A construction site of a semi-built home

Five Things You Need to Know About Unavoidable Delays on Your New Home

We recently told you the story about Steve and Ava – the couple whose builder claimed their condo was not ready on time because of unavoidable delays. The builder had used the word “unavoidable” in the hopes of triggering a special provision in the warranty so he wouldn’t have to compensate Steve and Ava for the delay.

In this case, Tarion determined that the builder’s delays were not “unavoidable,” and ensured that Steve and Ava received their owed reimbursement. The story caught the attention of our readers who wanted to better understand what unavoidable delays are and what they need to know about this special provision.

If you’re about to sign a purchase agreement, or if you’ve already done so and are eagerly awaiting your closing date, here’s what you need to know.

1. Every builder in Ontario must provide a delayed closing warranty.

The delayed closing warranty holds your builder accountable for having your home ready by a certain date, or one that is properly extended. In 2008, we updated this warranty and introduced a mandatory Addendum, which must be attached to every Agreement of Purchase and Sale. The Addendum provides a timeline for certain dates, and explains the kind of extensions your builder can make to these dates.

2. Builders are obligated to meet closing dates, but they can’t control everything.

As in life, there are times when building a new house does not happen according to plan. Builders are accountable to do everything they can to meet the agreed upon closing date, but there are some things that are just out of their control so much so that it would not be fair to make the builder responsible for it. No one would reasonably hold a builder responsible for construction delays due to events like strikes, fires, explosions, floods, civil insurrection, pandemic, or an act of war, or terror. Neither do we.

At the same time, there are often things that happen during construction which are not the fault of the builder, but not so unavoidable that they are relieved of their warranty obligations. For examples, a delay by the municipality or difficulties in getting certain trades to complete their work are frustrating, but not so unavoidable to transfer the burden to the homeowner. The same goes for general winter conditions or period of heavy rain. Tarion expects builders to anticipate these conditions and make allowances for them. In these cases, the delay is not considered “unavoidable” so to relieve the builder of their obligations under the delayed closing warranty.

3. Unavoidable delays are rare, but they do happen.

Fortunately unavoidable delays are rare. But there have been instances where the builder’s hands were truly tied. This happened several years ago when elevator workers went on strike. Without these workers, the builder could not complete the elevators. And without elevators, he couldn’t get an occupancy permit from the City. The delay was truly unavoidable.

The best way to protect yourself is to read the delayed closing warranty attached to your purchase agreement.

businessman is checking final price in contract

 

4. The best way to protect yourself is to understand your rights.

If your builder doesn’t meet the occupancy date, it is up to you to apply for your rightful compensation. The best way to protect yourself is to read the delayed closing warranty attached to your purchase agreement. We also recommend that you sit down a real estate lawyer to understand your contract, preferably before you sign it. Make sure you know what kinds of delays are unavoidable and when to make a claim. And of course, you can always call Tarion just like Steve and Ava did.

5. Keep records.

Should you experience a delay that the builder could have avoided, you may be eligible to receive $150 per day to a maximum of $7,500 to cover your expenses during the delay period. To avoid losing out on your owed compensation, be sure to keep a record of all your correspondence with your builder as well as any and all receipts for expenses incurred during the delay period.

Lessons Learned:

  • Read your Agreement of Purchase and Sale carefully, and make sure you understand your warranty rights.
  • There are clear definitions in the warranty on what can be considered “unavoidable.” For more information about this, read about Tarion’s Delayed Closing Coverage.

Do you have a story?

Did you experience an issue with your builder that Tarion helped resolve? If so, share it with us so other homeowners have the information they need to protect their rights.