What to do when disaster strikes

You’ve been looking forward to moving into your new home for months. As you waited, you’ve planned where your furniture is going to go and pictured yourself preparing meals in your new kitchen and cozying up by your fireplace on cold nights.

But your dream has just gone up in smoke. Literally. A fire consumed your soon-to-be-finished house and you’re left wondering what to do now.

When you own a home that is damaged or destroyed by fire, that’s usually when you put in an insurance claim. If your home is still under construction however, you do not yet own it and it is up to the builder to address the situation.

In the unfortunate event of a fire

So if your new home suffers a fire, what should you expect from your builder?

House roof on fire

First, the builder should immediately notify you about the fire, explain the cause and let you know that they will follow-up on how this will affect your closing date.

Unfortunately, fires can happen at any point in construction from the time the builder starts framing the structure to the final stages of completion. What happens if your home was damaged when you were only weeks from moving in and already sold your current house? Is there any financial compensation for the delay?

How your new home warranty protects for fires

Under the Ontario New Home Warranties Plan Act, new home buyers may be entitled to Delayed Closing compensation if a builder fails to meet the agreed upon closing date. However, where there is an ”unavoidable delay” (a particular situation which leads to a delay in the closing date through no fault of the builder), no delayed closing compensation is payable. Events that result in an “unavoidable delay” are set out in the Addendum to the Agreement of Purchase and Sale and include a fire since the builder must postpone the closing date to repair the damage or re-construct parts or all of the home.

Under the Ontario New Home Warranties Plan Act, new home buyers may be entitled to Delayed Closing compensation if a builder fails to meet the agreed upon closing date.

Once the builder has determined the impact of the fire and how it will affect construction and delivery of the home, they are required to provide you with written notice of your new closing date. If they don’t, you may be able to make a claim for delayed closing compensation up to a maximum of $7,500.

You may also have a valid claim if the fire was caused by the builder either through something they did or didn’t do.

Igniting an issue

Our Warranty Services team recently dealt with a situation in which the chimney of a newly completed home was filled with construction debris. During the Pre-Delivery Inspection, the builder’s representative turned on the fireplace and it ended up igniting the debris and causing a fire. The fire chief confirmed the cause of the fire and the homeowner consequently received delayed closing compensation since the fire delayed the homeowner from taking possession of the home and the builder’s failure to remove the construction debris had contributed to the fire.

Turn to Tarion for help

While the last thing anyone wants is to lose their new home before they’ve even had a chance to move in, it’s important to know your rights if it happens to you. Tarion is here to help. If you want to learn more about delayed closing compensation, check out this link or contact us at 1-877-9-TARION or email customerservice@tarion.com.


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.