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What Does A Tarion Warranty Guarantee?

Apr 5 | Posted By
Tarion Warranty Toronto

Whether it be a house or a condominium, if you’re currently on the hunt for a new build in Ontario it’s very likely you’ve heard the term “Tarion” or “Tarion Warranty” being tossed around.

For first time home buyers especially, you might be wondering — What is it? Do I need it? Is it mandatory? To help give you some clarity and ease those home buying jitters, I’ve broken down exactly what it is below.

What is Tarion?

Tarion is a non-profit corporation that is empowered by the government to help enforce the Ontario New Home Warranties Plan Act And Regulations. To put it more simply, Tarion protects home buyers when purchasing new homes, helping ensure the quality of construction is up to industry standards. They work on educating buyers on illegal building practices and informing them on warranty rights as a new homeowner. For home builders and sellers on the other hand, Tarion works on making sure they follow building legislations set out by the government. To help regulate this, builders are actually obligated to sign up with Tarion and register any new construction projects or they risk being fined $100,000.

In Ontario, the Tarion Warranty Protection is mandatory with all new builds. Homeowners are obligated to pay for their warranty during the final closing of their home. This is an additional cost to keep in mind with all the other closing costs including legal fees, land transfer tax and more.

Now you might be wondering, “How much is the Tarion Warranty?”

That all depends on the cost of the house or apartment itself. The more expensive your condo is, the more expensive the warranty is going to be. To get an idea, if you pay $1 million for your new home, the cost of your Tarion Warranty will be $1,450.00. It’s important to note that, the Tarion Warranty only applies to brand new homes or condominiums, not ones that are only renovated.

What Does The Tarion Warranty Guarantee?

Now that we have a basic understanding of what the Tarion Warranty is, it’s time to dive into what it covers. There are three levels to this warranty, with different items being covered over different periods of time. During the length of the warranty, if there’s any breach between the homeowner and the builder (i.e. structural issues with the home), the homeowner is able to file a claim with Tarion who will look into resolving the problem.

It’s also important to keep in mind that Tarion doesn’t provide coverage for damage that is a direct result of poor maintenance of the home — upkeep is still the responsibility of the homeowner. Tarion only covers issues that may have been caused by poor materials or workmanship during the build of the house or condo. All in all, the Tarion Warranty covers homeowners for seven years after their initial purchase, and that coverage is broken down accordingly:

One year warranty – Protects against Ontario Building Code violations and unauthorized substitutions. Requires that every home (house or condo) is constructed properly without any defective materials. The home must also be livable and fit for habitation.

Two year warranty – Covers defects in the work or materials that were used to build the home, which may have resulted in deterioration, displacement or detachment. It also protects against water damage whether it be through the basement or foundation, as well as issues involved with the electrical, plumbing or heating systems of the home.

Seven year warranty – This covers any structural defects homeowners may experience with their home. This can include defects caused by poor materials, soil movement, collapse, cracks in the foundation and other serious complications.

While Tarion might feel like a frivolous expense on top of the mountain of expenses home buyers are expected to pay for when buying a new home, it’s important because it ultimately works to protect buyers in this hot real estate market.

To recap, Tarion helps home buyers and homeowners in the following areas:

  • Enforces their warranty and provides dispute resolution between homebuyers and builders, when necessary
  • Educates home buyers on the market and how to protect themselves from illegal builds
  • Helps ensure that new builders follow industry standards and building legislations set out by the government when building new homes or condos

If you’re looking into buying a new home or condo and need a hand navigating the real estate landscape, feel free to give me a call anytime! Let us help take away the stress of home buying and ensure you have a smooth move.


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