Don’t Sign That Agreement Until Your Lawyer Checks It Out – Reason 6 – TARION (II)

Can builders substitute materials or make changes to plans and specifications to a new house without a purchaser’s permission? You may be surprised at the answer.

One of the reasons why buyers of new homes and condominiums choose to buy new rather than go to the resale market is the desire to customize their homes. The choice of colours, finishings, d├ęcor, floor plans, flooring, etc. tantalize the buying process and excite purchasers for that special move-in day.

If you read the typical new home builder purchase agreement, you will find that, in most cases, builders are allowed to substitute materials and alter plans and specifications (to the dismay of the typical new home buyer!).

To avoid the problem in the first place, the buyers could have taken their draft agreement to a lawyer first and the lawyer could have amended the contract to prevent the builder from making such substitutions. But what if the buyers didn’t have such foresight? Does Tarion help? Regulations to the Ontario New Homes Warranty Plan Act state that the builder can’t make substitutions to items of contruction or finishing without the buyer’s written consent but this only relates to items for which the buyer is entitled to make selections according to the purchase agreement. On the other hand if a buyer doesn’t have the right to make selections of a certain item, and the builder makes a substitution for such item, such item only needs to be of equal or better quality than the original item in the purchase agreement.

Therefore in order to protect their buyer clients, lawyers should ensure that the language in a new home purchase agreement gives buyers the right to pick materials and finishes or at least pick those materials and finishes that are important to their clients.