The following types of residential homes would not have statutory warranty coverage.
Residential Buildings Converted to Condominiums
While residential condominium conversion projects from existing non-residential buildings are covered by the warranty, buildings that were originally built for residential use – like rental apartment buildings – would not qualify for coverage unless otherwise specifically permitted.
If an existing residential home has simply been renovated, (e.g., rewired, addition added), the home is not new and would not be eligible for statutory warranty coverage.
Previously Occupied Homes
The statutory warranties apply to new homes and accordingly, do not apply to homes that have been previously occupied by the vendor/builder or rented out by the vendor/builder and occupied by other persons before being sold to a purchaser.
Owner Built Homes
A home is owner built if:
The owner builds the home him/herself on land that he/she owns; or
The owner hires someone else to build the home on the owner's land but the owner exercises significant control over the construction of all or part of the home;
and, in both cases, the owner (or his/her tenant) then resides in the home.
Exercising control over construction includes, for example:
Selecting, contracting directly with or terminating contracts with subcontractors, trades or suppliers; and/or
Reviewing, revising, approving, supervising or directing work or materials.
Whether the control exercised by the owner is significant depends on the nature, value and quantity of the work or materials controlled or contributed by the owner. For example, installing interior finishes will not disqualify the home from warranty coverage but would exclude from coverage those finishes and any defects relating to those finishes. On the other hand, controlling the construction of the foundation - an essential element of the home - may be significant enough to make the home an owner built home.
Owner built homes are not covered under the statutory warranties. But if the owner sells the home without first legitimately residing in the home, it is not an owner built home and the home is entitled to statutory warranty coverage. The owner must register with Tarion before selling the home and will be responsible for the warranty coverage on the home.
Homes Built on Existing Foundations
A foundation is defined as an arrangement of various “foundation units” through which the loads from a building are transferred to supporting soil or rock. A “foundation unit” refers to any one of the structural parts of a permanent foundation, such as footings, foundation walls, block, piers and pier type foundations constructed of cement products such as concrete, concrete block, wood or any other approved material.
A foundation does not include non-load bearing partition walls, weeping tiles, damp proofing, waterproofing, and
parging or encompass load bearing structures that form part of the above ground construction such as columns, beams, posts and above ground load bearing walls.
If part of the foundation of a home is pre-existing and the pre-existing portion exceeds 40% of the footings as determined by linear measurement (footprint), the home will not have statutory warranty coverage.
A seasonal home is a home that does not meet the year-round occupancy requirements of Part 9 of the Ontario Building Code and is therefore not built for year-round occupancy. Other considerations, such as seasonal use of the home or lack of year-round access, do not determine whether a home is seasonal for the purposes of the Ontario New Home Warranties Plan Act. Seasonal homes are excluded from statutory warranty coverage.
Some Common Elements
While common elements of a standard residential condominium project have statutory warranty coverage, the common elements of a vacant land condominium corporation or a common elements condominium corporation do not.
Still Have Questions?
If you have questions as to whether the type of home you are looking at is eligible for warranty coverage, please e-mail us at: email@example.com.
With your e-mail, please include the following: a copy of your Contract/Agreement of Purchase and Sale; the builder's name; the homeowner/purchaser's name; and the municipal address of the home.