The Ontario New Home Warranty Plan
The
information given here is intended to set out your rights under the Ontario New
Home Warranty Plan. In most cases, your first course of action will be to
contact your builder, but it is important to keep in mind the time limits for
making a claim under the Ontario New Home Warranty Program. More information is
available from their web site at www.tarion.com/
If
you are purchasing a new home from a builder, you may be covered by The Ontario
New Home Warranty Plan. The Ontario New Home Warranty Plan provides warranties
for defects in construction as well as for costs of delayed closings and
deposit protection in the event your builder declares bankruptcy. Details of
the protection offered by the Ontario New Home Warranty Plan is set out below.
Construction
Defects
The
Ontario New Home Warranty Plan Act provides that every vendor of a new home
warrants it to be constructed in a workmanlike manner, free from material
defects, fit for habitation, constructed in accordance with the Building Code,
and also free of major structural defects. Most defects are covered for a
period of one year from the date of completion or possession, but major
structural defects are covered for up to seven years. Certain defects in
materials, electrical, plumbing and heating, exterior cladding, and safety
related defects are covered for two years. A major structural defect is defined
as a defect in work or materials that results in the failure of the
load-bearing portion of a building, or materially and adversely affects its
load-bearing function or the use of the building for the purpose for which it
was intended. Claims for construction defects are limited to a total of
$100,000.00.
Completion
In
the event that the builder fails to complete your home, The Ontario New Home
Warranty Plan provides coverage of completion costs up to $5,000.00.
Deposit
Protection
The
deposit you pay to the builder is also covered under The Ontario New Home Warranty
Plan up to a maximum of $40,000 for homes purchased since February 1, 2003.
Delayed
Closing
A
third area of coverage is for costs in the event of delayed closing. Home
builders are allowed to extend closing under The Ontario New Home Warranty Plan
without liability provided that notice is given to the purchasers. For delays
more than 15 days, the builder is required to give a purchaser notice of the
delay at least sixty five days before the original closing date. For shorter
delays, only 35 days notice is required. The notice periods do not apply where
the delay is caused by strike, fire, flood, act of God or civil insurrection.
If
the builder extends the closing date by more than 120 days, either through a
single notice or by repeated notices, the purchaser may terminate the agreement
within the ten days after the 120 days delay has elapsed by giving notice to
the builder in writing. If you do not terminate the agreement in this time, but
the closing is delayed by a further 120 days, the contract will be deemed to be
at an end unless the vendor and purchaser both agree to continue it. Where
notice is not given in accordance with the regulations, the builder will be
liable for your costs up to $100 per day for delays beyond five days to a
maximum of $5,000.00.
Making
a Claim
If
you builder is still in business, you should first attempt to get them to
repair any defects or compensate you for your costs. In the event that the
builder is not in business, or you are unable to obtain a satisfactory result,
you can still apply for compensation from the Ontario New Home Warranty Plan.
You may also request that The Ontario New Home Warranty Plan get involved in
order to conciliate a dispute, or if that is not possible, you may make a claim
to The Ontario New Home Warranty Plan directly for compensation. In any event a
claim in writing should be made to The Ontario New Home Warranty Plan if you
have not resolved your dispute with the builder prior to the limitation periods
discussed in the next paragraph.
In
making a claim, you should be aware of the time limits contained in the
regulations to The Ontario New Home Warranty Plan Act. These regulations
require any claims for construction defects, other than major structural
defects to be made within two years of completion of the home. Major structural
defect claims may be made up to seven years after completion.
All
claims under the Ontario New Home Warranty Plan must be made in writing to The
Ontario New Home Warranty Plan. You should use registered mail for delivery of
your claim, and keep a copy of your claim letter as well as the registration
receipt. Alternatively, you may hand deliver your claim to The Ontario New Home
Warranty Plan and have them stamp confirmation of receipt on your copy. In the
event that you are unable to prove that you made a claim in writing within the
required time, your warranty claim may be denied.
Your
claim should set out in full detail each and every warrantable defect in your
home. In order to ensure that every defect is listed and described in detail,
you should consider having a professional engineer or contractor inspect your
home prior to making your claims.
Decisions
and Appeals
After
reviewing your claim, The Ontario New Home Warranty Plan may either retain a
contractor to repair deficiencies, make payment to you for the cost of repairs,
or deny your claim. In denying your claim, The Ontario New Home Warranty Plan
will give you a written notice of their decision together with reasons. If you
are dissatisfied with the decision, you may appeal to The Commercial
Registration Appeal Tribunal, although this can be a very time consuming and
costly process.
For
more information, contact Bryan
Dale.