Tarion Warranty; we’ve all heard of this if you’ve ever purchased a pre-construction condo or house before. In today’s blog post we go in depth as to what Tarion Warranty is and what this warranty plan covers you on.
Builders in Ontario are to provide warranty coverage, called Tarion Warranty, as described in the Ontario New Home Warranties Plan Act. This coverage includes protection for deposit; protection against Financial Loss for Contract Homes; compensation for delays in closing or occupancy; protection against unauthorized substitutions; one and two year warranties for certain defects in work and materials; a seven year warranty for major structural defects; and overage for condominium common elements (the common or shared area of condominium buildings).
The coverage limits of Tarion Warranty are as follows:
– Maximum statutory warranty coverage available for freehold homes and condominium units is $300,000
– Maximum coverage for condominium common elements if $50,000 times the number of units, up to a maximum of $2.5 million
– Maximum combined coverage for a condominium project (units and common elements) is $50 million
– Maximum of $15,000 for warranted damage caused by environmentally harmful substances or hazards and a maximum of $25,000 for coverage of septic systems
Tarion ensures new home buyers receive the statutory warranty coverage they are entitled to under the Act. In most cases, any issues can be resolved with the builder. But in the event that the builder fails to act, Tarion will intervene to honour their warranty obligations. It’s important to note, that although the warranty protection is broad, it is not all inclusive. There are limitations and exclusions to the warranty, and it is encouraged for home buyers to understand the full scope of the warranty. The statutory warranties are in addition to any warranties or rights the homebuyer may have under contract or otherwise.
Make sure when you are purchasing your next pre-construction property, you are purchasing through a builder that is covered under Tarion Warranty! If you have any other questions about Tarion Warranty, definitely feel free to reach out!