Tag Archives: Ontario New Home Warranties Plan Act

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Common elements aren’t a common responsibility

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Common elements aren’t a common responsibility

Purchasing a condominium is a bit of a two-for-one deal. While you’re buying a unit that has specific physical boundaries, you’re also becoming part owner of amenities that could range from fitness facilities, rooftop terraces and party rooms to less glamourous elements such as heating systems, parking garages and elevators. These are the ‘common elements’ of your condo project. While you are entitled to use them (or at least benefit from them), management of the common elements – and their warranty – is the responsibility of the condominium corporation.

The warranty on your unit begins when your unit is ready for occupancy. The common elements warranty coverage doesn’t begin until the building is finished and the declaration and description for the project is registered by the developer at the local land registry office.

So, what are the declaration and description? They are documents that outline important details for condo owners, such as the boundaries, designated use and proportion of common expenses allocated to the unit, as well as repair and maintenance obligations. If you want to know exactly where your unit ends and the common elements begin, check the declaration.

Although common elements often provide a lot of marketing flash to help drive sales, they can be some of the last things finished in your project. If, for example, you’ve bought a condo on a lower floor in a highrise, you might be among the first to move in – before the common elements have been completed. This means that you might have to wait a while to use that chic party room or luxurious pool that helped sell you on the project in the first place.

Under the Ontario New Home Warranties Plan Act, the condominium corporation is the ‘owner’ of the common elements of the project. This includes “exclusive use” common elements – things such as your balcony or your backyard – that no one but you gets to use. Unlike unit owners who fill out and submit their own warranty forms for issues in their units, the Condominium Act requires that the condo corporation hire a consultant to prepare a performance audit identifying any deficiencies in the common elements, such as defects in workmanship or Ontario Building Code violations. The performance audit generally includes surveys in which unit owners can report issues they’ve observed in the common elements. The condo corporation will submit the performance audit to Tarion as a warranty claim for the common elements.

The condo corporation will also appoint a designate — often the condominium manager — to work with Tarion and the vendor to resolve deficiencies reported in the audit.

While you as a unit owner do not get involved in the warranty claims process for common elements, you do have a role to play in protecting these shared amenities and ensuring that the warranty coverage on them stays intact. Here are a few examples of what’s not covered by the warranty:

  • Damage caused by unit owners or visitors;
  • Alterations, deletions or additions made by a unit owner or the condo corporation;
  • Damage resulting from improper maintenance by unit owners or the condo corporation.

So if you’re inviting the high school rugby team over for a post-championship celebration, make sure the party room doesn’t become a casualty. Or if you’re planning to do work on any of your exclusive-use common elements – adding a garden to your balcony, for example – notify your condo corporation and obtain permission from them to undertake it.

Common elements are for the common benefit of all. If there are issues, be sure to report them to your condominium manager for them to report to Tarion within their warranty timelines. And if you have any questions about common elements coverage, contact Tarion at 1.877.9TARION or email customerservice@tarion.com.

Howard Bogach is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new home builders. tarion.com

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Do YOU know what Kind of Condo You’re Buying?

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Do YOU know what Kind of Condo You’re Buying?

Condominiums can come in all shapes and sizes. You could, for example, purchase a condominium townhouse, or perhaps a one bedroom unit in a highrise. They are both classified as “condominiums” because you own your unit while at the same time sharing access (and the associated fees) for facilities ranging from pools and parking garages to elevators and driveways (otherwise known as common elements). However, just because the townhouse and highrise unit are both condos does not necessarily mean that they are defined the same way when it comes to warranty coverage.

There are several types of condos but the most common are “standard condominiums” and “common elements condominiums.” The determination of how a condominium project will be designated happens during the planning stage when the builder proposes the project and the municipality approves it.

When it comes time to buy, you need to know how your condo is classified because it affects the warranty coverage under the Ontario New Home Warranties Plan Act. Standard condominiums have warranty coverage for units and common elements, but common elements condominiums only have unit coverage.

9th & Main Condos + Towns
Pemberton Group’s 9th & Main Condos + Towns in Stouffville.

