TARION New Home Warranty Program
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WHEN DOES THE TARION NEW HOME WARRANTY COVERAGE BEGIN?
Warranty coverage takes effect from the date of closing (or, in a condominium, from the date of available occupancy). In the case of condominiums, warranty coverage also includes the shared areas referred to as common elements. The coverage for the common elements begins on the day the condominium corporation is registered. (Registration of a condominium usually takes place within a few months after available occupancy). Maximum coverage for a new residence is $150,000.00 (see details in www.Tarion.com).
Deposit coverage begins the moment a deposit is paid. When you buy a new freehold home, you are protected against financial loss, including your deposit, to a maximum of $40,000.00, if the builder does not complete the sale through no fault of the purchaser (up to $20,000.00 if purchase agreement signed before February 1, 2003). When you buy a new condominium, deposits are protected up to $20,000.00 since new condominium purchasers are protected for deposits over $20,000.00 by the trust and excess deposit provisions in the Condominium Act, 1998.
ONE-YEAR WARRANTY PROTECTION:
The program warrants that the home is free from defects in materials and workmanship, is fit to live in, and meets the Ontario Building Code requirements for one year from the date that purchaser was entitled to occupy.
Homeowners are responsible for notifying both the builder and the Tarion New Home Warranty Program in writing of any defects before the end of the first year. If Tarion does not receive notice in writing within the warranty period, the claim might not be allowed.
Builders will pass on to you any warranties given by manufacturers, suppliers and subcontractors that extend beyond the first year. In these cases, a purchaser should make any claims directly to the manufacturer or distributor.
- Walls/Ceilings Repairs to shrinkage cracks due to settling and corner bead splits will be done as a courtesy only once within the one-year period. Repair will not include repainting or replacing upgrades.
- Electrical Defects in materials or installation to wiring, light switches, duplex outlets, electrical panel and breakers are covered by this warranty. The addition of breakers or circuits or any alterations to the electrical system by the Homeowner voids this warranty item.
- Plumbing Defects due to materials or improper installation for all copper piping, drains, soldered joints and shut-off valves. Finishes on plumbing fixtures or faucets are covered by the manufacturer’s warranty where applicable. Plumbing blockages caused by Homeowners are not applicable under this warranty. The satisfactory operation of the faucets is covered under the manufacturer’s warranty where an extended warranty applies.
- Doors Warped or ill-fitting interior doors (except closet sliders and cabinet doors). Normal shrinkage and expansion due to humidity levels will occur and will usually correct itself in the first year.
- Ventilation Fans Performance of kitchen/stove hood fan and bathroom fan(s), provided the fans/filters have been kept free of grease and dirt build-up.
- Appliances Manufacturer’s warranty-deal with the manufacturer directly.
Common Elements and Exclusive Use Common Elements
Common Elements (as defined by the Declaration and Description) are not covered under individual suite warranty. Where applicable, the Common Elements are covered under the Ontario New Home Warranty Program, separately. These issues should be addressed to the Board of Directors, via Property Management and copied to your Customer Service Representative.
TWO-YEAR WARRANTY PROTECTION:: For homes enrolled on or after January 1, 1991, the program warrants for two years against:
- Water seepage through the basement or foundation walls (in condominiums, this protection includes all below-ground areas such as parking garages)
- Defects in materials and work including caulking, windows and doors so that the building envelope prevents water penetration
- Defects in materials and work in the electrical, plumbing and heating delivery and distribution systems
- Defects in materials and work which result in the detachment, displacement or deterioration of exterior cladding
- Violations of the Ontario Building Code's health and safety provisions
SEVEN-YEAR WARRANTY PROTECTION:
Homes enrolled on or after January 1, 1991 are protected for seven years against major structural defects; a major structural defect is defined in the Ontario New Home Warranties Plan Act as any defect in materials or work that results in the failure of a load-bearing part of the home's structure, or any defect in materials or work that significantly and adversely affects the use of the building as a home.
The obligations under TARION warranty, are strictly limited to those repairs and time periods expressly set forth, and no other responsibility or obligation is to be implied. In any event, TARION will not be responsible for any indirect, secondary or consequential damage which may be attributable to defects to which repair obligations apply, including and, without limitation to, damage to the property of the owner or other chattels or other improvements made by anyone other than an authorized representative of the developer.
What’s Not Covered
Knowing what’s not covered by TARION warranty is just as important as knowing what is. New Homebuyers should become familiar with what is not covered under warranty protection:
- Defects in materials, design and work supplied or installed by the Homeowner/Purchaser, e.g., cabinets, flooring, and painting
- Secondary damage caused by defects under warranty. While the defects themselves are covered, the personal or property damage they cause is not. Often, Homeowner’s insurance covers secondary damage.
- Normal wear and tear
- Normal shrinkage of materials that dry out after construction
- Damage resulting from improper maintenance or Homeowner negligence. For example, dampness or condensation caused by Homeowner failing to maintain proper ventilation levels.
- Alterations or additions made by the Homeowner.
- Settling soil around the building or along utility lines.
- Damage caused by Homeowner, tenants and guests.
- Damage from insects or rodents, unless construction does not meet the Ontario Building Code.
