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Whether you own a new home or condo, are considering buying one, or just love to dream about it, the Open Door blog is here to share stories that can help you protect what is likely the biggest investment of your life.

The Open Door blog is published by Tarion, a non-profit corporation that administers Ontario’s New Home Warranty Plan and registers all new home builders in Ontario. Click here to learn more about us.

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Buying a new home? Here’s what you need to know about the warranty
April 1, 2019
Back of couple's heads relaxing on a couch


Have you recently purchased a new home? Well, we’ve got great news for you – your new home comes with a warranty that is backstopped by Tarion. So, in case any issues arise before or after you move in, here’s what you need to know about your warranty coverage.

Deposit protection

If you put down a deposit when you signed the purchase agreement, those funds are protected if anything goes wrong. Deposits on freehold homes with a purchase price of less than $600,000 are covered up to $60,000, while deposits on homes purchased for $600,000 and over are covered for up to 10 per cent of the purchase price to a maximum of $100,000. Since deposits on condominiums are required by law to be put in trust and should be fully protected, the deposit protection backstopped by Tarion is up to $20,000.

Delays in closing or occupancy

In your purchase agreement, your builder must provide a closing date, or occupancy date for condominium units, when your new home will be ready for move-in. If they fail to meet or properly extend the specified date, you may be entitled to delay compensation. Review the addendum attached to your purchase agreement to understand when and how closing/occupancy dates may be extended and in what circumstances your purchase agreement may be terminated.

Types of warranty coverage

There are three different warranties that cover specific aspects of your new home:

  1. One-Year Warranty
  • Covers defects in work and materials, and unauthorized substitution of materials;
  • Protects against Ontario Building Code violations; and
  • Applies for one year, beginning on the home’s possession date and ending on the first anniversary of the possession date.
  1. Two-Year Warranty
  • Protects against Ontario Building Code health and safety violations;
  • Protects against water penetration through the basement, foundation or building envelope;
  • Covers defects in electrical, plumbing and heating systems and exterior cladding; and plumbing pipes
  • Applies for two years, beginning on the home’s possession date and ending on the second anniversary of the possession date.
  1. Seven-Year Warranty
  • Covers major structural defects in the building; and
  • Applies for seven years, beginning on the home’s possession date and endings on the seventh anniversary of the possession date.

The warranty starts on the date of possession of your new home and is effective until the end of the warranty period, even if the home is sold to a new owner. To see a full outline of the warranty coverage, you can visit our website.

While buying your first new home is exciting, each warranty comes with responsibilities on you as a homeowner. Take the time to understand what’s covered when you take possession of your new home. And remember, if you have any questions or concerns, give us a call. We’re here to help!


The goal of this blog is to provide you with general information about the warranty process by sharing real experiences from new homeowners. The blog should not be relied upon as legal advice. For privacy reasons, we will not address or resolve current cases in a public forum, so any comments or questions that are posted on this site that describe individual cases cannot be discussed. If you have a question about your warranty or Tarion generally, we would be pleased to discuss your issue, in the context of your particular circumstances and in confidence. We exercise reasonable care to avoid offensive, illegal or defamatory content from being posted, as well as comments that are intended solely for self-promotion or considered to be spam.

 

    

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