Buying a new home? What to know about the warranty

Friday Feb 08th, 2019


Have you purchased a new home or condo from a registered builder? Good news – your new home comes with a warranty backstopped by Tarion, Ontario’s new home warranty provider.

In case you have any issues with your home, it’s important to know what the warranty covers. Here’s everything you need to know:

Deposit protection. If you put down a deposit when you signed the Agreement of Purchase and Sale, those funds are protected if anything goes wrong. Deposits on freehold homes with a purchase price of less than $600,000 are covered up to $60,000, while those $600,000 and up are covered up to 10 per cent of the purchase price to a maximum of $100,000. Since deposits on condominiums are required by law to be put in trust and should, therefore, be fully protected, the new home warranty covers only up to $20,000.

Delays in closing or occupancy. In your purchase agreement, your builder must provide a closing date when your home will be ready for move-in. If they fail to meet this date or one that has been properly extended, you may be eligible for delayed closing compensation.

Once you take possession, there are three types of warranties that cover different aspects of your new home:

One-year warranty:

  • Covers defects in work and materials and unauthorized substitution of materials;
  • Protects against Ontario Building Code violations;
  • Applies for one year, beginning on the home’s possession date.

Two-year warranty:

  • Protects against Ontario Building Code health and safety violations;
  • Covers water penetration through the basement, foundation or building envelope;
  • Covers defects in electrical, plumbing, heating systems and exterior cladding;
  • Applies for two years, beginning on the home’s possession date.

Seven-year warranty:

  • Covers major structural defects in the building;
  • Begins on possession and ends on the home’s seventh anniversary. 

As each warranty comes with certain responsibilities on the part of the homeowner, it’s important to understand what’s covered when you take possession of your new home. Find more helpful resources at

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