The builder's new home warranty coverage in Ontario and Tarion Warranty Corporation; what should you know?
There are several reasons people buy new construction homes, the feeling of the first owner of the house and design and upgrades' choices. However, one of the primary reasons people pay 10% - 20% more to buy a new construction home is the peace of mind that comes with the builder's new home warranty coverage.
As with anything related to new construction, a home warranty has its complexity that the new buyers need to be aware of. In this article, we'll look at the basics of the builder's new home warranty.
Note that the builder's warranty terms and conditions may differ in provinces (States); hence, you may investigate more details in your area.
New home warranty program in Ontario
In this article, we'll be focusing on the builder's warranty program in Ontario. To the standards and protect the consumers, new home builders in Ontario must provide home warranty coverage. Such a requirement benefits the home buyers in two fundamental ways: (1) to ensure builders provide the home building quality across Ontario, (2) to ensure builders addressing the forthcoming building issues.
Subdivision builders are usually large corporations, and they, in most cases, honour their obligations. However, things can go wrong. For any reason, if the builders fail to commit to their responsibilities, The Tarion Warranty Corporation will step in to ensure hew buyers receive the required warranty coverage. Keep in mind that it is the builders' responsibility to provide the home warranty and follow through. The only time Tarion will step in is when builders fail to provide the warranty as required. The Tarion Warranty Corporation is defined in Wikipedia as follows:
What is Tarion Warranty Corporation?
|| "Tarion, formerly known as the Ontario New Home Warranty Program, was created by the Government of Ontario in 1976 to administer the Ontario New Home Warranties Plan Act. Its primary purpose is to protect new homes' consumers by ensuring that builders abide by the provincial legislation. It is financed entirely by builder registration, renewal and home enrollment fees." Source: Wikipedia ||
Understanding the Tarion new home warranty and What kind of coverage you should expect
When does the coverage begin
The coverage takes effect when you sign the sales and purchase agreement and remains in effect after selling your home.
(1) Deposit Protection
The coverage begins from the time deposit is paid. The deposit protection is in place in the event of the builder's bankruptcy.
(2) Protection against Financial Loss for Contract Homes
The program warrants to compensate the buyers because of the builders' many failures to perform the contract.
(3) Compensation for delays in closing or occupancy
Buyers compensated in the case of delayed closings.
(4) One-year warranty protection
The program warrants that the home is free from defects and meets the Ontario Building Code requirements. Here is the list of the items covered in the first year of warranty coverage:
(5) Two-year warranty protection
(6) Seven-year warranty protection
The seven-year warranty works materials or works toward major structural defects, like the failure of a load-bearing part of the home's structure or any defect that affects the building's use as a home.
The home warranty program is for the benefit of the new homeowners. It is one of the primary reasons homeowners pay the extra money to have peace of mind. Several items are not covered with your new home warranty, and certain modifications may also void the warranty. However, these topics are beyond the scope of this article. Here we presented a basic guideline to the new home warranty program. You should review the home warranty program details (see the links below this article), as well as consulting your lawyer and real estate agents.
Here are three links to provide you with further details.
Ontario New Home Warranties Plan Act
Evolution of ONHWP Act and Tarion Warranty Corporation
Triton Providing Warranty Coverage
Real estate lawyer Toronto
The above Real Estate article was provided by David Khosravi, a leader in his field in North York, Willowdale Real Estate, Reach out to David via email: email@example.com or by phone: 416.990.2424