New Home Warranty Act

Date: 16 Jun, 2015| Author: Elliott Dale

Thumbnail-LogoThe following summary is for information purposes and very important to any purchasers of new homes or condominiums in Ontario.

Tarion Warranty Corp. is designated by statute under the Ontario New Home Warranties Plan Act to administer consumer protection and has the authority to administer new home warranties for purchasers of properties. It is a private and not for profit corporation which administers such Act.

When a purchaser buys a new home, the builder of this purchaser’s home is mandated to be registered with the government through this Tarion agency/corporation.  Tarion offers partial protection for deposits paid to builders and for defects that might be discovered before or after the closing.  Tarion provides a warranty that makes the builder accountable for major structural defects and disclosure in Purchase Agreements as to closing adjustments costs is mandated. However, notwithstanding such disclosure it is important to have your own lawyer review the offer, explain the various builder’s adjustments such as hydro, water meter hook up charges and new or increased development and educational levies imposed by the local municipality and usually incorporated in the offer of sale to new home purchasers and passed on as an adjustment. The role of the lawyer is to attempt to reduce or cap such adjustments even if disclosed but not all the amounts are mandated in a dollar amount to be disclosed. Our firm at Dale, Streiman Law LLP takes the responsibility to review the offer and prepare an amendment to cap such adjustments, and with our experience at times depending on the builder and the subdivision area, as the adjustments can amount to over $7,000.

Often contained in new home purchase offers are other items such as being permitted to change the design of the lot to a mirror image, i.e. with the garage reversed to the other side notwithstanding the rendering and layout provided to the purchasers. Further, if the grade does not permit and the builder department requires same, then the door from the interior of the garage may not be installed. Further there is the issue of the location of the “street furniture” on the lot, i.e. the hydro transformer box, the hydrant, cable and Bell switchboxes and importantly any catchbasin to collect the water as in a sewer located in the rear yard or even the front yard, the location of the community mail boxes near or in front of the lot being purchased.  The attending lawyer at our firm will point these issues and recommend that the purchaser inquire of these issues as to location of the “street furniture”, the location of any schools, commercial buildings, walkways, parks, churches, and flood control water and ponds that might be adjacent to the new lot being purchased. Of course these adjacent installations impact on the purchaser’s decision for buying that particular lot or to switch to another lot and the location of these installation and structures may have a detrimental effect on the future value or marketability of your new home at a later date.

We at Dale, Streiman Law take pride in assisting all our clients in these questions that arise on new home purchases. Please feel free to meet with any of the lawyers on our real estate team.