Understanding Tarion Warranty for New Home Buyers in Ontario

When purchasing a new construction home in Ontario, one of the most valuable protections available to you is the mandatory warranty coverage provided through Tarion. Established in 1976, Tarion administers the Ontario New Home Warranties Plan Act, which requires builders to provide warranty coverage on all new homes built in the province.

Despite its importance, many new home buyers have limited understanding of what Tarion warranty actually covers, how to make claims, and what their responsibilities are in the process. This comprehensive guide will help you navigate the Tarion warranty system to ensure you receive the full protection you're entitled to.

What is Tarion and Why Does It Matter?

Tarion Warranty Corporation is a private, non-profit organization established by the Ontario government to protect new home buyers and regulate new home builders. Its primary functions include:

Administering the statutory warranty protection provided by builders
Licensing all new home builders in Ontario
Managing a guarantee fund that ensures warranty obligations are met even if a builder fails to do so
Investigating illegal building practices
Providing dispute resolution services between homeowners and builders

For new home buyers, Tarion serves as both a regulatory body that ensures builder accountability and a backstop that provides financial protection if a builder fails to honor their warranty obligations.

Warranty Coverage Periods: What's Protected and When

The Tarion warranty program provides coverage in three distinct periods, each protecting different aspects of your new home:

One-Year Warranty

The one-year warranty begins on your home's date of possession and covers:

Unauthorized substitutions of materials, products, or systems
Ontario Building Code violations affecting health and safety
Water penetration through the basement or foundation walls
Defects in work and materials including:
- Caulking, windows, and doors
- Drywall and paint finishes
- Trim and cabinetry
- Flooring and stair finishes
- Plumbing, electrical, and HVAC systems
Exterior defects including siding, masonry, and roofing
Detached garage and outbuilding issues

Two-Year Warranty

The two-year warranty begins on the same date as the one-year warranty and includes everything covered in the one-year warranty plus:

Water penetration through the building envelope, including the roof
Ontario Building Code violations affecting health and safety
Defects in the electrical, plumbing, and heating delivery and distribution systems
Exterior cladding defects causing detachment, displacement, or deterioration
Violations of the Ontario Building Code affecting health and safety

Seven-Year Major Structural Defect Warranty

This extended warranty begins on the same date as the one-year warranty and covers:

Major structural defects that:
- Result in failure of a load-bearing portion of the home
- Materially and adversely affect the ability of a load-bearing part of the home to carry, support, or transfer loads
- Adversely affect the use of a significant portion of the home for usual and ordinary purposes

Examples of major structural defects include:

Significant foundation cracks or settlement
Structurally defective roof trusses or framing
Structural defects in beams, columns, or load-bearing walls
Structural floor defects that affect load-bearing capacity

Deposit Protection: Safeguarding Your Investment

In addition to construction warranty coverage, Tarion also provides deposit protection:

Freehold homes: Up to $60,000
Condominium units: Up to $20,000

This protection applies if:

Your builder goes bankrupt
Your builder fundamentally breaches your purchase agreement
You have the right to terminate your purchase agreement

For condominium purchases, it's important to note that deposits exceeding $20,000 are protected separately under the Condominium Act, which requires these funds to be held in trust by the builder's lawyer.

Delayed Closing/Occupancy Coverage

Tarion also provides financial protection if your builder delays closing or occupancy beyond the dates specified in your purchase agreement:

Living expenses: Up to $150 per day to a maximum of $7,500 for temporary accommodation, meals, and furniture storage
Other expenses: Compensation for direct costs such as additional moving expenses or bridge financing costs

To qualify for this coverage, the delay must meet specific criteria outlined in the Addendum to your purchase agreement, and proper notice requirements must be followed.

Critical Dates and Pre-Delivery Inspection

Understanding Your Addendum

Every new home purchase agreement in Ontario must include a Tarion Addendum that specifies critical dates, including:

Tentative Closing Date: The builder's initial estimate of when your home will be ready
Firm Closing Date: The final date by which your builder must complete your home
Outside Closing Date: The absolute latest date by which closing must occur

For condominiums, similar dates apply but are referred to as "occupancy dates" rather than "closing dates."