So what would this mean to you as an owner? Let’s say you’ve bought a townhouse that is part of a complex that has underground parking. If there’s a problem in the parking garage – maybe leaks, drainage issues or a faulty door – the condo designation will determine whether there’s warranty coverage. If your unit is a standard condominium development, then the common elements warranty will apply. If it’s a common element condominium development, then repairs might have to be covered by the condo corporation’s insurance, which could impact your condo fees, or it could require a special assessment on all the owners.

How your condo is designated also matters when it comes to how Tarion can help. If a builder is not taking steps to resolve common element issues, we can only assist in situations where there is warranty coverage.

For the sake of both your peace of mind and your wallet, you should have a real estate lawyer review the Declaration and Description attached to your purchase agreement to be sure that you know the designation and boundaries of the unit you’re looking to purchase. And if you have questions about the types of condos and their coverage, our customer service team can help. Contact us at customerservice@tarion.com or call 1.877.9TARION.

Howard Bogach

HOWARD BOGACH is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new home builders. Tarion.com

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Consumer Protection: A Cancelled Project Doesn’t Leave You Out of Pocket

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Consumer Protection: A Cancelled Project Doesn’t Leave You Out of Pocket

If you check out Toronto’s skyline, you’ll see cranes – lots and lots of cranes. They’re a sign of the times in today’s condo construction boom. While the frenzied market we saw for detached homes in 2017 has calmed down a bit, the demand for condos has continued to grow as people see them as the only affordable option.

While there seems to be no shortage of willing condo buyers, however, there is a shortage of preconstruction condos available for sale. Unfortunately, this is due in part to development projects taking longer than expected to be built, or some being cancelled altogether.

There may be many different reasons why some developments don’t ever get constructed – for example, the builders might lack sufficient capital or fail to obtain the necessary zoning or permits. Whatever the cause, a cancelled project can leave purchasers without a home to look forward to. The good news is that it shouldn’t leave them out of pocket.

Under the Condominium Act, if a condo project is cancelled, purchasers are entitled to receive their entire deposit back, including any payments made for extras and upgrades. This is because the builders are required to put these monies in trust or provide alternative acceptable security. If a project is terminated and for some reason the deposits and other amounts are not repaid by the vendor then condo buyers are eligible for protection from Tarion up to $20,000, plus certain accrued interest.

If you’re buying a pre-construction condo, there is always a risk that the project could be delayed or cancelled. There have even been cases where purchase agreements are terminated and then the condos are constructed at a later date.

That’s why it’s important for potential buyers to know that under the Ontario New Home Warranties Plan Act, a builder must attach an Addendum to every condo purchase agreement that requires them to disclose the status of the zoning approval and construction. It also limits what kind of early termination conditions that they can impose in the purchase agreement and obligates them to use reasonable efforts to meet these conditions before they can cancel the project.

There are consumer protections in place to ensure that all reasonable steps are taken to complete a condo project, but it is important to understand your rights as a purchaser if it does not. If your purchase agreement is terminated through no fault of your own, you should get your money back within 10 days. If you don’t, Tarion is here to help.

HOWARD BOGACH is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new home builders. Tarion.com

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Consumer Protection: More Deposit Protection

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Consumer Protection: More Deposit Protection

Changes to act means down payment coverage has increased

When you buy a resale home, you can see what you’re getting before you sign an agreement and invest your money.

However, when purchasing a newly built home, your home may only exist as a floorplan when you put your deposit down. It’s then on your builder to bring your investment to life.

But if your home never makes it beyond the floorplan and your builder does not — or cannot — return your deposit, it’s good to know that your deposit is protected.

As of January 1, changes to regulations under the Ontario New Home Warranties Plan Act mean that new homebuyers of non-condominium freehold homes have more of their deposit money protected than ever before.

How does this work?

If you paid $600,000 for your home or less, you are eligible to receive up to $60,000 to reimburse you for amounts paid to the builder. If your home was more than $600,000, you are eligible to receive up to 10 per cent of the purchase price, to a maximum of $100,000.

In addition, the passage of the Strengthening Protection for Ontario Consumers Act, 2017, means that this deposit protection now includes other payments, such as those made for upgrades and extras.

