Are you out of luck if your builder goes out of business?

This year, Tarion’s Annual Public Meeting (APM) was held as a webcast event to provide people from across the province unprecedented access to our meeting. It was a huge success! More than 1,600 people from all across Ontario registered for the event. In addition, we received a record-breaking number of questions from homeowners. Most of the 200 plus questions dealt with specific issues new home owners were experiencing. Warranty Services representatives answered those questions as they came in, before, during and after the APM. One question resulted in a fair bit of follow-up and serves as a helpful general reminder of how the new home warranty works. Here’s what happened:

Marina (not her real name) was concerned about how the builder’s warranty works when the builder stops working. Literally.

Going, Going, Gone.

It had been a year and a half since Marina moved into her brand new home. She loved it! It was everything she hoped for and expected. Her family was settling in nicely into their new neighbourhood. Life was good. Of course, as with all things, there were a few outstanding issues.

For example, there was a bothersome crack on the landing’s concrete floor; one room in the home always seemed too hot or too cold, depending on the season; and Marina’s builder forgot to install vent covers when they drilled ventilation holes in her cold room – or what some might refer to as her cantina. Life was good, not perfect… and then Marina’s builder went out of business.

What to do?

How does a builder’s warranty work when there is no builder? Who covers the costs and addresses the issues? Who fixes them?

These are just a few of the questions that raced through Marina’s mind. What would you have done in her shoes?

businessman working in office with mobile phone and computer

The new home warranty is our business. We backstop the builder’s warranty and step in when your builder cannot or will not fulfill their warranty obligations.

Multiple choice

Do you:

  1. Contact the Better Business Bureau to investigate the status of her builder and when exactly they closed shop?
  2. Call Tarion to determine if we can help resolve the issues?
  3. Speak to parents, neighbours or random strangers to find out if they’ve ever had a similar experience?
  4. All of the above

I’d like to use a lifeline

Call Tarion. Immediately. The new home warranty is our business. We backstop the builder’s warranty and step in when your builder cannot or will not fulfill their warranty obligations. Yes, speaking to neighbours or random strangers might end with an invitation to dinner, but it is never the best source for current, accurate and expert information about Ontario’s new home warranty. That’s us. And we’re here for you.

What will Tarion do?

After contacting Tarion, we quickly confirmed that Marina’s builder was indeed no longer in business and therefore unable to meet their warranty obligations. As a result, we stepped in. Following an inspection at her home, we determined that the outstanding issues Marina’s builder did not fix, were in fact covered under the warranty. In the end, Tarion worked with Marina to get all the issues resolved.

Lessons Learned:

  1. If your builder goes out of business, for whatever reason, contact Tarion as soon as possible for guidance and on what to do next.
  2. When a builder is unwilling or unable to resolve warranty claims, we are here for you.

The goal of this blog is to provide you with general information about the warranty process by sharing real experiences from new homeowners. The blog should not be relied upon as legal advice. For privacy reasons, we will not address or resolve current cases in a public forum, so any comments or questions that are posted on this site that describe individual cases cannot be discussed. If you have a question about your warranty or Tarion generally, we would be pleased to discuss your issue, in the context of your particular circumstances and in confidence. We exercise reasonable care to avoid offensive, illegal or defamatory content from being posted, as well as comments that are intended solely for self-promotion or considered to be spam.