When you buy a new home in Ontario, there is an expectation that your builder will follow regulations, meet construction standards, and address any warranted issues that may arise. Understanding your rights under Ontario’s new home warranty program is essential not just for peace of mind, but for knowing what to do if something goes wrong.
In Ontario, home builders must be licensed (ours is #43453), follow specific conduct rules, and enroll all new builds in a mandatory warranty program. If your builder fails to honour their warranty obligations, you do have options and resources to fall back on.
Licensing and Ontario Home Warranty
When a home builder is licensed in Ontario by the Home Construction Regulatory Authority (HCRA), it confirms that your builder has met education, experience, and financial requirements.
Being licensed also means a builder is authorized to register homes under the Tarion new home warranty program. Without licensing, a builder cannot legally contract to build and sell new homes in Ontario. If a builder fails to enroll your home in the warranty program or doesn’t follow through on their obligations, both HCRA and Tarion have mechanisms in place to step in.
Professional Conduct and Home Protection
Builders are expected to conduct themselves professionally during all stages of the homebuilding process, from initial meetings to after-sale service. This includes:
- Clear communication about responsibilities and timelines
- Respectful treatment of homeowners
- Correct defects covered by the warranty
A failure to meet these expectations can trigger consequences, especially if it results in a warranty claim. The Ontario New Home Warranties Plan Act outlines builder responsibilities, and the HCRA has the authority to investigate and discipline builders who violate conduct standards.
Contract Homes and Warranty Coverage
When you hire a builder to construct a home on land you already own, this is considered a Contract Home under Ontario’s warranty rules. Unlike buying a new home directly from a builder or developer, a Contract Home may not automatically qualify for the same statutory warranties provided through Tarion. Read on to learn how Tarion applies to Contract Homes.
For most Contract Homes, the builder must still be registered with the Home Construction Regulatory Authority (HCRA) and must enroll the home with Tarion before construction begins. This makes sure the project is covered under Ontario’s warranty program. If a builder fails to enroll the home, it may not be eligible for statutory warranties, leaving homeowners without the protections they expect.
What Should Be Included In Your Agreement Of Purchase And Sale
When purchasing a home from a developer that owns the land, your Agreement of Purchase and Sale (APS) is one of the most important documents in your new home journey. It should clearly include:
- The builder’s warranty obligations
- Possession dates
- Payment schedules
- Description of materials and finishes
This agreement, paired with the Ontario New Home Warranty registration, connects you to Tarion coverage and helps resolve disputes when expectations aren’t met. If your contract is vague or if the builder avoids obligations, you can file a complaint with Tarion or HCRA.
Is Tarion Warranty Mandatory?
In most cases, yes. Ontario law requires that new homes be enrolled in Tarion’s warranty program, and builders must be registered with the HCRA to legally construct them. This includes Contract Homes, where a licensed builder constructs a home on land owned by the homeowner.
However, there are exceptions. If the homeowner takes full control of the build or exercises significant control over the construction or provides one or more of the essential elements of a new build, for example, by directly hiring trades, suppliers, and subcontractors, the project may not qualify for Tarion warranty coverage. In these cases, warranties would come directly from the trades and suppliers rather than through Tarion.
This distinction is important! If you want the protection of Ontario’s statutory warranty program, your builder must control the project and enroll home with Tarion. If you prefer to manage the build yourself, you assume responsibility for coordinating contracts and relying on individual warranties from trades.
Ontario New Home Warranty Program
The Ontario new home warranty program provides protection in several key areas.
For most new homes, coverage is structured across three time periods:
- 1-Year Warranty – Protection against defects in materials or workmanship
- 2-Year Warranty – Coverage for major systems such as heating, plumbing, electrical, and for issues like water penetration.
- 7-Year Warranty – Coverage for major structural defects that affect the safety or livability of the home.
For Contract Homes, warranty protection also covers risks (up to $40,000 of financial loss) such as when a builder fails to complete the project or mismanages deposit funds. These protections are provided in addition to the 1-, 2-, and 7-year warranties, once the home is properly enrolled. If the builder fails to enroll the home, Tarion may step in to resolve issues (up to a set coverage limit) and then seek reimbursement from the builder, protecting homeowners from direct financial loss.
Common warranty issues include cracking foundations, poor insulation, window leaks, and electrical failures. To file a claim, homeowners must submit a warranty form to Tarion within the applicable timeline, often after giving the builder an opportunity to fix the problem first. Homeowners can also confirm a builder’s registration and track record by checking the Ontario Builder Directory on the HCRA website.
Key Takeaways for Ontario Homebuyers
It’s imperative you work with a licensed builder when purchasing a newly built home in Ontario. During this time, carefully review your contract, and confirm your home is enrolled in Tarion’s program. If your builder doesn’t honour their warranty, your next steps are to contact Tarion and the HCRA.
Resources like the Tarion website and HCRA can help guide you through filing claims, complaints, or verifying builder credentials.
Your Future, Your Home
It’s a cause for concern if your builder is unlicensed or fails to honour the new home warranty in Ontario. Tarion and the HCRA are designed to protect you as a homebuyer and enforce accountability. Before signing a contract, confirm your builder is licensed, review their warranty claims history on HCRA’s Builder Directory, understand the scope of your warranty, and know where to turn if promises aren’t met.
Avvio Fine Homes encourages every homebuyer to be informed, prepared, and confident as they navigate the homebuilding process in Ontario. Schedule your Discovery Session to start planning your future custom home.
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