The Ontario New Home Warranties Plan Act outlines the warranty coverage that builders are required to provide to their customers and which is administered by Tarion. It is important to know that this coverage applies to the Property not the Owner, so that if you buy a Re-sale Home less than 7 years old the remaining coverage still applies.

Coverage under the Act includes deposit protection, protection against defects in work and materials, protection against unauthorized substitutions, and protection against delayed closings or delayed occupancies without proper notice. For condominiums, warranty coverage also includes common/shared areas of the building

The aggregate maximum warranty coverage for new homes and condominium units is $300,000. Remember that Land frequently represents a large part of overall value so the defect protection doesn’t generally have to cover your whole purchase price

The maximum coverage for condominium common elements is $50,000 times the number of units, to a maximum of $2.5 million.

New home owners benefit from One Year Warranty Protection and Two Year Warranty Protection against defects in work and materials, and Seven Year Warranty Protection against major structural defects .

Warranty coverage begins on the date of possession of a home or condominium unit, and remains in effect until the end of the warranty period, even if the home is sold before the warranty expires.

For condominiums, warranty coverage also includes the shared areas of the building, referred to as the common elements but doesn’t begin until the Condo is ‘Registered’.

The One Year Warranty

A home’s statutory one year warranty coverage begins on the date of original possession of the home and ends on the day before the first anniversary of this date.

The one year warranty is provided by the builder and it requires that the home be:

§   Constructed in a workmanlike manner and free from defects in material;

§   Fit for habitation;

§   Constructed in accordance with the Ontario Building Code; and

Free of major structural defects , defined in the Act as

•  Any defect in work or materials that results in the failure of a load-bearing part of the home’s structure or materially and adversely affects its load-bearing function; or
•  Any defect in work or materials that materially and adversely affects the use of the building as a home.

The Two Year Warranty

The two year warranty is provided by the builder and covers:

§   Water penetration through the basement or foundation walls;

§   Defects in materials, including windows, doors and caulking, or defects in work that result in water penetration into the building envelope;

§   Defects in work or materials in the electrical, plumbing and heating delivery and distribution systems;

§   Defects in work or materials which result in the detachment, displacement or deterioration of exterior cladding (such as brickwork, aluminum or vinyl siding);

§   Violations of the Ontario Building Code affecting health and safety (including, but not limited to, violations relating to fire safety and the structural adequacy of the home); and

§    Major structural defects

The Seven Year Warranty

The 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.

During the first two years of possession of your home, the warranty is provided by your builder. After that, during years three through seven, the warranty is provided directly by Tarion

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 failureof 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.