Is Your New Home Covered By the TARION New Home Warranty Program?
A few years ago, I sold a brand new, high-end, custom home in the Blue Mountains that was listed for sale by another Broker. The builder, who had done an excellent job building the house, had built several other million dollar plus homes across the province over the last decade and had excellent references.
Before presenting an offer from my clients, I checked for the builders registration on the TARION warranty website so I could see if there was any history of past problems. Low and behold, he was nowhere to be found. When I enquired about this, I was told by his agent that he was “not registered but would give a personal warranty on his workmanship.” Um, no. Not good enough.
The builder said that he built the house for himself and had occupied it by using it a few week-ends here and there. Again, not good enough. We presented the offer requiring him to enroll both himself and the house under the TARION program and suggested he call them to find out what we already knew – he had to register and register he did. In the end, my clients bought the house with the full warranty in place.
Generally speaking, every new home built for sale in Ontario must be registered with TARION. While there are some exceptions, this rule applies to most of the custom and subdivision homes we sell in this area yet, I have come across unregistered homes and builders time and time again. At a recent seminar here in Collingwood, the TARION folks left the room and by the end of the day had nabbed a few illegal builders around town. They’ve even sent a few to jail over the years.
Let’s say you are buying a home that John Smith had built for him as a spec home to sell upon completion. While John is not a builder, he owns the land and is a “flipper.” He hires ABC Construction to build a house from the foundation to the end and upon completion, he puts up a For Sale Sign. In this case, BOTH John Smith AND ABC Construction must be registered with TARION and the house must be enrolled under the program.
Here’s another example. You own a lot and happen to have super construction skills so you build your own home. Before you ever occupy it, someone comes along and offers you a price you can’t refuse so you sell it. You are now the builder of a home for sale and therefore, must register with TARION.
While TARION has an enforcement division employing former police officers, I imagine they rely on complaints or obvious advertising to find rogue builders but that is likely to change next year. Under the new Ontario Building Code Act, all municipalities will be sending information on every single new building permit to TARION. In addition, final inspections and issued occupancy permits will be required before the completion of a sale can take place.
Much to my shock, the TARION fellows told us during the seminar that 85% of custom homes do not complete as scheduled. 85%!!
Before buying a brand new home, check the TARION website to see if the builder is registered and if there have been any problems noted. If you see something called “Chargeable Conciliations,” you might want to run the other way as it represents a warranty dispute in the past.