Builders in Ontario are deemed to provide statutory warranty coverage as described in the Ontario New Home Warranties Plan Act.
This coverage includes:
- Protection for deposits;
- Protection against Financial Loss for Contract Homes;
- Compensation for delays in closing or occupancy;
- Protection against unauthorized substitutions;
- One and two year warranties for certain defects in work and materials;
- A seven year warranty for major structural defects; and
- Coverage for condominium common elements (the common or shared area of condominium buildings.)
The maximum statutory warranty coverage available for freehold homes and condominium units is $300,000.
The maximum coverage for condominium common elements is $50,000 times the number of units, up to a maximum of $2.5 million.
The maximum combined coverage for a condominium project (units and common elements) is $50 million.
There is a maximum of $15,000 for warranted damage caused by environmentally harmful substances or hazards and a maximum of $25,000 for coverage of septic systems.
Tarion ensures new home buyers receive the statutory warranty coverage they are entitled to under the Act. Most issues are resolved by builders without involvement by Tarion, however we will intervene if a builder fails to honour their warranty obligations.
Statutory warranty coverage is different from the warranties for items provided by manufacturers, suppliers or subcontractors (such as appliances or flooring). Claims for these items should be made directly to the product provider.
The statutory warranty protection is broad, but it is not all inclusive. The warranty coverage has limitations and exclusions. Home buyers are encouraged to understand the scope of warranty coverage by reading this website and the Homeowner Information Package, which is an important publication created by Tarion, providing a general overview of warranty coverage. The statutory warranties are in addition to any warranties or rights the homebuyer may have under contract or otherwise.
The Second-Year Form
The Second-Year Form is used to notify Tarion of outstanding warranty items covered by the two year warranty or the major structural defect warranty that occurs during the second year of possession.
The deadline for submitting a Second-Year Form is the second anniversary of a home's date of possession.
Second-Year Forms may be submitted to Tarion anytime during this period and as often as required.
This form can be used to make claims for defects under Tarion's two year and MSD warranties.
The Major Structural Defect Form
At any time during the third year of possession of a new home, but no later than seven years from the date of possession, a homeowner may make a claim regarding any MSD items directly to Tarion using the Major Structural Defect Form.
The deadline for submitting a Major Structural Defect Form is the seventh anniversary of a home's date of possession.