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Builders, Buyers And A New Home Warranty Program

Written by Posted On Tuesday, 06 July 2004 00:00

Too many Canadians associate "new" with "problem free" and are disappointed when their new house or condominium is far from perfect. As housing demand continues to give builders and tradespeople the upper hand, new home buyers should use every resource available to ensure they get what they want.

Canadian new home buyers often overlook two questions vital to final satisfaction with their new house or condominium. In early conversations with a builder or developer, they should make sure they get clear -- ideally written -- answers to these questions:

  1. Which warranty program or warranties cover this new house/condominium?

  2. What are the terms of this warranty?

Savvy buyers will then contact the organization offering the warranty and find out exactly what is covered and what restrictions are involved. What specific timelines builders must work to and what dispute resolution services are offered? What clout does the warranty organization have with builders in settling a dispute?

Provincial and private New Home Warranty Programs all operate differently and are continually changing. Keep up to date during your construction project to save headaches later.

Tarion Warranty Corporation -- formerly the Ontario New Home Warranty Program (ONHWP) -- recently announced changes designed to "achieve excellence in customer service and to build long-term customer value for both purchasers of new homes and the Ontario home building industry."

Although education and builder licensing are key Tarion functions, its primary purpose is enforcement of the Ontario New Home Warranties Plan Act by ensuring that builders abide by the Act and consumers are protected when builders do not fulfill their warranty obligations. Over the years, Tarion, a private corporation, has paid out over $190 million in claims from its guarantee fund. Financed entirely by builder registration, renewal and home enrolment fees, Tarion receives no government funding and has guaranteed warranty protection for well over 1.2 million new homes. This program does not replace manufacturer warranties, nor does it cover additional builder warranties.

As the regulator of Ontario's new home building industry, Tarion is taking a more aggressive approach to finding and prosecuting illegal builders. In 2003, 831 charges were laid, a 50 per cent increase over 2002.

Tarion is consolidating its offices and operations and in October 2004 will open a new centralized Customer Centre in the Greater Toronto Area. Using its website and interactive design concepts, Tarion will continue to deliver services across Ontario. The new centralized facilities will house a Call Centre, a new centralized Claims Department and a new Builder Relations Department, created to "work proactively with home builders throughout the province." Claims Representatives will be based in home offices across the province.

"We are leaving an outdated service delivery system and changing to modern centralized facilities that will provide our employees with challenging new roles using the latest technology," said Tarion President & CEO, Greg Gee. "The goal of this restructuring is to provide both consumers and builders with a broader range of services delivered with a focus on excellence in customer service."

Tarion may help you become a better new home buyer through these and other services:

  • Call 1-800-668-0124 toll-free, if you have questions about warranty coverage or business processes, and to find out whether a builder is registered with Tarion.

  • Through "Find a Builder," you can learn how many claims a builder has had and the amount of money paid out.

  • Construction Performance Guidelines is a handy reference guide covering over 240 possible conditions and outlining minimum performance standards and defects that are covered under statutory warranty and those that are not.

  • Tarion requires builders to provide a Homeowner Information Package to new home buyers on or before their Pre-Delivery Inspection. Although buyers are encouraged to review this package again within the first 30 days after taking possession and again at least 30 days prior to the first anniversary of your date of possession, you might want an advance look at the full statutory warranty benefits you are entitled to. Remember, buyers are responsible for completing all Warranty Service Forms and for submitting copies, to both the builder and Tarion, by the deadlines indicated.

While every new home in Ontario comes with warranty coverage guaranteed by Tarion, don't be mislead into believing that every home that looks "new" to you is covered. Houses, semi-detached units and condominiums in any of the following categories are NOT covered by the new home warranty program:

  • Cottages and temporary or seasonal homes not built on permanent foundations and not sufficiently insulated to enable year-round living

  • Homes built on existing footings or foundations

  • Homes and condominiums built in converted buildings

  • Homes that have been lived in or rented by the builder before they are sold

  • Homes that are built by their owners.

Make sure your definition of "new" does not leave you without established warranty protection.

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