Tarion Warranty Corporation - Essential Insights for New Home Buyers!

About Tarion Warranty Corporation

If you’re a new home buyer in Ontario, you’ll be pleased to learn that Tarion Warranty Corporation is dedicated to safeguarding your investment.

What is Tarion Warranty Corporation?

Tarion Warranty Corporation is a non-profit organization that regulates new home builders and provides warranty protection to new homebuyers in Ontario, Canada. It administers and enforces the Ontario New Home Warranties Plan Act and Regulations, ensuring that builders and sellers provide limited warranty protection to home buyers.

Roles and Responsibilities of Tarion

• Licensing: Tarion licenses new home builders and sellers, ensuring they comply with the legislation.
• Consumer Education: It informs consumers about their warranty rights.
• Investigations: Tarion looks into illegal building practices and promotes good new home construction standards.
• Warranty Backing: It backs warranty protection and helps resolve problems with new homes or fixes them directly.

Warranty Coverage

General Coverage

Generally, the Ontario New Home Warranties Plan Act covers all new homes but does not cover renovated or previously occupied homes. It also excludes normal wear and tear, and damage from poor maintenance.

Types of Warranties

• One-Year Warranty: Covers construction practices, defects, unauthorized substitutions, and the fitness of a home for habitation.
• Two-Year Warranty: Covers defects and violations of the Ontario Building Code related to health and safety.
• Seven-Year Warranty: Covers major structural defects.

The maximum warranty protection is $300,000, with common elements of a condominium having separate coverage of up to $2.5 million.

Warranty Fees

The builder pays for the Tarion warranty protection fee, which can range from $385 to $1,500 depending on the price of the home. This cost may be passed along to the buyer.

Filing a Warranty Claim

A buyer receives warranty information upon taking possession of a new home. To resolve a warranty coverage dispute, the homeowner follows a statutory warranty process, which can be managed online through Tarion.

Claim Trends

In 2013, Tarion paid out 413 claims totaling $7.3 million. Claims included $3.2 million for materials and workmanship in the first year and $1.7 million for major structural defects. Tarion has reported a decline in claims activity over the years, with homeowners and builders resolving more claims directly.

Additional Information

Deposit Protection

Deposit protection covers you if you’ve paid a deposit toward the purchase price of a new home but your purchase isn’t completed because your builder goes bankrupt or fundamentally breaches your purchase agreement. For a freehold home purchase after January 1, 2018, deposit coverage varies based on the purchase price.

Registering for Tarion Warranty

All new homes built by registered builders in Ontario must be enrolled with Tarion. Builders must provide the homebuyer with a certificate of warranty coverage at the time of purchase. Homebuyers should verify their builder’s registration status through the Tarion website.

Researching Your Home Builder

To avoid builder defects, research potential builders before purchasing a home. The homebuilder’s directory outlines all builders and their history of Tarion claims and warranty coverages.

Costs and Fees

The cost of the Tarion warranty is typically included in the purchase price and paid by the builder. The fee varies depending on the home’s size, value, and type of warranty coverage provided.

Making a Tarion Warranty Claim

To report a defect covered under the Tarion warranty, homeowners must notify the builder and Tarion in writing within the applicable warranty period. If the builder fails to address the claim, the homeowner can escalate it to Tarion for resolution through mediation, conciliation, and adjudication.

What is Not Covered by the Tarion Warranty?

• Normal Wear and Tear: Minor cracks in drywall, scuffs on flooring, and fading paint.
• Homeowner Negligence: Damage caused by improper maintenance.
• Non-Residential Use: Homes used for businesses or rentals.
• Items Covered by Other Warranties: Appliances or materials with separate warranties.
• Consequential Damages: Damages indirectly related to a defect.
• Unauthorized Alterations: Alterations made without the builder’s approval.
• Pre-Existing Conditions: Defects existing before possession.

The Bottom Line

The Tarion warranty is vital for new homebuyers in Ontario, providing coverage for construction defects and issues, including workmanship, materials, water penetration, structural defects, and more. It aims to offer peace of mind by providing financial compensation and repair services. Homebuyers should thoroughly review the Tarion warranty booklet and understand their coverage. For any disputes or claims, Tarion’s customer service is available to assist.

For more information, visit the Tarion website and explore the wealth of resources available to new homebuyers.