The Open Door Blog
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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You’ve done a lot of looking and finally decide the best way to get the house of your dreams is to hire someone to build one custom for you. There’s lots to consider -- from blueprints to building materials to fixtures. Each takes a different kind of expertise, planning and thought. One of the most crucial steps is selecting a builder with the required experience, knowledge and financial position so you can rest easy that your home will be built well and on time. The last thing you want to do is put yourself at risk because your builder didn’t go through the proper process of getting licensed by Tarion Warranty Corporation, the private corporation created to administer the Ontario New Home Warranties Plan Act. If a builder of a new home is not licensed or has not enrolled your home with Tarion, they are building illegally.
A building corporation can be fined up to $250,000 – up from the previous $100,000 fine -- while the maximum fine for an individual builder has doubled to $50,000 and/or imprisonment of up to two years.
Province increases fines
Ontario recently took a major step and upped provincial fines to deter illegal builders and enhance consumer protection. As of January 1, a building corporation can be fined up to $250,000 – up from the previous $100,000 fine -- while the maximum fine for an individual builder has doubled to $50,000 and/or imprisonment of up to two years less a day, twice the previous prison term.
We can investigate
Take the time to check out the builder you’re considering. Just look up the builder’s name on Tarion’s directory While you’re on our website, take a look and see whether your prospective builder has been charged for illegal building over the past three years. Even before they dig the first hole, builders must pay the $500-$1,500 warranty enrolment fee to Tarion. Some builders include the fee in the purchase price of the home, while others show it as a separate item. If you don’t see that fee anywhere, ask your builder about Tarion enrolment. If you are concerned that your builder may not be licensed or that your home may not be enrolled with Tarion, contact us and we will investigate.
Illegal builders can create financial havoc for homeowners and give registered builders a bad name. But illegal builders continue to operate because no one reports them.
Keep an eye out for illegal builders
Illegal builders can create financial havoc for homeowners and give registered builders a bad name. But illegal builders continue to operate because no one reports them. Some homeowners may feel too embarrassed to tell authorities, while trade contractors may not report them because they get paid by the illegal builder. With Fraud Prevention Month in March we ask everyone, including neighbours, contractors and suppliers, to let us know about illegal builders. Just call our Compliance and Investigations team, toll-free, at 1-877-982-7466 ext. 3833. Why all the big fuss about being licensed? A builder who is not licensed by Tarion may not have the proper technical and financial means to finish the job properly. Also, an illegal builder may not tell you about the warranty coverage you are entitled to under the Ontario New Home Warranties Plan Act.
The warranties are provided by your builder and backstopped by Tarion. If you are a new homeowner you should receive a Homeowner Information Package from your builder, which outlines what’s included in and what’s excluded from the warranties, as well as the warranty claim process. The warranties cover both new homes and new condominium units. Here are some examples of what’s covered under the warranties:
- A one-year warranty requiring the new home to be free from defects in material and protecting against unauthorized substitutions
- A two-year warranty that protects against defects in the electrical, plumbing and heating distribution systems and water penetration through the basement or foundation walls, and
- A seven-year warranty that covers major structural defects, such as major cracks in basement walls or the collapse of a roof structure.
Don’t be shy about submitting a warranty form to Tarion, thinking your builder won’t be pleased. A warranty form submitted on time will protect your warranty rights so you can come back to us if the builder doesn’t fix the items on the form. This is your home, one of the largest investment purchases of your life, so do your due diligence by submitting a warranty form to us.
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.