Tarion Warranty Corporation is a private corporation that was established in 1976 to protect the rights of new home buyers and regulate new home builders and is responsible for administering the Ontario New Home Warranties Plan Act, which outlines the warranty protection that new home and condominium builders must provide, by law, to their customers. But not everything is covered by Tarion.
- If you give your builder a deposit of more than $20,000.00 on a new condo or more than $40,000.00 on a new house, you could lose the deposit, if the builder goes bankrupt and doesn’t hold “excess deposit insurance”.
- Normally buyers are protected during their first year of ownership for such problems as homes not contructed in a workmanlike manner, homes not free from defects in materials, homes not fit for habitation, homes not constructed in accordance with the Ontario Building Code and homes with major structural defects. However, in order to get such protection, a buyer must give written notice of such defect to the builder and Tarion, before the first anniversary of the date thatt they get possession of their home.
- Any defect in workmanship and materials discovered more than 1 year after possession is not covered by Tarion.
- Defects in electrical, plumbing and heating systems; leaks in basement and foundation walls, caulking, windows and doors; detached, displaced or deteriorated exterior cladding; and violations of the Ontario Building Code’s health and safety provisions, are only covered during the first 2 years of possession.
- Any major structural defect that is discovered more than 7 years after possession is not covered by the Tarion warranty.
Before entering into an agreement to purchase a new home from a builder it’s best to discuss Tarion coverage with your lawyer to understand your rights.