A new home is a “dream come true” for most people, as it’s one of their biggest investments in life. People go to extreme lengths to have a roof over their heads, where rent is no longer a bother. And this is one reason why new homes must be protected and insured.
In Ontario, the government has taken numerous measures to ensure that new homeowners are protected against any losses while acquiring new homes. This is achieved through the new home warranty.
A new home warranty in Ontario is designed to ensure that the entire home acquiring process doesn’t lead to financial losses for the prospective homeowner. And, to better understand how this works, let’s first explore more on what the new home warranty is.
What is a New Home Warranty?
This is a third-party warranty offered by the builder, protecting the new homeowner against losses during the new home acquiring process. While this is not mandatory in most parts of Canada, it is a must-have condition in Ontario.
The warranty is essentially an insurance cover taken by the builder but intended to protect the new home buyer. It’s designed to cover newly built homes, as well as refurbished or converted properties. This means that any new home seller must have this cover to guarantee the buyer against any losses, during the initial 7-year period.
Ontario New Home Warranty Program
Currently known as Tarion, this is a government-initiated warranty program that seeks to protect Ontario’s new home buyers and owners from possible losses. The program, which was created in 1976, is mandated to administer Ontario’s New Home Warranties Plan Act. It’s simply the new homes building regulator in Ontario.
Since its inception, Tarion has offered warranty protection to over 2 million new homes in Ontario, a number that keeps rising. As per the recent reports, over 365,000 new homes are currently under this program, with approximately 50,000 new ones enrolling each year.
The program works to protect the public and new homeowners by:
- Enrolling new homes in the warranty program
- Educating home buyers about the warranty rights
- Resolving any warranty disputes between builders and the new homeowners or buyers
- Offering deposit protection
- Providing delayed closing protection
- Investigating malpractices in the building industry
- Prosecuting any uncertified builders
Tarion is also required to vet and register new home builders, which helps maintain high Ontario’s high construction standards. All builders must adhere to the listed standards under the 3rd edition of “Construction Performance Guidelines.”
What Does Ontario New Home Warranty Cover?
As earlier mentioned, Ontario builders should offer warranty coverage, as required by the Ontario New Home Warranties Plan Act. This should be a 7-years insurance cover for any newly built home they present into the market.
Generally, the warranty should include the following:
- Deposit insurance
- Insurance against financial losses for contract homes
- Protection against delayed closing or occupancy
- Cover against work and material defects (1 and 2-year warranties)
- Cover against major structural defects (7-years cover)
- Protection for condominium shared areas (common elements)
New home warranty coverage in Ontario commences on the possession date of either a home or a condominium and stays effective until the warranty expires. This applies whether or not you sell the property within the warranty period.
For the common elements, the warranty coverage starts on the registration date of the condominium corporation. However, common elements in vacant land condominiums don’t enjoy this coverage.
Before signing the contract with your developer or builder, ensure that they have explained everything about what their new home warranty covers and what it doesn’t. Also, never forget to establish that the builder is certified and reliable.
New Homes Pre-Delivery Inspections
Pre-delivery inspections are essential before a new homeowner moves into a new home. These inspections are meant to record the condition of the newly built house before the new buyer occupies it.
Through this, the owner can identify any defects or issues, not matching with their plan or liking and can note them on the PDI Form. As the buyer, you should be keen to ask questions and ensure you learn everything you need to know about the home. Don’t go out without total confidence about the house.
After this, the builder ensures that they rectify all these issues before the new homeowner can occupy the house. Pre-delivery inspections are not as extensive as the standard home inspections and can be done even on a working Jobsite.
Note: The PDI form doesn’t amount to a warranty service request. This means that if a homeowner doesn’t note a certain item, it doesn’t necessarily affect their warranty coverage. However, if they don’t note a missing or damaged item, it becomes difficult to ascertain whether the issue was present before the home’s occupancy, as it can’t be seen in the PDI form.
If there are any uncorrected issues before the new homeowner occupies the house, they should be recorded. This is done either on the 30-Day form or the Year-End one. The two forms represent a warranty service request for the listed items, which the builder must address within a specified period.
How to Handle Issues that Occur after Moving In
Even with the PDI (pre-delivery inspections), some defects or problems won’t be visible until you’ve stayed in the house for some time. Remember, “New house settling” might cause several issues on the structure, which shouldn’t be serious. These might include small cracks where walls meet the ceiling or even some nails pops.
If some of these issues occur, simply contact your builder or follow the set procedures. But in case your builder is unresponsive to your inquiries, you can directly contact the warranty provider, who should take the appropriate action. This can include mediating between you and the builder. If you want more information on your home maintenance, you can visit the warranty provider’s website, as most of them offer such information. Also, you can get helpful advice on various issues, including the home-buying process, how to choose a builder, and even the steps involved in acquiring a home.