In the recent news, Tarion anticipates paying over $90 million to home-buyers this year, marking the largest claim event in its history. This surge in claims is attributed to an increase in receiverships and developers failing to deliver on residential projects, exacerbated by high interest rates and rising construction costs. In Ontario, the Tarion Warranty Program serves as a safeguard for homeowners, ensuring that one of the biggest investments of their lives is protected. Let’s delve into the key aspects of the Tarion program, and how it could protect interests of purchasers like you:
What is the Tarion Warranty Program? The Tarion Warranty Program is a cornerstone of consumer protection in Ontario’s residential construction sector. It is specifically tailored for homes constructed by builders and vendors licensed under the Home Construction Regulatory Authority (HCRA). Governed by the Ontario New Home Warranties Plan Act (ONHWP Act), the program’s primary aim is to protect homeowners by ensuring that builders adhere to provincial construction standards.
Coverage Timeline: From Purchase to Possession and Beyond The warranty coverage commences the moment you sign the Agreement of Purchase and Sale, extending up to 7 years. This timeline is crucial for homeowners, as it outlines the period during which they are protected under the Tarion program.
Financial Protections Before Possession Before taking possession of your new home, the Tarion warranty provides several financial protections:
Deposit Protection: For condominium units, deposits must be held in trust as per the Condominium Act. If the purchase agreement be terminated by the builder, the deposit must be returned in full within 10 days. Failing this, Tarion steps in to provide deposit protection up to $20,000 per condo unit.
Delayed Closing/Occupancy Coverage: Homeowners are eligible for up to $7,500 in coverage for each unit affected by delays in closing or occupancy.
Condominium Cancellations and Financial Loss Coverage for Contract Homes: These protections are designed to mitigate the financial impact on homeowners due to unforeseen cancellations or losses.
The Warranty Enrolment Fee It is the responsibility of the vendor or builder to pay the warranty enrolment fee to Tarion, as stipulated in the Enrolment Confirmation terms and conditions. This fee is a critical component of the warranty’s financial structure, ensuring that the protections offered by Tarion are fully funded and available to homeowners when needed.
Coverage Periods: 1, 2, and 7 Years The warranty coverage is segmented into three distinct periods, each addressing specific concerns:
First Year: Covers defects in materials and workmanship.
Second Year: Extends to cover defects in materials and workmanship concerning the Ontario Building Code (OBC), water penetration, electrical, plumbing, heating delivery, and exterior cladding.
Seventh Year: Protects against major structural defects, including serious issues with the roof structure or significant distortion of joints. Maximum Coverage
For both freehold homes and condominium units, the maximum statutory warranty coverage available is $300,000. This cap ensures that homeowners have substantial financial protection against a wide range of potential issues.
New Source: “Builder failures, receiverships contribute to ‘largest claim event’ in Tarion’s history, organization says, CP24 https://www.cp24.com/news/builder-failures-receiverships-contribute-to-largest-claim-event-in-tarion-s-history-organization-says-1.6787774
