Tarion New Home Warranty

Tarion is a non-profit, private corporation established in 1976 to protect the rights of new home buyers and regulate new home vendors and builders according to the terms of the Ontario New Home Warranties Plan Act (the ONHWP Act).

The Ontario New Home Warranty Plan was created under the Ontario New Home Warranty Plan Act (the ONHWP Act​).

The Act requires that the builders in Ontario be registered with Tarion and provide new home warranty coverage. For a list of registered builders click here.

The vendors or builders must register the new home prior to the start of construction.

Tarion is also responsible for managing a guarantee fund to ensure that builders honour the statutory warranties, and for enforcing the overall terms of the Act.

The New Home Statutory Warranty begins on the date you take possession of the home which may be different than the closing date.

The new home buyers should carefully read through the Homeowner Information Package (HIP) and become familiar with its contents, which describe:

  • The statutory warranties that apply to all new freehold and condominium units built in Ontario
  • The responsibilities of homeowners, builders and Tarion
  • The process used by Tarion to handle statutory warranty claims

When making a statutory warranty claim, homeowners are responsible for completing all Statutory Warranty Forms and submitting them to Tarion within specific time periods described in the Homeowner Information Package.

Copies of all the Forms should also be sent to the builder.

Failure to properly submit Forms could jeopardize the homeowner’s rights under the ONHWP​ Act.

Included in Statutory Warranty

The Statutory Warranty provides both deposit protection and compensation for Delayed Closing.

There are three specific statutory warranties: the one year warranty, the two year warranty and the seven year warranty covering major defects.

  1. One Year Warranty
  • Requires a home is constructed in a workman-like manner and free from defects in material
  • Protects against unauthorized substitutions
  • Requires the home to be fit for habitation
  • Protects against Ontario Building Code violations; and
  • Applies for one year, beginning from the date of possession of the home
  1. Two Year Warranty
  2. Protects against water penetration through the basement or foundation walls;
  3. Protects against defects in materials that affect windows, doors and caulking and defects in work that results in water penetration into the building envelope;
  4. Covers defects in work or materials in the electrical, plumbing and heating delivery and distribution systems;
  5. Covers defects in work or materials that result in the detachment, displacement or deterioration of exterior cladding (such as brickwork, aluminum or vinyl siding);
  6. Protects against violations of the Ontario Building Code that affect health and safety; and
  7. Applies for two years, beginning from the date of possession of the home
  8. Seven Year Warranty

Your 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 seventh anniversary of that date.  For example, if your home’s date of possession is October 23, 2005, the seven year MSD warranty begins on October 23, 2005 and remains in effect until and including October 23, 2012.

A major structural defect is defined in the The Ontario New Home Warranties Plan Act as:

In respect of a post June 30, 2012 home, any defect in work or materials in respect of a building, including a crack, distortion or displacement of a structural load-bearing element of the building, if it,

(i) results in failure of a structural load-bearing element of the building,

(ii) materially and adversely affects the ability of a structural load-bearing element of the building to carry, bear and resist applicable structural loads for the usual and ordinary service life of the element, or

(iii) materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling and having regard to any specific use provisions set out in the purchase agreement for the home

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 failure of 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.

Excluded from Statutory Warranty

  1. The statutory warranty applies to new homes built by a builder registered with Tarion. If you ​​as homeowner exercise significant control over construction (e.g., entering into contracts directly with subtrades) or contribute one or more essential elements (e.g., footings/foundation, framing, exterior cladding, building envelope, and heating, electrical and plumbing distribution systems), then the home itself may not qualify for the statutory warranty.
  2. ​Damage resulting from improper maintenance such as dampness or condensation caused by the homeowner’s failure to maintain proper ventilation levels or improper operation of a humidifier, hot tub or other moisture-producing device. For information about how to ensure you are properly maintaining your new home, click here.
  3. ​Alterations, deletions or additions made by the homeowner (such as changes to the direction of the grading or the slope of the ground away from the house).
  4. Defects in materials, design and work supplied or installed by the homeowner.
  5. Damage caused by the homeowner or visitors.

Types Of Homes Not Covered:

  1. Renovated Homes

If an existing residential home has simply been renovated, (e.g., rewired, addition added), the home is not new and would not be eligible for statutory warranty coverage

  1. Homes Built on Existing Foundations

If more than 40% of the foundation of the new home is on the existing foundation from the previously occupied home, then the new construction is not eligible for statutory warranty from Tarion.

The foundation is measured using linear measurement, such as, metres or feet.

  1. Previously Occupied Homes

The statutory warranties apply to new homes and accordingly, do not apply to homes that have been previously occupied by the vendor/builder or rented out by the vendor/builder and occupied by other persons before being sold to a purchaser.

  1. Owner Built Homes

A home is owner built if:

  • The owner builds the home himself /herself on land that he/she owns; or
  • The owner hires someone else to build the home on the owner’s land and the owner exercises significant control over the supply of materials and/or construction of all or part of the home
  • The owner lives in or rents the home

If the owner sells the home without first legitimately residing in the home, it is not considered an owner built home and the home is entitled to statutory warranty coverage.