The Pre-Delivery Inspection (PDI)

Before taking possession of your new home, you'll conduct a Pre-Delivery Inspection (PDI) with a representative of your builder. This critical step:

Allows you to identify any incomplete or defective items
Creates an official record of the home's condition before you move in
Provides an opportunity to learn about your home's operating systems

During the PDI, you'll complete a PDI Form that documents any issues observed. This form becomes an important reference for future warranty claims, but it is not itself a warranty claim.

PDI Best Practices

Prepare thoroughly: Research common defects and bring a checklist
Take your time: A proper PDI typically takes 2-3 hours for a house and 1-2 hours for a condominium
Document everything: Take detailed notes and photographs
Test all systems: Check all appliances, plumbing fixtures, electrical outlets, and HVAC controls
Inspect all surfaces: Look for scratches, dents, or damage to finishes
Verify completeness: Ensure all contracted items and upgrades are installed

Many homebuyers choose to bring a professional home inspector to their PDI for an expert assessment, which can identify issues you might miss.

Making Warranty Claims: The Process

Understanding the warranty claim process is essential for protecting your rights under the Tarion program.

Statutory Warranty Forms

Tarion provides specific forms that must be used to make warranty claims:

30-Day Form: Submitted within the first 30 days after taking possession
Year-End Form: Submitted during the last 30 days of the first year of possession
Second-Year Form: Submitted during the second year of possession for items covered under the two-year warranty
Major Structural Defect Form: Submitted for structural issues within the seven-year warranty period

These forms can be submitted through Tarion's online portal, MyHome, which provides a convenient way to track your warranty claims.

The Warranty Claims Timeline

After submitting a warranty form, a specific timeline applies:

Builder Repair Period: Your builder has 120 days (30-Day Form) or 150 days (Year-End Form) to resolve the warranted items
Homeowner Request for Conciliation: If items remain unresolved after the builder repair period, you have 30 days to request conciliation from Tarion
Tarion Conciliation Inspection: If requested, Tarion will conduct an inspection within 30 days
Tarion Decision: Within 30 days after the inspection, Tarion will issue a Warranty Assessment Report determining which items are warranted
Tarion Repair Period: If warranted items remain unresolved, Tarion will work with you to resolve them, potentially through financial compensation or arranging for repairs

Emergency Situations

For emergency situations that require immediate attention, such as:

Complete loss of heat during winter
Gas leak
Complete loss of electricity
Complete loss of water supply
Plumbing leaks that require water shutdown
Major water penetration
Sewage backup

You should:

Contact your builder's emergency service immediately
If your builder is unavailable or unresponsive, contact Tarion's emergency line at 1-877-982-7466

What's Not Covered: Understanding Exclusions

While Tarion warranty provides extensive protection, certain items are excluded:

Standard Exclusions

Normal wear and tear
Normal shrinkage of materials (such as minor cracks due to drying)
Damage caused by improper maintenance
Alterations, deletions, or additions made by the homeowner
Secondary damage caused by defects under warranty (such as damage to personal property)
Supplementary warranties provided by manufacturers (appliances, etc.)
Site conditions beyond the builder's control
Damage caused by municipal services or utilities

Maintenance-Related Issues

Many homeowners are surprised to learn that certain maintenance-related items are their responsibility, not warranty issues:

Adjusting interior doors as the home settles
Caulking maintenance around windows, doors, and plumbing fixtures
Sealing minor cracks in concrete floors, walls, or driveways
Maintaining proper grading around the foundation
Clearing clogged drains, gutters, or HVAC filters

Homeowner Responsibilities and Best Practices

To maximize your warranty protection, you should:

Maintain Proper Documentation

Keep copies of all correspondence with your builder
Take dated photographs of any defects or issues
Maintain a log of all conversations with your builder, including dates, times, and what was discussed
Save copies of all warranty forms submitted

