Tarion Warranty Coverage for New Homes in Ontario
In this post, we break down Tarion warranty coverage for new homes in Ontario.
Tarion administers warranty coverage for most new homes in the province of Ontario. Warranty provisions can impact new homes, as well as existing housing stock to which coverage still applies.
In Ontario, every builder constructing a new home must be registered with Tarion. In order to qualify, a builder must:
- Register with Tarion, and the home must be enrolled prior to construction;
- Submit an application and fee
- Indicate a closing date for the home.
New home warranty is regulated by the following legislation:
- New Home Construction Licensing Act, 2017 – a non-profit corporation acts as the regulatory authority of new home builders and vendors; and
- Protection for Owners and Purchasers of New Homes Act – a non-profit corporation acts as the warranty authority.
How does Ontario Tarion Coverage Work?
There are several different types of warranties, each with their own warranty period. Each warranty begins on the date of possession, except for the warranty on a condominium’s common element, which begins on the registration of the condo declaration and description. Regardless of the Tarion warranty type, coverage runs with the land, and it begins the date that the owner takes possession; meaning, if you purchase a newly-constructed home from its original owner, it is possible that the home is still covered by one or more Tarion warranties. The ‘warranty clock’ does not restart, and applies for a maximum of seven (7) years.
Builders will pass on to the buyer any warranties given by manufacturers, suppliers and subcontractors that extend beyond the first year (in which case, should you have a claim, you would claim directly with the manufacturer or distributor).
Ontario Tarion Warranty Coverage Types
Tarion warranty coverage is broken down into three categories:
- 1 year
- 2 year
- 7 year
In addition, and within this coverage, new construction homes also have protection relating to deposits, delayed closings and substitutions of finishes and materials. However, it is critical to understand that not all new homes and not all damages are covered.
We break down the three Tarion warranty categories below.
One-Year Tarion Warranty
This warranty applies for one year, beginning when the owner takes possession. It includes:
- A home being free from defects in workmanship and materials
- A home being fit for habitation. ‘Fit for habitation’ refers to a premises that satisfies the basic requirement of being safe and healthy enough to live in. An example of a home that is not reasonably fit for habitation includes: defects in repair, stability, freedom from damp, natural lighting, ventilation, water supply, drainage and sanitary conveniences, and disposal of waste water.
- A home that meets the Ontario Building Code to ensure that there are no major structural defects.
Two-Year Tarion Warranty
This warranty applies for two years, beginning when the owner takes possession. It includes coverage for:
- Water penetration through basement or foundation walls
- Defects in materials and work that would result in the detachment, displacement or deterioration of exterior cladding, leading to detachment or serious deterioration
- Defects in materials affecting window, doors, caulking and defects in work that results in water penetration into the building envelope
- Violations of the Ontario Building Code that affect health & safety
- Defects in work or materials in the electrical, plumbing and heating delivery and distribution systems
Seven-Year Tarion Warranty
This warranty is also referred to as the “major structural defects warranty”. A major structural defect is any defect in work or materials, with respect to a building, that:
- Results in the failure of a load bearing part of the home’ structure
- Materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling and having regard to any specific use provisions set out in the Agreement of Purchase and sale of the home.
If you are a builder with questions about whether Tarion applies to your newly constructed project, please do not hesitate to give us a call. If you are a purchaser dealing with a Tarion claim against your builder or condominium corporation, we can assist you as well.