If the owner does not intend to live in the new home before selling, the owner must get it built by a builder registered with Tarion and must register the new home with Tarion prior to the start of construction. Tarion inspects the new home construction for compliance at several stages.

  1. Seasonal Homes

A seasonal home is a home that does not meet the year-round occupancy requirements of Part 9 of the Ontario Building Code and is therefore not built for year-round occupancy.

Types Of Homes Covered:

 

  1. ​Single Family Dwellings

Single family dwellings that meet the “new home requirements” have statutory warranty coverage.

This could be a detached home, a townhome, a row-home or a unit in a quadruplex, as long as it is a self-contained, one-family unit.

It may be a home in a new subdivision or one constructed on a vacant or cleared lot.

  1. Condominium Dwelling Units

Residential dwelling units in a standard condominium project or a dwelling built on a vacant land condominium unit will have coverage if they meet the “new home requirements.”

Statutory warranty coverage also extends to common elements that benefit a condominium dwelling unit with two exceptions: the common elements of a vacant land condominium corporation, and common elements of a common elements condominium corporation are not covered.

  1. Home on a Parcel of Tied Land (POTL/CEC)

Some new home purchase transactions involve homes built on a freehold parcel (sometimes called a parcel of tied land or “POTL”) where the land is tied to a common elements condominium corporation.

The residential dwelling unit in such a transaction will have statutory warranty coverage (as long as it otherwise meets the “new home requirements”), but warranty coverage does not extend to the common elements of the common elements condominium corporation.

  1. Contract Homes

A contract home is a home constructed under a contract between a builder and an owner of land that provides for the construction of a home on the land.

A contract home that meets the “new home requirements” will have statutory warranty coverage. However, a contract home, instead of having deposit protection, has financial loss protection.

  1. Modular Homes

A modular home, sometimes called a Kit Home, is a complete home composed of finished sections built off-site.

Statutory warranty coverage applies to the home if the assembled sections are placed on a permanent foundation that meets Part 9 of the Ontario Building Code and was supplied and installed by the same builder that sold the home to the purchaser and if it meets the “new home requirements”.

  1. Mobile Homes

A mobile home generally is a transportable, single or multi-section self-contained home built off-site.

Statutory warranty coverage applies if the mobile home is placed on a permanent foundation that meets Part 9 of the Ontario Building Code and was installed by the same builder that sold the home to the purchaser and if it meets the “new home requirements.”

  1. Model Homes, Sales Offices, Inventory Homes

The question of whether or not statutory warranties extend to sales of pre-built homes held in “inventory” or homes used as a display or model homes or sales offices to home buyers can be complex.

The statutory warranties were developed for new homes and do not extend in certain circumstances to dwellings previously occupied.

You should discuss with the vendor the nature and extent of the warranties being offered by the vendor and in particular any exclusions to warranty proposed by the vendor.

Any proposed exclusions or exceptions should be specifically identified and itemized. These matters should all be addressed before signing the purchase agreement.

If you have any questions, contact Tarion at ismyhomecovered@tarion.com

  1. Log Homes

Log homes are built with logs, which form an integral part of the structure and the building envelope.

A log home is covered under the statutory warranty as long as it has been constructed in accordance with Part 9 of the Ontario Building Code and otherwise meets the “new home requirements.”

  1. Shell Homes

A shell home is a home that meets the “new home requirements” where the builder completes the “shell” but does not finish the interior elements.

For single family homes and low-rise condominiums, the “shell” includes the essential elements (footings/foundation, framing, exterior cladding, building envelope, and heating, electrical and plumbing distribution systems) and installation of insulation, vapor barrier and drywall.

For high-rise condominiums, the “shell” includes the essential elements and installation of insulation, vapor barrier and drywall on the exterior walls only; the builder is not required to install drywall on the interior walls.

Statutory warranty coverage applies to the materials supplied by and work completed by the builder.

  1. Resale of “New” Homes

Statutory warranty coverage for a home that meets the “new home requirements” begins on the date the home is completed for possession and remains in effect until the end of the warranty period, even if the home is sold before the warranty expires.

Thus, a resale home that is less than 7 years old may have some remaining statutory warranty coverage.

  1. Residential Condominium Conversion Projects

A residential condominium conversion project is when an existing non-residential building (e.g., warehouse, church) is converted into a condominium and pre-existing elements of the building, such as the foundation or frame, are incorporated into the new design and construction of the project. 

Buildings that were originally built for residential use – like rental apartment buildings – would not qualify for coverage unless otherwise specifically permitted.

Illegal Building

It is illegal for a builder to enter into an Agreement of Purchase and Sale or construction contract with a purchaser if the builder is not registered with Tarion.

It is also illegal to begin construction of a home or condominium without first enrolling it with Tarion. Offenders will be charged by Tarion under the Ontario New Home Warranties Plan Act.

Tarion employs a team of seasoned investigators to uncover builders and vendors in Ontario who fail to register and/or to enrol new homes with Tarion.  

For a list of builders who have been charged in the past 3 years, please refer to our Illegal Building Conviction Reports.