Why some Condos are covered by Tarion Warranties and some not?

Recently, a large developer’s townhouse project in Vaughan, which was completed two years ago, has encountered serious issues with its community children’s play ground. It appears that the foundation looks like sinking, and each homeowner is being asked to contribute thousands of dollars for repair costs. This situation is both shocking and alarming. Why are homeowners expected to pay for repairs just two years after the project’s completion? Isn’t this covered under the Tarion warranty?

The answer lies in the type of condo. While I’m not sure which specific project it is, I presume it is a common element condo, also known as POTL (Parcel of Tied Land). This type of condo differs from the more familiar standard condo. In a POTL, there are no common elements like in traditional condos, where shared areas are part of the project. Instead, POTL homeowners are responsible for the maintenance and repair of everything outside their individual units, including community spaces.

Tarion, which provides warranties for newly built homes in Ontario, does not cover repairs outside of the townhouse units in this kind of development, which is considered Common Elements. Many condo townhouse projects are designed as POTL, although not all. For instance, more recent developments like Elgin East Town and Brightwater Town operate as standard condos, where both the homes(unit) and common areas are covered under Tarion’s warranty.

When a project includes both low-rise homes and high-rise buildings, it’s usually a standard condo, meaning everything is covered by Tarion. However, when a project consists solely of townhouses, it’s often a POTL, which leaves the homeowners responsible for community areas like roads, walkways, and shared facilities—none of which are covered by Tarion.

In conclusion, understanding the type of condo you’re buying into can help prevent unpleasant surprises like unexpected repair costs. Make sure to investigate whether your development is a standard condo or a POTL to understand your financial responsibilities moving forward.