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Everything You Need To Know About Tarion New Home Warranty

Featured Image 7

Tarion

What is the Tarion Warranty?

Every new home or new condo in Ontario is covered by the Tarion Warranty program, however the home owner does have to pay for the warranty.

How much does Tarion Warranty cost?

The cost of the warranty depends on the purchase price of your property. See the chart at the top of this blog post for your reference. For example, if your condo costs $250k, your warranty cost would be $570+HST. If your condo costs $500K, your warranty would be $920+HST.

Who pays for the Tarion Warranty?

The home owner pays for the warranty themselves. This is not a cost that is paid for by the builder. The warranty program is mandatory.

When do you have to pay for your Tarion Warranty?

You pay for the Tarion Warranty on final closing. You do not pay for it when you first sign a contract for a pre-construction condo, you do no pay for it when you get your keys (occupancy date), you pay for it on final closing. It’s a closing cost along with your land transfer tax, legal fees, development charges and so on.

What about the case of converted buildings (i.e. hard lofts or office buildings and hotels converted to condo)?

In the case of conversions, the Tarion Warranty does not apply. This is something for every buyer to consider when purchasing a new condo and comparing between a brand new building and a conversion building.

Conversions can be great buildings to buy into and many have great character and unique features like high ceilings and original architecture, however, they do not come with a warranty.

What exactly is covered under Tarion?

Different items are covered for different time periods on your new condo. Here’s the full list:

One Year Warranty 

• Requires a home is constructed in a workman-like manner and free from defects in material;

• Protects against unauthorized substitutions

• Requires the home to be fit for habitation;

• Protects against Ontario Building Code violations; and

• Applies for one year, beginning on the home’s date of possession even if the home is sold.

Two Year Warranty

• Protects against water penetration through the basement or foundation walls;

• Protects against defects in materials that affect windows, doors and caulking and defects in work that results in water penetration
into the building envelope;

• Covers defects in work or materials in the electrical, plumbing and heating delivery and distribution systems;

• Covers defects in work or materials that result in the detachment, displacement or deterioration of exterior cladding (such as
brickwork, aluminum or vinyl siding);

• Protects against violations of the Ontario Building Code that affect health and safety; and

• Applies for two years, beginning on the home’s date of possession.

Seven Year Warranty

Your home’s seven year warranty covers major structural defects (MSD) and begins on the date you take possession of the home and ends on the day before the seventh anniversary of that date.

For example, if your home’s date of possession is October 23, 2005, the seven year MSD warranty begins on October 23, 2005 and remains in effect until and including October 22, 2012.

A major structural defect is defined in the The Ontario New Home Warranties Plan Act  as:

In respect of a post June 30, 2012 home, any defect in work or materials in respect of a building, including a crack, distortion or displacement of a structural load-bearing element of the building, if it,

(i) results in failure of a structural load-bearing element of the building,

(ii) materially and adversely affects the ability of a structural load-bearing element of the building to carry, bear and resist applicable structural loads for the usual and ordinary service life of the element, or

(iii) materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling and having regard to any specific use provisions set out in the purchase agreement for the home

The seven year MSD warranty includes significant damage due to soil movement*, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials.

In addition to the general exclusions, the seven year MSD warranty specifically excludes: dampness not arising from failure of a load-bearing portion of the building; damage to drains or services; and damage to finishes.
Common Elements

For most condominium projects, warranty coverage also includes the shared areas of the building, referred to as Common Elements.

Limitations and Exclusions

Please consult Tarion’s Construction Performance Guidelines if you are in doubt about whether an item is covered.

Is there anything else that Tarion does for consumers?

Yes. Tarion also protects your deposits when buying a new condo – up to $20,000 only, and up to $40,000 for all other types of property.

Tarion also protects consumers against delayed occupancy. It will spell out in every new condo contract exactly how long by law that the developer can delay giving you occupancy on your unit after which compensation will be in order, or you may exit your agreement and get your deposits back.

For full details about the Tarion Warranty program, check out their official website at Tarion.com.

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