Exclusions From Provincial Warranty Coverage under the ONHWP Act

In this post, we will look at these three categories of warranty exclusions for new homes under the Ontario New Home Warranties Plan (ONHWP) Act:

• Excluded properties
• Excluded items
• Additional excluded items

You can check out our blog posts on the basics of Tarion and provincial warranties here, and additional coverage provisions here.

Excluded Properties

The following types of properties are not covered by Tarion warranty or the ONHWP Act:

Temporary or seasonal homes

A seasonal home is one that does not meet the year-round occupancy requirements of the Ontario Building Code, and is therefore not intended to be used 12 months of the year. An example includes cottages not built on permanent foundations and not insulated sufficiently to enable year-round living.

Homes Built on Existing Footing/Foundations

In some cases, builders will use the existing foundation of a home in order to maintain the existing set-backs rather than adhere to current ones, as this allows them greater lot coverage.  If part of the foundation of a home is pre-existing and the pre-existing portion exceeds 40% as determined by linear measurement, the home will not have provincial warranty coverage

Owner-built Homes

A home is considered ‘owner-built’ if the owner builds the home themselves on land that they own, then resides in the home or exercises control over construction.  For example, this would include an owner selecting and contracting directly with subcontractors, trades or suppliers – such a home is ineligible for provincial warranty coverage.

Homes occupied prior to being listed for sale: the ONHWP Act applies only to new homes, and therefore homes that have been previously occupied by the builder or rented out and occupied by other persons before being sold are not covered

Renovated Homes

If an existing renovated home has simply been renovated, then the home will not be considered new and would not be eligible for provincial warranty coverage

Custom Homes

These types of homes are generally included in provincial warranty coverage, but only if a single contractor is hired to build the home.  If there was more than one contractor building the home, then there is no provincial warranty coverage

Residential Partnership Properties

Properties held for investment purposes by limited partnerships in which investors purchase interests or units.

Excluded Items

The following causes of damage are excluded under the ONHWPA:

Normal Wear & Tear

This includes normal shrinkage of materials that dry out after construction (such as nail pops or minor concrete shrinking); settling of soil around the house or along utility lines, or scuffs and scratches to floor or wall surfaces

Improper Maintenance

Dampness or condensation caused by failure to maintain proper ventilation, or damage caused by third parties (such as municipal services or utilities)

Acts of God

Floods, acts of civil militaries, or acts or war, vandalism or civil commotion

Insects/Rodents

Insects & rodent damage will not be covered unless the damage is a result of a construction defect that does not meet the Ontario Building Code

Additional Excluded Items

Secondary damage caused by defects that are under warranty

Personal property damage, such as personal injury, loss of income, or other secondary loss associated with warranted defects or repairs. For example, if water comes through a side wall and ruins a TV, the damage to the TV is not covered.

Supplementary Warranties

These are warranties or agreements provided by the builder over and above the statutory warranties. You would contract with your builder for these warranties

Deficiencies Caused by the Homeowner

These exclusions include alterations, deletions or additions to the home that were made by the homeowner, or changes by the homeowner to the direction of the grading or slope or the ground

Defects in Materials, Design or Work Supplied/Installed by Homeowner

This is self-explanatory.

Elevators and HVAC Appliances

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If you are purchasing a new home, contact us to have your Agreement of Purchase and Sale reviewed. We will also review your new home warranty. If you are a builder with questions about selling or renting your new build, and the applicability of a new home warranty, please contact us.