Tarion: Condo Warranties Come with Unique Coverage

By Tarion

Condominiums have quickly become a popular solution to the GTA’s growing urban population.   The condo lifestyle provides the convenience of living near where you work and relax, and can include impressive amenities like pools, fitness facilities, party rooms, picnic spaces and even theatres.  These recreation facilities are part of the common elements of the condominium and along with other shared elements like roofing, parking structures and exterior cladding, are covered under a common element warranty, which is separate from the warranty that covers your individual unit.  Let’s take a look at the type of warranty coverage that comes with your new condo.

Warranty coverage for unit owners

Your condo’s warranty is provided by the builder and backed by Tarion.  Deposit protection and delayed closing protection begin before you move in.  Deposits on condos are protected up to a maximum of $20,000 and deposits exceeding that are protected under the Condominium Act.

In addition to deposit coverage, condo buyers may be entitled to compensation for a delay in closing if proper notice has not been given.

When you take possession of your unit, your one, two and seven year warranties begin.  Together, they provide coverage for a wide range of issues, including unauthorized substitutions of items agreed to in the purchase agreement, defects to the electrical, heating and plumbing systems owned by your unit, issues with water penetration, violations of the Ontario Building Code and major structural defects.

Depending on the condo, electrical, heating and plumbing systems my be considered part of the common elements and not your individual unit.  Check your unit boundary document.  It should clearly outline what is unit owned and what is owned by the common elements.

Your builder is required to provide you with a Homeowner Information Package, explaining what is and isn’t covered in your individual unit, how to make a claim and when to involve Tarion.  As the owner, you are responsible for submitting warranty claims related to your unit on a timely basis.

The condo board’s role

Any warranty claims relating to the condominium’s common elements must be dealt with by your condo’s board of directors, but as a unit owner you should report any potential common element issues to the board in writing.

The board of directors is made up of a group of unit owners who are elected to run the condominium corporation on behalf of all unit owners.  The process for making common element warranty claims is usually more involved than claims related to a single unit, so it’s important that board members understand the process.

The board will identify a designate who will act as the representative if a warranty claim is made.  Many boards choose to have a property management company fulfill this role.

Managing the common elements warranty

Once the designate has been appointed, he or she should schedule a meeting with Tarion to discuss the common elements warranty.  This is a chance for Tarion representatives to ensure that the designate fully understands the process.  Just like the warranty on your individual unit, there are specific terms for the first and second year warranties and for the seven year major structural defect warranty.

The next step is for the condo board to arrange for a post-construction performance audit.  The audit will determine whether there are any major deficiencies in the common elements and report them to the builder and Tarion.

Once a claim is submitted, the builder has 18 months to complete the required repairs.  This is a much longer time-frame than the repair period given for individual unit claims, but takes into account the very time consuming nature of many common element repairs and the large scale of many of the shared elements.  Once this initial repair period ends, the condo corporation has 60 days to contact Tarion and request an inspection if any of the warranted items have not been resolved.

After the inspection, Tarion will issue a report listing any items that are covered under warranty and provide 90 days for the builder to complete any outstanding work.   If the repairs aren’t completed, Tarion will work directly with the condo corporation to settle the matter.

If you have questions about Tarion and the new home warranty program, visit tarion.com, call 1-877-9TARION and don’t forget to find us on Facebook.