As an owner of a newly built home in Ontario you benefit from comprehensive warranty coverage which takes effect from the date of possession and remains in effect if the house or condominium unit is sold before the end of the warranty period. It is important to understand the Peace of Mind Advantage you receive when buying from an Ontario New Home Warranty Program (ONHWP) Registered Builder: What is The Total Maximum Coverage? The total maximum coverage on each home or condominium unit is $100,000. In condominiums, common elements are also covered from the date the Declaration and Description is registered, for the total of $50,000 times the number of units, to a maximum of $2.5 million. Septic system claims on homes enrolled on or after July 1,1993 are limited to $25,000. This cap is included in the overall maximum of $100,000 per home What is Covered? 1. Deposit Protection When you buy a new home you are protected against financial loss, including your deposit, to a maximum of $20,000, if the builder cannot or will not complete the sale, through no fault of yours. 2. Protection Against Delayed Closings Without Advance Notice A builder must not delay the closing date on your home without notifying you. - Major Delay: A builder anticipating a delay in closing of more than 15 days must notify you at least 65 days before the original closing date and set a new closing date. The builder may extend the confirmed closing date once by up to 120 days, if you are given written notice at least 65 days before the confirmed date. - Minor Delay: A builder anticipating a delay in closing of no more than 15 days beyond the original or extended date as outlined above must notify you at least 35 days before the original or extended closing date and set a new closing date. The builder is allowed up to five days grace without penalty. Beyond that, any builder who fails to give proper notice will be required to compensate you up to $100 a day in living expenses to a maximum of $5,000 total out-of-pocket expenses resulting from the delay. (Note: To be compensated you must close the sale. If the builder refuses to close, call your ONHWP Office for advice. Also remember to keep your receipts for expenses. Claim forms are available through your builder or your local ONHWP office.) Exceptions - there is no compensation for delays caused by events beyond the builder's control, e.g., strikes, fires, civil insurrection, floods or Acts of God. 3. Protection Against Delayed Occupancy for Condominium Buyers (for Agreements of Purchase and Sale signed on or after April 1, 1991) - Confirmed & Tentative Occupancy Dates - Every Agreement of Purchase & Sale must give either a confirmed occupancy date, or a tentative occupancy date that is clearly identified as tentative. If the Agreement gives a tentative occupancy date, then you have the right to receive notice of when you will be advised of the confirmed occupancy date. The notice is to be based on a date or an event which will trigger notice, e.g., the completion of the foundation or reaching a specific stage in construction. Notice: You must be given this notice, as outlined in the Agreement, no later than 120 days before the confirmed date, and no later than 30 days following completion of the roof assembly. If you are not given notice of the confirmed date 90 days prior to the tentative date in the original agreement, then the tentative date automatically becomes the confirmed date. - Earlier Occupancy - The builder is allowed to offer occupancy earlier than the confirmed date, but is not allowed to demand it. You must consent in writing to an earlier date. - Delays - As in the case for delayed closings for freehold homes, the builder may extend the confirmed occupancy date once by up to 120 days, if you are given written notice at least 65 days before the confirmed date. The builder can also have a 15-day extension if you are given 35 days notice. In all cases builders are allowed a five-day grace period. - Exceptions - A builder is not responsible for delays caused by strikes, fires, civil insurrections, floods or Acts of God. 4. Protection Against Substitutions Made Without Your Agreement You are protected against substitutions of key elements in your new home as set out in your Agreement of Purchase and Sale. Any items not specifically selected but included in the Agreement of Purchase and Sale can only be substituted by the builder with items of equal or better quality. Your Agreement of Purchase and Sale may also give you the right to choose certain colours and styles. If so, the builder cannot substitute these chosen items without your consent. If this occurs, you can demand that they be changed to what was originally specified, or that the builder make a cash settlement. Examples include: interior and exterior paint colours (not shadings) design and colour of cabinets and counter tops colour and type of kitchen and bath fixtures floor finishes style of interior trim. Most builders' Agreements of Purchase and Sale allow them the latitude to substitute major construction features such as reversing the house plans or changing the home's elevation. If your builder cannot supply your choice of colour or finish, you must be notified in writing. If you do not make new selections within seven days, the builder has the right to substitute options of equal or better quality. 5. One-Year Warranty Protection The builder warrants that the home is free from defects in work and materials, is fit to live in and meets the Ontario Building Code requirements for one year from the date of possession. Homeowners are responsible for notifying both the builder and ONHWP in writing of any defects before the end of the first year. If ONHWP does not receive notice in writing within the warranty period, the claim can not be allowed. Builders will pass on to you any warranties given by manufacturers, suppliers and subcontractors that extend beyond the first year. In these cases, you should make any claims directly to the manufacturer or distributor. 6. Two-Year Warranty Protection For homes enrolled on or after January 1, 1991, the builder warrants for two years against: - Water seepage through the basement or foundation walls. (In condominiums, this protection includes all below-ground areas such as parking garages.) - Defects in materials and work including caulking, windows and doors so that the building envelope prevents water penetration. - Defects in materials and work in the electrical, plumbing and heating delivery and distribution systems. - Defects in materials and work which result in the detachment, displacement or deterioration of exterior cladding, leading to detachment or serious deterioration. - Violations of the Ontario Building Code's health and safety provisions. 7. Major Structural Defects Homes enrolled before January 1, 1991 are covered for five years against Major Structural Defects. Homes enrolled on or after January 1, 1991 are protected for seven years. A Major Structural Defect is defined in the Ontario New Home Warranties Plan Act as: any defect in materials or work that results in the failure of a load-bearing part of the home's structure, or the home structure, or any defect in materials or work that significantly and adversely affects your use of the building as a home. What is Not Covered? Knowing what's not covered by your warranty is just as important as knowing what is. Buyers of new homes should become familiar with what's not covered under warranty protection: - Defects in materials, design and work supplied or installed by the homeowner/purchaser, e.g., cabinets, flooring, painting. - Secondary damage caused by defects under warranty. While the defects themselves are covered, the personal or property damage they cause is not. Often, homeowner's insurance covers secondary damage. - Normal wear and tear. - Normal shrinkage of materials that dry out after construction. - Damage resulting from improper maintenance or homeowner negligence. For example, dampness or condensation caused by homeowners failing to maintain proper ventilation levels or improper operation of a septic system. - Alterations or additions made by the homeowner. - Settling soil around the house or along utility lines. - Damage caused by homeowners, tenants and guests. - Damage beyond the homeowner's control, e.g., floods, Acts of God, wars, riots, vandalism. - Damage from insects or rodents unless construction does not meet the Ontario Building Code. - Damage caused by municipal services and other utilities. - Surface defects in work and materials noted in writing and accepted by the homeowner at the time of possession. - Temporary or seasonal homes, e.g. cottages, not built on permanent foundations and not insulated sufficiently to enable year-round living. - Homes built on existing footings or foundations. - Homes that have been lived in or rented. - Homes built in converted buildings. - Homes purchased from a receiver or trustee may not have warranty coverage. Article: Reality And Wish Lists Article: Watch Out For Real Estate Scams Article: Tips On Finding The Right House