Who is TARION?

Tarion Warranty Corporation is a private corporation established in 1976 to serve as the Regulator of the home building industry in Ontario.  In this role, Tarion licenses all home and condominium builders pursuant to provincial legislation.  This statute requires Ontario home builders to provide every purchaser with warranty coverage that is guaranteed by Tarion.  The Corporation also establishes minimum time standards for after-sales service, and adjudicates warranty issues between homeowners and builders. TARION is operated by builders and sometimes criticized by buyers for favouring the housing industry.

Before you buy a new home visit the TARION web site to learn what is covered under the warranty program or use the "Find a Builder" to ensure they are registered and learn a more about a builders' history with Tarion.

Who Pays for Warranty Coverage?

Some builders include the TARION enrolment fee in the purchase price, but there is a growing trend to have buyers pay the builder to enroll their new home or condo. The builder then submits the enrolment fee to TARION. The cost of the warranty is based on a scale relating to the sale price of a home or condominium. As of January 1, 2008 enrolment fees (PST & GST included) ranged from $367.25 for a $100,000 purchase to $846.50 for a purchase over $500,000. 

Changes to the TARION warranty

A report by the Ontario Home Builders' Association estimates that nearly half of the province's builders experienced delays in 2006 and that about 20,000 of the 63,000 homes built that year were affected. Delays attributed to shortage of skilled labour, time consuming approval processes, which include permits for environmental conditions and zoning. Data obtained from a private marketing company indicated that 42% of Ontario home buyers (averaged a delay of approximately 110 days) and 32% of condominium buyers reported a delay (averaged a delay of 123 days) from the original date set for closing.

In the Ottawa area, the survey indicated that delayed closings were much lower than the provincial average, and 5% of those surveyed indicated their home was ready ahead of schedule and delivered early.

In 2006, the Minister of Government Services asked TARION to make changes to discourage delays and to introduce conditions that were balanced and fair to consumers and builders. A 12 person committee was formed, headed by a former Supreme Court Justice, members of the home building industry, legal profession, Consumers Council of Canada and after two years their recommendations were adopted and will come into play on July 1st, 2008.

At that time, Ontario consumers who purchase a new home or condominium unit will benefit from the most comprehensive warranty protection against delays in closing or occupancy that is available anywhere in Canada.

What does TARION warranty cover?

The new warranty provisions established precedent-setting disclosure requirements for all Agreements of Purchase & Sale for new homes, together with new standards for notifying purchasers in the event of any potential delays in taking possession of their new home.  In addition, the new Regulations will provide the highest amount of compensation available in Canada to consumers who experience a delay in the closing of the purchase of their new home.  These new policies will also help new home buyers to have a better understanding of the potential for delay that could arise in different circumstances when shopping for a new home.

A new standard form information statement will be required in every Agreement of Purchase & Sale for a new home (known as “the Addendum”), which will outline for consumers the closing details in clear language, including disclosure of critical information about the current status of the property being purchased.

As of July 1^st, 2008 the new regulations require Builders or their sales representatives to disclose key information to a buyer at the time of purchase, most important is whether they are being offered a firm or tentative closing date. This information will assist consumers to better understand whether a delay in closing is probable, and will help buyers to manage their own affairs, including the timing of the sale of their current home, notices to landlords  or make alternate living arrangements. Builder must notified buyer within 10 days after construction starts.

In addition, Builders will be required to be upfront with information and notifications of issues relating to: draft plan & subdivision approvals, status of permit & date it was issued, status of sewer and water services, as well as any conditions precedent that must be met in order to complete the contract. 

Acceptable delays can extend a tentative date by the builder but only twice for periods of 120 days each, then the tentative date becomes a firm date that is subject to compensation. On July 1st, home buyers who experience a legitimate delay in closing will be compensated at the new rate of $150 per day, raising total compensation to $7,500.00. Labour strikes, pandemics or fires are out of the builder's control and won't be subject to compensation.

Termination of the agreement will have few exceptions, and must be mutual, neither the builder, nor the buyer, will be allowed to unilaterally terminate the deal because of late closings.