Understanding Your Building’s Warranties: How Tarion Ensures Home Warranty Coverages
Planning Ahead Learn how to protect yourself from construction damages and the coverages tenants are entitled too.
Before you start comparing paint chips and tile finishes, be sure that you are protected. Tarion plays an essential role in providing peace of mind for first-time condo buyers.
Created in 1976, Tarion regulates new home and condominium builders and administers the New Home Warranty Program on behalf of the Ontario government.
As a regulatory body, Tarion protects new home and condominium buyers and owners in two important ways.
First, builders or vendors of new homes in Ontario are legally required to register with Tarion to ensure that they meet the financial and technical tests for building a new home or condo that meets or exceeds the Ontario Building Code.
Second, Tarion administers the Ontario New Home Warranty Program and educates consumers about its protections. Builders of new homes and condos must provide their buyers with a warranty package that lasts up to seven years and provides up to $300,000 in coverage.
This coverage includes:
- Deposit protection of up to 10 percent of the purchase price to a maximum coverage of $100,000 and a minimum of $60,000; payments made for upgrades and extras are also included in this coverage;
- Deposit protection for condominiums up to $20,000 (deposits for condos are also protected by the trust provisions of the Condominium Act);
- Compensation of up to $7,500 for certain types of delays in closing or occupancy;
- A one-year warranty requiring that the home is free from defects in work and materials and violations of the Ontario Building Code; this also provides protection against certain kinds of improper substitutions;
- A two-year warranty that protects against defects that allow water penetration through the foundation and building envelope, defects in the electrical, plumbing, heating systems, and the exterior cladding, and health and safety violations of the Ontario Building Code; and,
- A seven-year warranty that protects against work and material defects that adversely affect a load-bearing part of the home's structure, causing it to fail or significantly affect use of the building as a home.
Tarion backstops this warranty. If a builder is unwilling or unable to honour the warranty, Tarion will step in and work directly with the homeowner to resolve the matter.