How does Ontario’s new home warranty coverage compare to other provinces?

Here’s a story we don’t like to hear, but find it important to tell. Recently, there was news coverage about a group of new condo owners in Winnipeg who were each left with a bill of $100,000 because their home warranty fell short. The owners were given $50,000 from their home warranty provider – the maximum amount in their province – to cover structural defects that will cost up to $150,000 per unit to repair. This has left them with no other option but to take legal action in an attempt to recover the remaining $100,000 per home.

Almost all provinces in Canada have some form of new home warranty protection. But the protection is not mandatory in every province, and the models differ as you work your way across the country. It makes sense that not every province’s program is alike – after all, not every province or real estate market in Canada is alike. But when home buyers need protection, regardless of where they live, their warranty should be there for them.

So how does Ontario measure up to other mandatory warranty programs in Canada?

We’ve summarized the current coverage limits for single-family homes and condominium units across the country where the warranty is mandatory, just like Ontario.

Sources: British ColumbiaAlberta, ManitobaQuebec.

As you can see, Ontario’s new home and condominium owners have some of the highest coverage limits in the country. Across the province the mandatory warranty for new homes and condominium units is up to $300,000 with an additional $2.5 million for the common elements of a condominium.

Additionally, when you sign a purchase agreement there is coverage for deposits, and if your home is delayed beyond certain dates in your agreement, Ontario is the only province to provide compensation for these delays.

Once you take possession of your new home, almost everything the builder provides inside and out is covered in the first year. The major systems inside your home such as heating and plumbing are covered for two years, and major structural defects are covered for up to seven years. We are the only province in Canada to cover radon remediation, and homeowners are also provided up to $150 a day if they must move out of their homes while warranted repairs are being made.

Changing with the times

When it comes to a new home warranty, not only do the coverage amounts count, but also the sense of when these protections need to be improved. As the new home industry continues to
grow and progress, so has Ontario’s warranty. Deposit protection is currently being reviewed and improved. Coverage for residential condominium conversion projects – where certain existing buildings are converted into new condos – is anticipated to be in force in early 2018. When we see new developments in the new home building industry, we evaluate whether the scope and breadth of consumer protection in the province should also adapt and change.

What can we learn from this story?

What we take away from this story in Winnipeg is the importance of a warranty that is in constant evolution. Tarion’s job is to make sure Ontarians are adequately covered when they buy and live in new homes. It’s something we’ve been doing for more than 40 years, and we take pride in the continuous improvements that have been made so that our homes are safe, sound and there for us when we come home every day.

What you can do to protect yourself

As a new home buyer in Ontario, it is important that you know how you are protected. Before you sign a contract:

And while you’re at it, get to know Tarion – because we are here for you.