The Tarion Warranty Coverage

The Ontario New Home Warranties Plan administered by Tarion Warranty Corporation, provides new home buyers of Ontario with deposit protection, occupancy delays, closing without adequate notice, protection for any defects in work and materials used, and for any substitution of materials without your authorization.

New Homes with no Statutory Warranty Coverage

Not every new home qualifies for the warranty coverage. Custom-built homes or owner-built homes are some of the non-qualifying new homes with no statutory warranty coverage provided. It is always best to obtain legal advice to determine whether a new home is subject to the Act or not.

First Time Home Purchaser Land Transfer Tax Rebate

The First Time Home Purchaser Land Transfer Tax Rebate offered by the Ontario Ministry of Finance and the City of Toronto, requires the buyer of a qualifying new home to have the Tarion Warranty Coverage to receive the rebate. First-time buyers of resale and non-qualifying homes can also receive this rebate.

The Tarion Deposit Protection

Tarion protects the deposit you provide to your builder in the following circumstances:

1.     The builder is bankrupt

2.    A Fundamental breach of the agreement by the builder

3.    Termination of the agreement by you

For a purchase price of $600,000 or less, the Tarion deposit coverage is $60,000. For a purchase price of over $600,000, the Tarion deposit coverage is 10% of purchase price to a maximum of $100,000.

The money paid for upgrades and extras will also be protected by the deposit coverage.

The Deposit Protection under the Condominium Act, 1998

Under the Condominium Act, deposit money paid upon the purchase of a new condominium unit must be placed in a trust. If the builder terminates the purchase agreement, the deposit must be returned within 10 days. The Tarion new home warranty coverage protects each dwelling unit for $20,000, including the money paid for upgrades and extras.

The Tarion Delayed Closing Coverage

There will be a date which the builder guarantees that your new home will be ready for you to move in. Sometimes that date will be extended if circumstances warrant it. For any improper delays, Tarion provides compensation up to $7,500 from the builder.

The Tarion Financial Loss Protection for Contract Homes

A home built on a land owned by a purchaser is called a contract home. Tarion provides compensation for the difference of amount paid between the builder and for the work and materials supplied, up to $40,000, in the event of failure by the builder to substantially perform the contract.

Common Elements Warranty Coverage for Condominiums

The shared areas of the building, called common elements in a condominium, are mostly covered by the warranty. Coverage begins on the date the condominium corporation is registered and is managed by the condominium corporation.

Work and Materials Coverage

The Tarion warranty on works and materials lasts for seven years from the date of possession of the new home. The maximum coverage is $300,000. It is divided into three extensive coverages of one-year, two-year and seven-year warranty. These coverages make sure your home is built free from defects in materials, fit for habitation with protection against Ontario Building Code violations and an exhaustive list of coverages including defects in work or materials in the electrical, plumbing, and heating delivery and distribution systems.

Pre-Delivery Inspection (PDI)

Before you take possession of the new home, the builder must conduct a pre-delivery inspection. This is an opportunity for you to make note of items that are damaged, missing, incomplete, or not working properly and learn how to operate and maintain ventilation, plumbing and heating systems in your new home. Your builder is required to resolve the items noted on the PDI Form as soon as possible.

 Note: This article is for general information purposes only. The contents of this article are not legal advice or opinion and should not be relied upon as such. YFLaw Professional Corporation owns the copyright to this article and its contents. The article and its contents are not to be copied or reproduced in any form, in whole or in part, without the express permission of YFLaw Professional Corporation.