Follow Proper Maintenance Procedures

Review and follow the home maintenance guidelines provided by your builder
Perform seasonal maintenance as recommended
Address minor issues promptly before they develop into larger problems
Keep records of all maintenance performed

Understand Claim Deadlines

Mark important warranty dates on your calendar
Submit warranty forms even if issues seem minor
Don't wait until the last minute to submit forms
Request conciliation if your builder fails to resolve warranted items

Working Effectively with Your Builder

While Tarion provides important protection, the most efficient resolution typically comes through working cooperatively with your builder:

Communication Best Practices

Maintain a professional, documented approach to all communications
Clearly describe issues with specific details (location, nature of the problem)
Provide reasonable access for inspection and repairs
Follow up verbal discussions with email summaries
Acknowledge when repairs are completed satisfactorily

When Builder Relations Become Difficult

If your builder is unresponsive or disputes warranty coverage:

Escalate to senior management at the building company
Document all attempts at resolution
Submit warranty forms within required timeframes regardless of builder promises
Request conciliation through Tarion when necessary
Consider consulting with a lawyer who specializes in new home warranty issues

Condominium-Specific Warranty Considerations

Condominium purchasers have additional warranty considerations:

Unit vs. Common Element Coverage

In condominiums, warranty coverage is divided between:

Unit warranties: Cover defects within your individual unit (similar to freehold homes)
Common element warranties: Cover shared areas like hallways, amenity spaces, exterior elements, and building systems

Common element warranties are administered by the condominium corporation, not individual unit owners. This means:

The corporation submits warranty forms for common elements
Individual owners should report common element issues to property management
The corporation's board of directors makes decisions about warranty claims

Performance Audit

Within the first year of registration, the condominium corporation must conduct a Performance Audit of the building's common elements. This comprehensive inspection:

Identifies deficiencies in the common elements
Forms the basis for common element warranty claims
Is typically conducted by engineering professionals

As a unit owner, you should:

Report common element issues to your property management promptly
Attend owner meetings where warranty matters are discussed
Review Performance Audit findings when available
Understand which elements are unit responsibilities versus common elements

Resources for New Home Buyers

To maximize your warranty protection, take advantage of these resources:

Tarion Tools and Services

MyHome Portal: Online system for submitting and tracking warranty claims
Tarion Construction Performance Guidelines: Detailed standards for determining whether an item is warranted
Tarion Builder Directory: Research your builder's history, including claims and chargeable conciliations
Tarion Home Owner Information Package: Comprehensive guide provided at the time of purchase

Additional Resources

Home inspection services specializing in new construction
Legal professionals with expertise in new home warranty issues
Homeowner advocacy groups and online forums
Municipal building departments for code-related concerns

Recent Changes to Tarion and Future Developments

The Tarion warranty system has undergone significant changes in recent years:

2020-2022 Reforms

Separation of the regulatory function from Tarion with the establishment of the Home Construction Regulatory Authority (HCRA)
Enhanced disclosure requirements for builders regarding their track record
Improved transparency in the claims process
Expanded deposit protection limits
New measures to address conflict of interest concerns

Upcoming Changes

Further reforms are anticipated, including:

Potential expansion of warranty coverage periods
Enhanced protection for condominium conversions
Improved dispute resolution processes
Additional consumer education initiatives

Stay informed about these changes by regularly checking the Tarion website and subscribing to their homeowner communications.

Conclusion: Maximizing Your Warranty Protection

The Tarion warranty program provides valuable protection for new home buyers in Ontario, but maximizing this protection requires understanding your rights and responsibilities. By familiarizing yourself with coverage periods, claim procedures, and maintenance requirements, you can ensure that your new home investment is properly protected.

Remember these key principles:

Document everything, from your PDI to all communications with your builder
Submit warranty forms within required timeframes, even for minor issues
Maintain your home according to recommended guidelines
Work cooperatively with your builder when possible, but know when to involve Tarion
Stay informed about your warranty rights and any changes to the program

With proper knowledge and proactive management, the Tarion warranty can provide valuable peace of mind and financial protection throughout your first seven years of new home ownership.