The pandemic has changed many things in our lives, including where we choose to live. Many of us who see working remotely as our future have decided to look farther afield for a place to call home.
As long as you stay in Ontario and buy a new build, there’s an extremely good chance your home will come with a mandatory warranty provided by your builder and backed by Tarion, the regulatory agency that administers new home warranties.
Here’s a quick breakdown of how you’re covered:
Deposit protection
If you’re looking at a freehold home (that is, where you fully own the house and the lot it’s built on), your deposit coverage depends on the home’s selling price: $600,000 or less, and you’re protected for up to $60,000; over $600,000, and you’re protected for 10% of your deposit to a maximum of $100,000.
If it’s a condominium you’re after, your deposit must be placed in trust as per the Condominium Act, and you have a further $20,000 in protection under the new home warranty.
Compensation for wrongful delays
Depending on the terms of your purchase agreement, your builder may be allowed to extend your closing date provided they follow the right procedures. If they don’t, you may be entitled to compensation. Compensation under the warranty is $150 per day to a maximum of $7,500. It’s intended to cover additional living expenses and other costs you incur as a result of the delay.
Seven-year warranty against defects
This warranty on work and materials starts on the day you take possession of your new home (or occupancy of your condominium) and is divided into three coverage periods.
In the first year, you’re protected against defects throughout the home, including violations of Ontario’s building code and unauthorized substitutions of materials written into your agreement.
Your two-year warranty covers plumbing, heating and electrical systems, as well as water penetration through the basement foundation or other parts of the home. Finally, you are protected against major structural defects for seven years.
Find more warranty information and resources for new home buyers at tarion.com.
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