Ontario’s New Home Warranty Turns 40!

2016 marks Tarion’s 40th anniversary of serving new home buyers. After four decades, we have the experience and vision to enhance fairness and build confidence in the new home buying experience.

New building under construction with construction crane

Condominiums have become more attractive to new home buyers. New building techniques have continued to evolve, and so have the issues that home builders and buyers face.

Over the years, the price of homes has risen dramatically. Condominiums have become more attractive to new home buyers. New building techniques have continued to evolve, and so have the issues that home builders and buyers face. The passing of a revised Condominium Act and the continuous changes to the Building Code have endeavoured to keep up with these constant changes. Tarion has also improved the warranty protections for new home buyers as the industry has evolved.

Today, new homes have three separate warranties that last up to seven years.

Here’s a look at 10 important ways protection for new home buyers and owners in Ontario has gotten better over time:

  1. The warranty has expanded — New home building is not a simple endeavour. The techniques and codes are constantly evolving. Thankfully, so has the warranty. A new home in 1976 came with a one year warranty on defects and a five year warranty against major structural defects. Today, new homes have three separate warranties that last up to seven years. Almost everything – inside and out – that is supplied by your builder is covered.
  2. The coverage has increased — Did you know that the median price of a new house in Ontario 1976 was $56,000? Just as the price of homes has increased, so has the coverage. Today, the warranty coverage is up to $300,000, which was doubled in 2006 from $150,000.
  3. Inspections are now mandatory — Since 2003, builders have been required to conduct a Pre-Delivery Inspection with their buyers before they move into their new home. It makes sense: home buyers are given the chance to identify anything that may be incomplete, damaged, or missing, and to find out how to use and maintain their home.
  4. Builders must make repairs on time — Just as homeowners must file warranty claims within a certain time frame, builders also have a deadline to fix repairs under the warranty. These timelines were implemented in 2003 as one way to provide builders with a guideline to follow for customer service standards. If a builder does not complete repairs on time, a homeowner can request Tarion’s involvement to resolve the claim.
  5. Delays are covered — When the program began in 1976, there was no coverage for delays in construction. As the industry has evolved and delays can be more prevalent, Tarion felt that home buyers should have some protection for certain delays. The Delayed Closing warranty provides up to $150 per day to a maximum of $7,500.
  6. Agreements are clearer — Tarion made updates to the Addendum in 2012 – which is attached to every Agreement of Purchase and Sale – to make certain items clearer for home buyers. Two issues were addressed: closing dates and additional costs. Both are now required to be itemized on single sheets so this information is more apparent when signing the deal.
  7. Holding builders to a higher standard — Tarion’s registration process has become more rigorous, involving an orientation session, a business interview, establishing financial sufficiency each year and a technical test. In 2015, Tarion phased in new education requirements for applicants. In September 2016, new registrant builders must complete courses in business planning, construction technology, customer service, and other areas before they can become registered.
  8. Making it easy to research a builder — The Ontario Builder Directory, available on Tarion’s website helps consumers make informed decisions. On it you’ll find all registered builders, and those who have had their licenses revoked or refused. It also shows their warranty record for the past 10 years, including any claims they have incurred and the dollar amount that Tarion has had to pay out to homeowners to settle warranty claims.
  9. An easier way to manage the warranty — Launched in 2009, MyHome gave new home owners a fast and easy way to manage their warranty online. MyHome lets homeowners submit warranty forms, schedule Tarion inspections, and upload relevant photos and attachments. Today, almost 90% of new home owners are registered for MyHome.
  10. A new home buyer Ombudsperson — Tarion established an Ombudsperson Office for new home buyers in 2006 to promote and protect fairness for new home buyers. Since then, the Ombudsperson’s insights and recommendations have informed changes to Tarion’s business processes that benefit consumers.

Buying a new home is one of the most significant, and financially impactful decisions that someone can make in their lifetime. Since 1976, Tarion has helped Ontarians make that decision with confidence.