to homebuyers at least 65 days before the confirmation date. With 35 days written notice, builders are allowed a 15-day extension.

The builder is allowed 5 days extension of closing date without penalty. The builder has to compensate you for any extensions beyond this grace period. The compensation can include living expenses up to $100 a day plus direct costs resulting from the delay up to a maximum of $5000.

Resolving Complaints

Complaints need to be made in writing to your builder and Tarion within the end of the warranty period. For the first 30 days after the closing, the Tarion’s 30-day Form should be used for requesting repairs of new items and items in the PDI Form. For the last 30 days of the first year, a single Year End form can be submitted by the Homeowner for any additional defects.

Make sure all communication is done in writing, and their copies are maintained. Each letter should adequately describe the problem and request the builder to make corrections. For condominiums, problems related to common elements should be brought to the notice of the Board of Directors, who then contact the builder and Tarion for resolutions.

Tarion Fees:

Enrollment Fee Calculation Table (Effective January1, 2018)
All Homes (Freehold and Condominium Unit)
Tarion’s no. – 121546931 RT0001
Sale Price* Range (Excluding HST) Unit Enrolment Fee + 13%HST = Total Enrolment Fee
0 to $100,000 $385.00+$50.05 =$435.05
>$100.000-$150.000 $430.00 +$55.90 =$485.90
>$150.000-$200.000 $500.00 +$65.00 =$565.00
>$200.000-$250.000 $570.00 +$74.10 =$644.10
>$250.000-$300.000 $640.00 +$83.20 =$723.20
>$300.000-$350.000 $710.00 +$92.30 =$802.30
>$350,000-$400.000 $780.00 +$10L40 =$881.40
>$400,000-$450.000 $870.00 +$113.10=$983.10
>$450,000-$500.000 $945.00 +$122.85=$1067.85
>$500,000-$550.000 $1,025.00 +$133.25=$1158.25
>$550,000-$600,000 $1,075.00 +$139.75=$1214.75
>$600,000-$650.000 $1,130.00 +$146.90=$1276.90
>$650,000-$700.000 $1,210.00 +$157.30=$1367.30
>$700,000-$750.000 $1,260.00 +$163.80=$1423.80
>$750,000-$800.000 $1,315.00 +$170.95=$1485.95
>$800,000-$850.000 $1,365.00 +$177.45 =$1542.45
>$850,000-$900.000 $1,485.00 +$193.05 =$1678.05
>$900,000-$950.000 $1,540.00 +$200.20 =$1740.20
>$950,000-$1,000.000 $1,595.00 +$207.35 =$1802.35
>$1,000.000-$1,500.000 $1,725.00 +$224.25 =$1949.25
>$1500.000 $1,800.00 +$234.00 =$2034.00

New Home Pre-Delivery Inspection (PDI)

Before closing, it is advisable to inspect and make a list of matters to be intimated to the builder for newly constructed units. On the date of inspection, you will also be completing the Certificate of Completion and Possession which signifies delivery of the unit to the Tarion New Home Warranty Program by the builder.

Outstanding items are to be noted. Once you receive the warranty certificate, you should provide a copy to the lawyer. Any deficiency omitted in the PDI, should be noted on the 30 day report form and submitted within 30 days.

More Information about Tarion

The information given in this page is only for information purposes. For personalized legal advice, please contact Tarion Home Warranty Corporation. Click here to know more.

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