Buying a New Condominium from a Builder and the New Home Warranty Plan

When buying brand new Condo in Ontario from a builder you get a New Home Warranty which is administrated by Tarion Warranty Corp.  Tarion protects buyers of new condo units, if the builder is registered with them.  Some of the protections are:

• Deposits (or down payments) are guaranteed by Tarion up to a maximum of $20,000 plus interest if the builder goes bankrupt.  (Note: Condo purchasers can be protected for deposits over $20,000 IF they are held in trust)
• Units and common elements are insured against defects (see Warranty Coverage at a Glance).

After the condominium is registered, six or ten months later a performance audit is done.  Common elements are inspected so that deficiencies are identified on the year-end warranty claim form.  This form is submitted by the condo corporation since the “Condo Corp” is the owner of the common elements.  The performance audit should also includes a survey of the owners.  This gives the owners a chance to inform the Condo regarding any damage to their units caused by defects in the common elements. Tarion will not accept warranty claims submitted by Condo owners with respect to common elements.  The warranty process involves specific steps.  These steps must be taken by the Condo Corp for common elements and by the individual owners for issues pertaining to their own individual units.  Note that a balcony that is outside your unit may be considered an “exclusive-use” common element.  It is owned and maintained by the Condominium Corporation but its use is for specific owners only.