1K 
For most of us, purchasing a new home is one of life’s biggest, most stressful decisions. In the Greater Toronto Area, the number of new condos being constructed is staggering, with thousands of new units being built to try and meet the tens of thousands of new arrivals to our city each year. There are more than 250 new condo projects under way this year alone, representing more than 60,000 new units.
With the current pace of construction, and the sometimes less than ideal climate homes are built in, it is perhaps inevitable that not every new home will be built entirely to the consumer's satisfaction. That’s why there’s a statutory warranty program – to stand behind the builder and ensure that your new home is built up to standard and that your concerns are dealt with in a timely manner. Tarion Warranty Corporation is there to make sure that happens. Understanding the warranty on your new home is crucial to ensure not only that you get the home you signed and paid for, but also to understand what is covered in the event that an issue does arise after you move in.
Created in 1976, Tarion is a private, non-profit corporation whose purpose is to regulate Ontario’s new home builders, ensuring new homes are built to the Ontario Building Code standards, helping consumers understand their warranty rights, and standing behind the builder’s warranty. Originally modeled along the lines of Great Britain’s highly successful system, the idea of a home warranty program was pushed by the housing building industry in order to improve buyer confidence. While a national warranty company failed to achieve lift-off in Canada, most provinces adopted the idea individually. In Ontario, the plan was championed by the local chapter of what is now known as the Canadian Home Builders' Association. The result, and Tarion's predecessor, was known as the Housing and Urban Development Association of Canada. In the early ‘80s the name was changed to the Ontario New Home Warranty Program, and finally to Tarion in 2004.
The agency has evolved in the decades since alongside the industry and growing consumer expectations. New features such as Construction Performance Guidelines and Customer Service Standard were introduced between 2002-2003 to give better clarity to how Tarion may rule on a warranty assessment and provide clearer guidelines on the repair timeframes new homeowners can expect.
Tarion has continued to evolve since, providing homeowners with improved warranty coverage. Tarion has embraced the Internet as a tool for educating both builders and homeowners in particular through its builder database, which allows consumers to see a snapshot of their builder's performance. Tarion also created an ombudsperson for customer complaints, and has conducted extensive public consultation to better improve its service for both builders and buyers.
Almost every new home in Ontario is covered by Tarion. There are a few exceptions, such as loft conversions and seasonal homes, but builders must register with Tarion; failure for a builder to do so could see them prosecuted under the Ontario New Home Warranties Plan Act.
"Buying a newly constructed home in Ontario comes with the security of knowing you have somewhere to turn if your home has defects or building code violations", says Howard Bogach, CEO of Tarion.
The warranty coverage that Tarion provides includes:
Deposit protection: in the event that after signing an Agreement of Purchase and Sale (“purchase agreement”) the builder goes bankrupt or breaches the agreement, up to $20,000 in deposits for a condominium unit are protected by Tarion (with the Condominium Act providing further protection). Deposits for freehold homes are protected up to $40,000.
Delayed closing/occupancy protection: should the builder be unable to provide you the unit by the date specified in your purchase agreement, you may be eligible for compensation.
Unauthorized substitutions protection: in your purchase agreement, the builder has agreed to provide your place with certain features, such as particular materials and elements. For those that the builder has chosen, they must choose a substitute that is of equal or greater value. For those that you have chosen, they may not be substituted without your consent.
Warranty protection (of 1, 2, and 7 years): with a new home, there are three warranties that you posses for 1, 2, and 7 years from the date of possession. The one year warranty protects against all Ontario Building Code violations and defects in workmanship and materials. The two year warranty protects against water penetration, your home’s major systems such as heating and plumbing, and Building Code violations that affect health and safety. The seven year warranty covers most major structural defects. These warranties continue to apply even if the home changes owners. These warranty protections are not all-inclusive, and some require the active participation of the owner (such as home maintenance), so understanding what is or is not covered is important to know as a consumer.
So how can you protect your investment in your new home?
As with any legal contract, you should have a lawyer help you work through your purchase agreement. When buying a new home, your responsibility does not end the moment you sign a purchase agreement. "While it is the builder's responsibility to ensure he or she builds a home that is properly constructed and free from defects, homeowners have a responsibility to identify defects within the warranty timeframe and report them to Tarion," says Bogach. Homeowners cannot be neutral actors. Those that fail to learn what is or is not covered under their Tarion warranty, how and when to make a claim when problems arise, and what is expected from them to maintain the property, put themselves at risk of losing what may have been a reasonable warranty claim.
During the upcoming months, Urban Toronto will be posting further articles about Tarion, and how they can help protect you when you purchase a new home. Next month we will be exploring what you should know about the pre-occupancy phase, with tips and advice for choosing the right builder, and what to look for before you move in. Then in December, we will be looking at the post-occupancy phase, exploring key dates and rights under your Tarion warranty, common home maintenance issues, and what to do when a problem occurs.
Have a question about how Tarion's warranty coverage works? Leave a comment below, or check out the extensive amount of information on their website!
