Buying a pre-construction home? Follow these five key steps to protect your purchase.

WHEN YOU GET THE KEYS to your newly built home, you don’t expect to find defects for at least a few years. And if one arose, you’d think your builder would be responsible for fixing it and footing the bill.

This is where your builder’s warranty, backed by Tarion, helps home buyers like you. As one of the most comprehensive warranties in Canada, it covers you up to certain limits from the moment you sign a purchase agreement until up to seven years after your home is completed.

You deserve to feel confident in the well-built home you were promised. That confidence starts with due diligence and following these steps as part of your pre-purchase checklist.

1. Make sure the builder is licensed. By law, a person who builds or sells a new home in Ontario must hold a licence. Check the online Ontario Builder Directory to confirm that your builder is licensed, review their key warranty performance statistics, and find out if their license has any regulatory actions against it. If you don’t see your builder’s name listed, consider a different builder.

2. Confirm all upgrades in writing. You could have warranty coverage for upgraded construction items that your builder improperly substitutes, but only if the upgrades are documented as part of your purchase agreement. When you request upgrades or customizations, get them described clearly in writing; and have your builder physically sign off on them.

3. Review your contract with a real estate lawyer. The purchase agreement is a legal contract between the builder and the home buyer and determines what’s included in the price of your home. This is especially important if you need to make a warranty claim. The agreement also includes important information about how or when the sale may be delayed or terminated. Consult a real estate or condo lawyer to review all the terms and conditions with you. 

4. Know how much of your deposit is protected. Ontario’s new home warranty plan protects deposits up to a certain amount, depending on the type and price of the home. Visit Tarion.com to check the maximum coverage for freehold homes and condo units, and to find explanations of when your deposit would be protected.

5. Plan to register your purchase agreement. As a not-for-profit consumer protection organization, Tarion can help you understand your builder’s coverage and guide you through a warranty claim. When you create a record of your purchase, you allow Tarion to provide you with key information on the builder’s warranty and coverage while you wait for the keys to your newly built home. Registering also allows Tarion to take swift action in case a builder is operating illegally. You can register at Tarion.com.