October 15th 2024
In our previous article, we reviewed the obligations of home builders and the role of Tarion in protecting homeowners from losses of their deposit money and issues of delays. We will now consider the types of protections for individuals who discover issues with their home before and after closing their real estate transaction.
Defects and Repairs
When it comes to defects and repairs, two critical documents you are entitled to receive from your builder before closing is the pre-delivery inspection (PDI) and the Certificate of Occupancy from the relevant municipal authority. The PDI is an essential document where a buyer and builder address items in the home that may need further correction or improvement. The Certificate of Occupancy is an endorsement from the local municipality that certifies a building's compliance with applicable building codes, zoning regulations, and other laws. It confirms that the building is safe and suitable for occupancy. Having both of these documents before closing will ensure that Tarion can correct for the deficiencies that may be present on closing day.
It is important to know that Tarion has fairly strict timelines setting out how and when a purchaser is able to submit a possible claim. Let’s discuss this warranty coverage by breaking it down into four (4) key periods.
The 45 Day Period
For any defect or issue not identified on the PDI, a homebuyer must submit a report in writing to the builder concerning the issues within 45 days of taking possession of the new home. This initial report helps to document and address any problems that arise shortly after moving in. Meeting the 45 day timeline helps establish that the issues are not the result of the homeowners wear and tear or negligence and will improve the likelihood of any claim through Tarion. The 1 year period is the ultimate limitation for coverage on certain defects in your home, meaning a claim is still possible within the 1 year period even if not discovered within the 45 day period, such as if a rainfall discloses poor window installation outside of this period.
The First Year
If within the first year, a builder has not corrected for any defects identified in the PDI, or issues brought to the builder’s attention in writing within the 45 day period, a homeowner must then submit its claim to Tarion before the 1st year of ownership. If you miss this deadline, you may lose your right to have defects addressed under the warranty.
The First Two Years
This coverage extends to defects in electrical, plumbing, and heating systems, water penetration issues, and exterior cladding problems that may lead to detachment or deterioration of the home’s fixtures, siding, and roofing.
The Third to Seventh Year
This final period covers major structural defects that pose a threat to your home’s safety and stability. This means that if you’re purchasing a home that is less than seven years old from a previous owner, you may still be eligible for warranty coverage under Tarion. Tarion warranty is tied to the home, not the homeowner. This means that as long as the home is still within the seven-year warranty period, you can benefit from the remaining coverage. To transfer the Tarion warranty into your name, you’ll need to reach out to Tarion directly. The process is straightforward, and you can email customerservice@tarion.com.
Homeowners can learn more about their rights and the claims process by visiting tarion.com/homeowners
If you are looking for a real estate lawyer to handle your new home purchase closing, please reach out to Liddiard Law today!
Michael Liddiard, BA MA JD
Liddiard Law Professional Corporation
michael@liddiardlaw.ca