- Damage beyond the Homeowner’s control, e.g., floods, acts of God, wars, riots and vandalism.
- Damage caused by municipal services and other utilities.
- Surface defects in work and materials noted in writing and accepted by the Homeowner at the time of possession.
- Homes that have been lived in or rented prior to sale.
- Home purchased from a receiver or trustee may not have warranty coverage.
PROTECTION AGAINST DELAYED CLOSING FOR FREEHOLD BUYERS:
A builder can extend the closing date up to a total of 120 days at any time prior to closing by giving written notice of the extension. However, if the builder does not give the following written notice of delays, you may be able to claim compensation for out-of-pocket expenses. A claim can only be made when you become the owner.
A builder anticipating a delay in closing of more than 15 days must notify you at least 65 days before the original closing date and set a new closing date. The builder may extend the closing date once by up to 120 days, if you are given written notice at least 65 days before the closing date.
A builder anticipating a delay in closing of no more than 15 days beyond the original or extended date as outlined above must notify you at least 35 days before the original or extended closing date and set a new closing date.
The builder is allowed up to five days grace regarding last-minute closing delays without penalty. Beyond that, any builder who fails to give proper notice will be required to compensate you up to $100 a day for living expenses plus all direct costs caused by the delay, to a maximum of $5,000.
To be compensated, you must complete the purchase. If the builder refuses to close, call your TARION Office for information on how this will affect coverage. Keep your receipts for expenses. Claim forms are available from TARION. You must submit your claim in writing to TARION before the end of the first year warranty period.
There is no compensation for delays caused by events beyond the builder's control, e.g., strikes, fires, civil insurrection, floods or acts of God, or for delays which are caused by the purchaser.
PROTECTION AGAINST DELAYED OCCUPANCY FOR CONDOMINIUM BUYERS :
(For Agreements of Purchase and Sale signed on or after April 1, 1991)
As in the case for delayed closings for freehold homes, the builder may extend the confirmed occupancy date once by up to 120 days, if you are given written notice at least 65 days before the confirmed date. The builder can also have a 15-day extension if you are given 35 days notice. In all cases, builders are allowed a five-day grace period.
Any builder who fails to give proper notice will be required to compensate you up to $100 a day for living expenses plus all direct costs caused by the delay, to a maximum of $5,000.
HOW TO RESOLVE YOUR COMPLAINT:
Be sure you bring any problems to the attention of your builder and TARION in writing before the end of the warranty period. For example, if you took possession of your new home on June 15, 1998, the first, second and seven year warranties expire at midnight on June 14 of the appropriate year. Make a note of when your warranty coverages expire.
At any time during the first 30 days after the closing date with the builder (or after the interim occupancy closing date for a newly constructed condominium), the Homeowner must use Tarion’s 30-day Form in which one can request the repair of any item, which appeared on the PDI Form, as well as any new items. Any time during the last 30 days of the first year the Homeowner is entitled to submit a single Year-End Form outlining any additional defects. When you follow up, and as you contact the builder’s representative for after closing service on outstanding matters, it is wise for you to send confirming letters or faxes each time you call the builder’s representative (and keep copies of such communications) so that you can provide copies of all correspondence to TARION if a complaint will ultimately be filed by you for lack of response by the builder in satisfying any outstanding deficiencies. Builders are rated by TARION with respect to their follow up on after closing service.
If TARION does not receive your notice in writing within the warranty period, your claim cannot be allowed. In your letter, describe the problem and ask the builder to correct it. Remember to include the enrolment number, your complete address, lot and plan numbers, or the condominium address and unit number. Condominium unit owners who experience common element problems should write to their Board of Directors once the condominium is registered. The board is responsible for bringing common element problems to the attention of the builder and TARION, if necessary.
Written notice of any complaint about a repair must be received by TARION within the time period for the repair warranty to apply.
Effective February 15, 2000, the deficit recovery fee of $100 (+GST +PST) is being removed. However, if the builder filed their enrolment form before February 15, 2000, the deficit recovery fee still applies.
NEW HOME PRE-DELIVERY INSPECTION (PDI):
If you have bought a newly constructed unit, you should attend at the property prior to closing to inspect and prepare a list of matters requiring the attention of the builder. The inspection appointment time must be arranged by you with the builder's representative. At the time of inspection, you will complete the Certificate of Completion and Possession for delivery by the builder to the Tarion New Home Warranty Program. All items outstanding must be noted. The warranty Certificate issued should be received by you and a copy should be provided to the lawyer prior to the closing of the real estate purchase. Note: Should you omit to note a deficiency at the P.D.I., you may note it on your 30 day report form if submitted within 30 days.
NEED MORE INFORMATION?
As a purchaser of a new home, you have various rights pursuant to the Program and, in particular, there are provisions by which you may compel the completion or rectification of prescribed items of construction. To familiarize yourself with your rights as well as the procedures and times within which they must be enforced, refer to the brochure entitled "What Every New Home Buyer Should Know". If you do not already have a copy of this pamphlet in your possession, please contact TARION at 5150 Yonge Street, Concourse Level, Toronto, Ontario M2N 6L8 Tel. 1-800-668-0124.
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