New home buyers in Ontario are entitled to limited warranty coverage of up to $300,000 over a seven year term which is provided by the builder and backed by Tarion. There is also separate coverage of up to $2.5 million for the common elements of a condominium (such as a lobby or garage).
Builders must enrol every new home with Tarion at a cost that is based on the selling price of the home and ranges from $535.00 to $1,650.00 (plus HST). The warranty provides excellent value and remains with the home for seven years, even if it is sold during this period. While the vast majority of builders are able to resolve any deficiencies or other issues that arise to the satisfaction of new home buyers, Tarion stands behind newly constructed homes and is there to help if a dispute about coverage does arise.
We do this by administering the new home warranty and ensuring that builders observe specific customer service standards. We also provide a process for making claims that involves working with the purchaser and builder, as well as other parties such as the local municipality if needed, to negotiate a binding solution. In situations where a builder is unwilling or unable to address an issue that falls under the statutory warranty coverage, we will work directly with the homeowner to resolve the matter.
If a builder or homeowner disagrees with one of our decisions, they may appeal through various channels. Purchasers may appeal our decisions through the province’s Licence Appeal Tribunal, or if they feel that they have been treated unfairly by us, they may contact the Tarion New Home Buyer Ombudsperson. Builders who disagree with a Tarion warranty decision may appeal it through our Builder Arbitration Forum.
- Protection of deposits up to $40,000 for freehold homes and $20,000 for condominium units.1
- Compensation for certain types of delays in closing or occupancy.
- A one year warranty requiring that the home is fit for habitation as well as free from defects in materials and violations of the Ontario Building Code.
- A one year warranty providing protection against certain kinds of improper substitutions.
- A two year warranty that protects against defects allowing water penetration through the foundation and building envelope, defects in the electrical, plumbing and heating systems and the exterior cladding, and health and safety violations of the Ontario Building Code.
- A seven year warranty that protects against work and material defects that adversely affect a load-bearing part of the home’s structure, cause it to fail or significantly affect use of the building as a home.
1Condominium deposits in excess of $20,000 are protected by the excess deposit provisions of the Condominium Act..
In addition to standing behind the builder’s statutory warranty, Tarion acts as the Regulator of the home building industry. As such, we are responsible for licensing all new home builders in the province and ensuring they have the technical competence, customer service capabilities and financial capacity required to build new homes. We also look at how past conduct reflects on the builder’s honesty and integrity.
Builder licences are renewed annually. A builder’s performance in constructing and servicing homes is used to determine conditions of registration when assessing a licence renewal.
If a builder is unwilling or unable to honour their warranty obligations, a number of sanctions may result.
- The terms and conditions of their registration may be changed such that:
- The builder is limited in the number of homes they can construct;
- The security they are required to provide to Tarion is increased or held for a longer period of time;
- A Tarion-approved customer service plan is put into place which we then audit for compliance; or
- Their licence may be revoked.