Comprehensive Warranty Coverage: Benefits of buying a new home

Oct 31, 2019

Benefits of buying a new home

One of the advantages to buying a brand-new home is having warranty coverage for seven years. Builders are required to provide this coverage under the Ontario New Home Warranties Plan Act and it’s administered by a body known as Tarion.

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Tarion’s main purpose is to protect consumers and their new home purchases. It will investigate claims, resolve warranty issues between home buyers and builders, provide deposit and delayed closing/occupancy protection and prosecute illegal builders.

A picture of Luke Johnston of Dunpar Homes.

We talked to Luke Johnston of Dunpar Homes about the warranty, what new home buyers should expect and what their responsibilities are. This is his perspective.

“Ontario has one of the best new home warranties in the world and the protection you get as a purchaser is very comprehensive,” he says. To find out just how comprehensive and to find in-depth information, take a tour of the Tarion website at www.tarion.com

Even before your home is under construction, some or all of your deposit may be covered and you can be eligible for compensation under certain circumstances if your house or condo occupancy is delayed or if a project is cancelled.

Your warranty coverage will be outlined in a Tarion addendum attached to your Agreement of Purchase and Sale. It’s important for new home purchasers to take the time to go through this document in detail, understand what is covered by the warranty and what isn’t, and what standard conditions the builder must meet.

You, the purchaser, will ultimately pay the Tarion enrolment fee, which is based on the purchase price of your house. This will be part of the closing costs you will be required to provide when your deal closes.

An open, finished bedroom.

Soon before your new house or condo is ready for occupancy, you will be invited to do a pre-delivery inspection with the builder’s representative. It’s important you attend this inspection, as this is when you can go through your new house and make note of any issues and deficiencies. This may happen days or a few weeks before occupancy. The builder will be notified of any issues that need rectifying.

Once you move in, you have approximately 30 days to submit a 30-day form and the builder then has 120 days to fix or resolve any issues (check your Homeowners’ Information Package or Tarion Builder Bulletin 42 for particulars). There is also a year-end form you may submit during the last 30 days of your first year of possession that lists any items that haven’t been resolved and new ones that may have come up.

The majority of builders want to get issues rectified as they don’t want to jeopardize their reputation. But if there is a disagreement, a homeowner can request a conciliation inspection through Tarion and Tarion will make the decision on whether the homeowner’s claim is warranted. If it is a legitimate concern, the builder will have an additional period to rectify or if he doesn’t, Tarion can arrange for the issue to be fixed or provide financial compensation to the homeowner.

Upgrades that were made as part of your sales agreement may also be covered by the warranty. Be aware that if you use another contractor or do alterations or repairs yourself after occupancy, it may affect warranty coverage or make it difficult to identify any builder defect.

A long and open dining area, finished with a chandelier and a wide, open window.

The second-year warranty is more limited than the first year; it covers  building code violations affecting health and safety and other serious deficiencies, such as water penetration, malfunctioning heating/ distribution systems etc. The seven-year warranty applies to major defects such as pervasive mold or a shifting foundation. Those claims are rare.

Tarion can be of assistance even before you buy your house. When shopping for a new home, it’s important to research the builder or builders you’re interested in. Go the Tarion website and click on the Builder Directory, where you can do a search of builders and vendors. This will show you whether your intended builder is registered with the warranty program, how many home possessions they’ve had, and if they’ve had chargeable conciliations or claims.

Choosing a builder with a good track record will help to ensure a successful outcome; you can also be reassured your new home will be backed up by a comprehensive warranty.

*** This article is intended as general information. For legal advice, consult a licensed professional. The comments of Mr. Johnston are his own and do not reflect the views of Dunpar Homes or Tarion.

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