You can get a warranty for all sorts of things, from electronics to luggage. So maybe it’s not a huge surprise that your new home comes with a warranty, too
But it’s news to some first-time home buyers, so we’re happy to fill you in.
In Ontario, every newly constructed home has to be signed up for a warranty program through Tarion, a not-for-profit agency established by the provincial government. The warranty (actually warranties plural – more about that in a sec) mostly protects you against construction that’s poorly done or not up to code.
In other words, if you’re the first owner of a new home in Ontario, you’re entitled to a quality unit free of major defects. And you’re obligated to pay for a warranty to ensure you get one.
At Options for Homes we’re proud of the quality standards of our building partner, Deltera, and our buyers rarely encounter issues. But still: What should you know about Tarion warranty protection for new homes, as a potential buyer?
What a Tarion warranty covers
Your “Tarion warranty” is actually three separate warranties – a one-year, a two-year and a seven-year warranty. Each of them takes effect on the day you are given occupancy for your unit, and each one covers a different set of potential issues. (Although there is some overlap.)
Before you take possession of your new home, you (or someone you designate to take your place) will accompany your builder on a pre-delivery inspection, or PDI, of the home and its systems. Be careful to note any issues on the builder’s PDI form, such as things that aren’t installed, or incomplete, or don’t work properly. This isn’t the last chance you’ll have to remedy any defects, but it’s an early opportunity to document potential warranty issues. You can learn more about the PDI process here.
If you miss anything, don’t worry – your one-year warranty still protects against building code violations and enforces the requirement that a home be “constructed in a workman-like manner and [be] free from defects.” The first year is also the only window in which you can submit a claim that the builder used unauthorized materials – different countertops than you actually chose, for example.
The two-year warranty covers a longer list of items than the other two, including plumbing, leaks, doors and window problems, and the exterior (cladding, brickwork and so on). For the most part, you’ve got two years to be alert to the deficiencies your unit may have.
Finally, the seven-year warranty primarily covers structural defects – it’s not for the aftermath from that time you let the bathtub overflow (whoops).
The Tarion warranty coverage on your unit is quite comprehensive providing peace of mind. Though, as with any warranty, some exclusions apply including normal wear and tear, damage caused by third parties (be they municipal services, vermin, or “acts of God”), or damage caused by improper maintenance.
Tarion warranty costs money: About enrolment fees and obligations
The peace of mind that comes with this warranty doesn’t come free, however. In fact, enrolling in Tarion is mandatory for all new builds and means paying a fee. Two fees, actually: a Tarion warranty enrolment fee, plus an additional $145 “regulatory oversight fee” that goes to another provincial body, the Home Construction Regulatory Authority. And, no surprise, HST is payable on both. To give you an example, based on the February 2021 fee schedule an $800,000 new home would be subject to fees of $1,644.15 altogether.
In all, it’s a small price to pay for the comfort of knowing your new home is covered for any deficiencies. At occupancy, you’ll receive your Tarion’s Homeowner Information Package that has all the details you need. If you ever do need to submit a claim, Tarion offers an online portal to make it easy to do so. But here’s hoping you’ll never need to.