Buying a New Home – Tarion Warranty Facts


New Home Warranty

It’s on the House Aubrey LeBlanc Toronto Star Saturday Dec. 16/95  “New In Homes Section”  Separating Fact from Fiction

Separating fact from fiction is every new home buyer’s responsibility when it comes to clearly understanding their new home warranty.

Fiction: Some consumers assume the Ontario New Home Warranty Program (ONHWP) offers blanket warranty coverage.

Fact: For a one-time fee, home owners receive a comprehensive financial and construction defect warranty.

The warranty program provides $100,000 total maximum coverage on each home or condominium unit and deposit loss, not exceeding $20,000. The program also offers protection against delayed closings, delayed occupancy and substitutions made without your agreement if the items of construction or finishing were specified in the agreement of purchase and sale.

New home owners receive a one-year warranty against defects in work materials and Ontario Building Code violations.

For homes enrolled on or after Jan. 1, 1991, the builder provides a two-year warranty against: water penetration through the building envelope including the basement or foundation walls; defects in the electrical, plumbing and heating delivery systems; protection against health and safety Ontario Building Code violations. Materials and work in the exterior cladding, caulking, windows and doors must also be defect free.

New homes enrolled on or after Jan. 1, 1991, have major structural defect coverage lasting for seven years while homes enrolled before that date are covered up to five years.

Fiction: Many home owners believe the warranty program’s warranty coverage has an unlimited time period. Unfortunately, new home owners only realize their mistake after they lodge a complaint of claim when the warranty on the particular problem has expired.

Fact: New home owners should document all problems in writing before the warranty period ends. The warranty program can not pay claims if we don’t have notice of the problem within the warranty time lines. Forward copies of this documentation by registered mail to the builder and the warranty program. Home owners should note giving notice on the Certificate of Completion and Possession is not sufficient Fiction: Some consumers and professionals involved in the home buying process assume all resale homes are automatically not entitled to warranty protection.

Fact: Since the program’s warranty coverage is transferred with title and does not remain with the owner, some resale homes are covered by warranty. The program’s coverage takes effect from the date of possession and remains in effect on the house or condominium unit even if it is sold before the end of the warranty period to a new owner.

Fiction: Once they move into their new abode, home owners can sit back and let their new home warranty work for them.

Fact: Proper maintenance of a new home not only protects a home owner’s major investment but ensures they receive all the warranty coverage offered by the warranty program. Problems caused by home owner neglect, such as allowing caulking to wear down leading to moisture damage, are not covered.

Fiction: Home owners who encounter problems in the homes only need to contact their builder. Fact: If home owners discover a problem they should fully document it in writing and send it to the builder and a copy to the warranty program prior to the end of the warranty period. This documentation defines and dates the defect. In your letter describe the problem and ask the builder to correct it. Include the home’s enrolment number, the complete address, the lot and plan numbers or the condominium address and unit number.

The warranty program will stand in the builder’s shoes if the builder is unable to correct the defect.

Fiction: Some new home buyers, lawyers and real estate agents believe that HUDAC still exists.

Fact: The acronym HUDAC stands for the Housing and Urban Development Association of Canada, an organization founded in 1971. It administered the voluntary warranty program until 1976 when the provincial government passed the Ontario New Home Warranties Plan Act making the program mandatory. HUDAC continued until 1983 when the program took on its new name, the Ontario New Home Warranty Program.

The facts regarding the program and new home warranty are explained in the booklet, What Every New Home Buyer Should Know.

To obtain your free copy con tact your nearest ONHWP office or call toll free 1-800-668-7504.