If you are looking at purchasing a new house or condominium, you need to know about Tarion. Tarion administers the statutory warranty that comes with almost every newly built Ontario home.
For home buying consumers, this information is significant. Having a Tarion warranty means that you are protected when you purchase a brand new home or condo.
Critically, these protections are broader than most people realize. A Tarion warranty includes things like deposit protection, delayed closing coverage, loss protection for contract homes, and shelter against workmanship deficiencies.
The duration of the coverage is 1, 2 and 7 years, depending on the specific area of focus.
1-Year Warranty
This coverage requires that your home is properly built and is free from defects in materials. It ensures that the new property is fit for habitation, and further protects against Ontario Building Code violations.
2-Year Warranty
Homeowners are protected for the first two years against water penetration through the basement or foundation walls. You are safeguarded from defects in materials including windows, doors and caulking, or defects in work that result in water penetration into the building envelope.
Further, the warranty offers shelter against problems with electrical, plumbing, and heating delivery and distribution systems, along with defects in work or materials resulting in issues with exterior cladding.
7-Year Warranty
This is the warranty period most significant for homeowners because it speaks to the home's structural integrity. The 7-year component of the Tarion Warranty protects against defects in work or materials that impact structural or load-bearing elements of the home, along with work or material deficiencies that affect the use of a significant portion of the home.
When Is Tarion Coverage Included?
According to Tarion, new home and condo builders in Ontario need to be licensed by Tarion and provide a statutory warranty. The warranty that comes with almost every newly built home or condo lasts for seven years from the original date of possession or in the case of a condo, when interim occupancy is granted.
This means that if you are involved with the purchase or sale of a home that is less than seven years old, it should come with a Tarion-backed warranty.
You can verify if a home is under warranty coverage by searching in the enrolment tab of the Ontario Builder Directory. You can search by municipal address or by lot and plan number if the home is still under construction and does not yet have a municipal address.
When Is Tarion Not Included?
Not every new home is eligible for warranty coverage. For example, homes built by their owners are not covered. Neither are buildings that were once used for non-residential purposes but have since been converted to condominium units.
Tarion provides a list of the types of homes that are not covered by Ontario’s new home warranty program on its website. To find out if your home is enrolled in the warranty program, contact Tarion at 1-877-9-TARION.
Note that if a new home is built by someone who is not licensed as a new home builder and sold without warranty coverage, it could be an illegally built home.
Being licensed to build homes and providing the statutory warranty is not optional – it’s the law. Illegal builders can be charged and convicted under the Provincial Offences Act.
Is The Tarion Warranty Transferable?
If you are considering purchasing a resale home that was built in the last seven years, warranty coverage may still be active. Provided the coverage is still active, the warranty coverage may be transferred from the previous owner to the new one.
Tarion recommends that you first determine if your home is enrolled in the warranty program. To find out, contact Tarion at 1-877-9-TARION.
Is The Warranty Transfer Automatic?
No, it is up to the resale homeowner to activate the transfer. However, Tarion makes the transfer process relatively easy.
Just call Tarion and advise that you would like your name added to the file as the new owner. Make sure that you have your Agreement of Purchase and Sale and your transfer deed handy, because Tarion will ask for a copy for their records.
One final note. The province of Ontario is in the process of designating a new regulator to perform the function that Tarion has administered until now. This new regulator is known as the Home Construction Regulatory Authority (HCRA).
While the HCRA has not yet been formally designated as the new regulator at the time of this writing, it is expected that this may happen in the coming weeks or months of 2021.
Until the change is formalized, the province recommends that all warranty inquiries continue to be directed to Tarion.
Read the full consumer guides below:
Warranty Coverage for Freehold and Contract Homes in Ontario
Warranty Coverage for Condominiums in Ontario
References:
Tarion Warranty Corporation (2020). https://www.tarion.com/index.php/resources
Ontario Builder Directory (2020). https://www.tarion.com/ontariobuilderdirectory/vendors
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