Home warranty for new home buyers

Tarion Home Warranty Corporation announced that effective July 1, 2008, new home buyers who purchase Ontario real estate in the form of a  home or condominium  will benefit from the most comprehensive home warranty protection against delays in closing or occupancy that is available anywhere in Canada.

The new home warranty provisions have established precedent-setting disclosure requirements for all Agreements of Purchase & Sale for new home buyers, together with new standards for notifying new home buyers in the event of any potential delays in taking possession of their new home. In addition, the new regulations will provide the highest amount of compensation available in Canada to consumers who experience a delay in the closing of the purchase of their new home. These new policies will also help new home buyers to have a better understanding of the potential for delay that could arise in different circumstances when shopping for Ontario real estate.

"Recent surveys have shown that many Ontario real estate purchasers have experienced a delay in the occupancy or possession date for their new home. These delays can lead to frustrations for new home buyers who are looking forward to moving into their new home," said Greg Gee, former president and CEO of Tarion. This is where the home warranty comes in.

Benefits of the new home warranty to new home buyers

• A new standard form information statement will be required in every Agreement of Purchase & Sale for a new home (known as the Addendum), which will outline for new home buyers the closing details in clear language, including disclosure of critical information about the current status of the property being purchased

• The Addendum will feature a cover page that lists each important date related to a home's closing or occupancy.

• Builders will be required to disclose key information at the time of purchase, such as when construction is scheduled to start, whether a building permit has been issued, whether sewer and water services are currently available, as well as any conditions precedent that must be met in order to complete the contract. This information will help new home buyers to better understand whether a delay in closing is probable, and to manage their own affairs, including the timing of the sale of their current home

• A 50 per cent increase in compensation for new home buyers who experience a legitimate delay in closing, raising total compensation to $7,500 from $5,000

The new Delayed Closing home warranty came about as a result of extensive work by a Special Committee on Delayed Closings, organized by Tarion in early 2006, and chaired by former Supreme Court Justice Frank Iacobucci. The Special Committee was comprised of 12 members representing consumers, land developers and highly-respected builders of Ontario real estate. The Report of the Special Committee contained detailed recommendations covering all aspects of the new delayed closing home warranty, including rules and procedures. Tarion is currently providing training for all home builders across Ontario to ensure all new home buyers of Ontario real estate enjoy a smooth process.

"The new rules governing delayed closings will give Ontario the most extensive home warranty coverage regarding delayed closings that is available anywhere in Canada," Gee said. "These policies also represent important progress in improving the warranty protection available to those purchasing Ontario real estate."

Prior to July 1, 2008, new home buyers interested in learning more about Tarion's delayed closing policies should:

• Visit Tarion's website which will have a special section explaining the policies, together with an interactive web-based calculator that will allow new home buyers to determine important dates related to their home's closing

• Attend one of Tarion's seminars for new home buyers which take place regularly in Toronto and Ottawa

• Order a copy of a new brochure explaining the new policies that will be available from Tarion prior to the effective date of the new regulations

• Read the Homeowner Information Package which all builders in Ontario must provide to homeowners, as it will include an updated explanation of the new delayed closing home warranty