New Build Home Buyers in Ontario: Tarion Warranty
New build Home Buyers in Ontario: Tarion warranty
Are you looking at becoming a new build home buyer in Ontario, but not sure where to start? Dear reader, come with me as your local Blue Mountain REALTOR® and certified new home specialist guide and I will show you the way. My Youtube video briefly discusses the Tarion warranty, so here we will take a deep dive into all the questions you might have.
What is Tarion?
When buying a new build home the vendor (often the builder) of the home should be registered with Tarion. Tarion acts as a backstop if the vendor fails to honour the warranties. Tarion administers the statutory warranty that comes with your newly built freehold home or Condo in Ontario. Not sure if you will or should have one? By law, all new homes in Ontario built by a licensed vendor or builder come with a statutory warranty! Check out my other blog post if you are thinking of buying a new build from a seller who is not a builder.
What warranties does Tarion offer?
Every new build home buyer will have a seven-year warranty from the date of possession for 7 years. Each warranty period offers different coverage on your home so it is important to know the dates and timelines for coverage.
Click here to review coverage.
What does the Tarion warranty cover?
• Defects in materials and workmanship
• Major structural defects
• Deposit protection
• Delayed closing coverage
• Financial loss compensation
What does a Tarion Warranty not cover?
• Does not cover newly renovated homes
• Previously occupied homes older than 7 years that are not registered
• Deficiencies like poor maintenance or normal wear and tear
What else does Tarion do?
• Administers the new build home buyer online portal called MyHome to help new homeowners manage and report defects
• Helps with dispute resolution between the homeowner and builder
• If builder and homeowner can’t agree they may help validate the claim and help resolve it via third party
• Manages and administers the warranty fund
What do I do as your REALTOR® for new builds?
• Confirm there are no outstanding warranty claims
• Confirm what is covered or exempted from the warranties
• Walk you through deposit coverages
• Walk you through closing and the pre-delivery inspection
• If buying a resale that still has Tarion coverage, I check to make sure there are no outstanding unresolved claims
• If there are unresolved claims, work with the builder, seller, and you to ensure they are resolved to everyone’s satisfaction prior to closing.
Many new-build home buyers ask what happens to their deposit if the home never gets built or the builder goes bankrupt. The warranty program protects a buyer’s investment by providing deposit protection. At the signing of your purchase agreement, you will provide a deposit for your new home.
Changes to Tarion deposit protection – freehold homes:
• On new builds valued at $600,000 or less = up to $60,000 deposit coverage
• $600,000 or more = coverage up to 10% of purchase price to a maximum $100,000
• Are covered for up to $20,000 by Tarion
• Deposits over $20,000 are protected by the trust and excess deposit insurance provisions of the Condominium Act, 1998.
Is the Tarion warranty transferable?
If you are purchasing a resale new build home that was built in the last 7 years there MAY still be warranty coverage. As your real estate agent, I check to see what warranty coverage remains on the new build home. When buying a resale new build with remaining Tarion warranty coverage you will get the warranty transferred from the current owner to you. This is done prior to closing.