When purchasing a new home, a “New Home Warranty” is an option that must be offered to the purchaser to help cover malfunctions or damage in the first few years of owning the home. Under the New Home Warranty Act in Ontario, there are legal specifications for what must  be covered. Here is a detailed explanation of what the warranty will cover, and what it will not.

About New Home Warranties

In Ontario, the majority of new homes are given new home warranties. The main company that manages these new home warranties is Tarion. This company is dedicated to serving the public interest by “promoting fairness and building confidence in the new home buying experience.” Tarion offers information on one, two, and seven year warranties, as well as ensuring that the laws for new builds are followed, so the consumer is protected. Under the New Home Warranties Act of Ontario, the builder is required to guarantee to the purchaser that the home has been built by officially registered professionals and is free from defects in construction, is suitable for living, and it is built in accordance with the regulations of the Ontario Building Code. Under these regulations, there are certain defects that are covered under a new home warranty,and some that are not.

New Home Warranty

What is Covered in a New Home Warranty: For any home built after January 1, 1991, there is a maximum warranty coverage for up to seven years. Each year covers specific defects that are covered, so here is a comprehensive guide to what is covered in each year.

Year One: In the first year of owning a new home, for a one time fee, the owner is guaranteed a coverage of up to $100 000 in the event that there is a defect in construction materials, or if there is a violation of the Ontario Building Code.

New Home Warranty

Extended Coverage: In the next six years,the warranty will cover more specific defects, such as water leaking through the outer walls, including the basement, electrical and plumbing defects,structural defects, and defects in the heating systems. Any exterior materials used in the construction of the home are also covered, including caulking, windows, and doors. The warranty will also offer protection against  any health and safety Ontario Building Code violations that happen in the first seven years of purchasing the home. The warranty does, however, require the homeowner to properly maintain the materials, and as such, if the deterioration of materials occurs due to neglect, the warranty will not be valid.

New Home Warranty

What is not covered: The Ontario New Home Warranty program covers many things, however, there are a few defects that are not covered, which are outlined in the Ontario New Homes Warranty Act. Here are a few examples of what is not covered under the warranty:

Defects in Materials Supplied by the Owner: In the case that the homeowner is the provider of building materials for renovations, or home improvement projects, and there is a defect in some of the materials they have purchased, the warranty will not provide coverage for those defects.

Secondary Damage Caused by Defects: If the homeowner does not address a defect immediately, and further damage is caused by that defect, the warranty will not cover the damage.

Normal Wear and Tear: The warranty will not cover any damage that is from regular daily wear and tear, such as scratches, fading of paint, or matted down carpets due to high traffic.

Damage Resulting from an Act of God: When speaking about warranties or insurance, an act of God is defined as “events that occur through natural causes and could not be avoided through the use of caution and preventative measures.” This means that if your house is damaged by flooding, lightning strikes, or wind, the warranty does not cover the damage incurred.

New Home Warranty

This list is only a few of the examples of defects that are not covered under a New Home Warranty. For a full list, the Ontario New Home Warranties Plan Act has a detailed description under the subsection Exclusions.

Now that you are aware of the coverage the new home warranty offers, it is time to get out and purchase the home of your dreams! Be sure to check out the Falconcrest Homes website for more information, and to stay up to date on the current and upcoming housing projects!


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