Ontario New Home Warranty and Protection Program

What the warranty covers, in tiers

The Ontario new home warranty is not one warranty. It is a set of coverages that expire at different times, all starting from the date you take possession.

The first tier is the broadest and the shortest. It covers defects in workmanship and materials, unauthorized substitutions, and the home being fit to live in. This is the tier to be fussy in — walk the house, list everything, and report it.

A middle tier runs longer and narrows to specific things: water penetration through the basement or foundation, defects in the electrical, plumbing and heating delivery systems, defects in the exterior cladding, and violations of the Ontario Building Code that affect health and safety.

The final tier is the longest and the narrowest. It covers major structural defects only — failures in the load-bearing structure that materially affect the use of the home. Everything cosmetic is long gone by then.

The warranty attaches to the home, not to you. If you sell within the term, the remaining coverage goes with the house to the next owner.

• Tier one: broad coverage of workmanship, materials, substitutions and fitness for habitation.
• Tier two: water penetration, delivery systems, exterior cladding, and Building Code health and safety violations.
• Tier three: major structural defects only.
• All tiers run from the date of possession, not from the date you signed the purchase agreement.
• Coverage transfers to a subsequent owner for the remainder of the term.

Deposit protection

Pre-construction buyers hand over large deposits years before they get a key. The warranty protects those deposits up to a maximum if the builder becomes insolvent or fundamentally breaches the agreement.

The maximum is not the same for a freehold home and a condominium unit, and the condominium side carries interest treated under the Condominium Act. Both maximums are capped figures that have been adjusted over time — confirm the current ones before you rely on the protection.

The important word is ‘up to’. If your deposit exceeds the protected maximum, the excess is not covered by the warranty. On a pre-construction purchase with a large deposit schedule, ask your lawyer specifically how much of your money is protected and how the rest is being held.

Delayed closing and delayed occupancy compensation

Pre-construction closings move. The warranty program regulates how a builder may change the date, how much notice must be given, and what you are owed when the rules are not followed.

Compensation is available for a delay that the builder is responsible for, calculated on a daily basis up to a maximum, covering the direct costs a delay actually causes — living expenses and storage while you wait.

You do not get this automatically. There are notice requirements and a claim deadline running from the delayed closing. Keep every receipt and every dated notice the builder sends you, from the beginning.

• The builder must follow prescribed notice periods before changing a closing or occupancy date.
• Compensation is a daily amount, capped at a maximum for the whole delay.
• You must submit a written claim within a set period after the delay.
• Keep dated notices, receipts for living expenses and receipts for storage.

What the warranty does not cover

This is where most new home owners get frustrated, because the exclusions are broader than people expect.

Normal wear and tear is not covered. Neither is damage you cause, damage from failing to maintain the home, or damage from a change you made yourself. Settlement and shrinkage within normal limits — the small drywall cracks in a first winter — are treated as normal, not as defects.

The warranty also does not cover items supplied by anyone other than the builder, damage from an act of God or third parties, or a home built by an unlicensed builder without enrolment. That last one is serious: an unenrolled home may have no warranty at all.

There are also defined performance standards. A floor is not defective because it is not perfect; it is defective because it falls outside a published tolerance. Read the standards before you write your list.

• Normal wear and tear, and normal shrinkage and settlement.
• Damage from owner neglect, owner alterations or improper maintenance.
• Materials, appliances or work supplied and installed by someone other than the builder.
• Damage caused by acts of God, insects, rodents or third parties.
• Secondary damage where the owner failed to take reasonable steps to limit it.
• Homes built by an unlicensed builder or never enrolled in the program.

How claims actually work

The process is deadline-driven, and the deadlines are the reason most claims fail. Coverage is real; the paperwork is unforgiving.

You submit forms at defined points inside the first tier and again before later tiers expire. Miss a submission window and that item is no longer claimable, even though the underlying defect is genuine and the builder agrees it exists.

Your first move on possession day is the pre-delivery inspection. Do it slowly, in daylight, with someone who is not emotionally invested in the house. Everything you find goes on the list. Sign nothing that says the home is complete when it is not.

• Complete a thorough pre-delivery inspection and record every item on the form.
• Submit the prescribed forms inside each submission window.
• Give the builder access to inspect and repair; refusing access can void a claim.
• If the builder does not resolve it, the warranty administrator makes its own assessment.
• There is a conciliation and appeal process if you disagree with an assessment.

Builder licensing is a separate check

Since the program was reformed, the warranty and the licensing of builders are handled by two different bodies. Tarion administers the warranties. A separate regulator licenses and oversees new home builders and vendors.

Before you sign a pre-construction agreement, check the builder in the public registry the regulator maintains. It shows licence status, and it shows their history — past complaints, conditions on the licence, disciplinary action.

A builder’s warranty record tells you more about your first years in the home than any rendering does.