While this enhanced coverage only applies to non-condominium freehold homes, it’s important to note that condo buyers are also protected by the Condominium Act, which requires that the full deposit be placed in trust. If, for some reason these funds are released improperly from the trust, Tarion will cover up to $20,000.

A new home is a big investment – one of the biggest of our lives. And while you can’t put a price on peace of mind, I’m pleased that we’re able to provide deposit protection that is more in line with today’s home prices.

If you’re looking to buy a new home this year, I encourage you to visit Tarion. com to learn more about Tarion’s new deposit coverage.

Howard Bogach is president and CEO of the Tarion Warranty Corporation. His column appears 10 times a year in HOMES Magazine. For more information about how Tarion helps new homebuyers, visit Tarion.com or find them on Facebook at Facebook.com/TarionWarrantyCorp

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Greater deposit protection coming for Ontario’s new homebuyers

Greater deposit protection coming for Ontario’s new homebuyers

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Greater deposit protection coming for Ontario’s new homebuyers

Buyers of new homes in Ontario will soon have greater deposit protection upon a new policy and regulation proposed by Tarion coming into force.

Based on extensive public feedback last spring, Tarion is proposing to increase deposit protection for non-condominium freehold homes from the current $40,000 to 10 per cent of purchase price to a maximum coverage of $100,000 and a minimum of $60,000.

The minimum threshold of $60,000 coverage ensures that all non-condominium freehold homes will have increased coverage under this proposal; this means that non-condominium freehold homes with a purchase price below $600,000 will have up to $60,000 in coverage.

The proposed changes are contained in a draft policy and regulation that Tarion posted today on Tarion.com for public comment. This proposal has also been posted on Ontario’s Regulatory Registry.

The new deposit protection coverage is expected to be in place in January 2018.

As well, if Bill 166, the Strengthening Protection for Ontario Consumers Act, 2017 is passed, then upon Royal Assent the current deposit protection under the Ontario New Home Warranties Plan Act (ONHWPA) would be extended to include other payments such as those made for upgrades and extras.

The proposed policy and draft regulation will be posted on Tarion’s website and on Ontario’s Regulatory Registry for 45 days. We encourage consumers and others to visit Tarion.com or Ontario’s Regulatory Registry to read the regulation and provide feedback.

Deposits with respect to condominium dwelling units are not part of the proposed changes because condominium dwelling units already enjoy significant protection: any deposit amounts are protected by the trust provisions of the Condominium Act, 1998 as well as by coverage under ONHWPA of up to $20,000.

Currently, deposits for new non-condominium freehold homes are protected under the ONHWPA up to a maximum of $40,000.

Deposit protection levels, under ONHWPA, for non-condominium freehold homes and condominium dwelling units were last changed in 2003 and the Ontario housing marketplace has changed dramatically since then with the escalation of new homes prices across the province.

In 2016, Tarion publicly committed to a review of deposit protection for Ontario’s new homebuyers. The Ministry of Government and Consumer Services also publicly stated its desire for Tarion to move forward with a review in this current marketplace.

tarion.com



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Great Gulf

Editor’s Choice: Great Gulf

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Editor’s Choice: Great Gulf

Going beyond the necessary to insure its purchasers

Great Gulf began in 1975 with a belief that we weren’t just building homes, but creating spaces. From breaking ground at our first lot, to becoming one of North America’s most respected home builders — we’ve come a long way. Great Gulf is now introducing a new standard to its homebuyers by purchasing insurance coverage on the full amount of their deposits.

Only the first $40,000 of a deposit on a freehold house purchase is currently covered by Tarion Warranty Corporation.(1) Recognizing that in today’s residential real estate market the average deposit usually exceeds this amount, Great Gulf has decided to purchase, at no cost to the homeowner, Westmount Guarantee Services Inc.’s Westmount Protect deposit insurance(2) on the balance of each new home deposit.

Peace of mind now comes standard when insuring your full deposit on a new Great Gulf home. A first in Ontario, Great Gulf and Westmount Guarantee Services are partnering to provide Westmount Protect deposit protection insurance with each new home purchase transaction. This program will be launching immediately with the new Westfield community location in Brampton.

“We’re always looking for new ideas and new innovations to provide our home buyers with the best possible options,” explains Christopher Wein, president of Great Gulf. “We pride ourselves in building homes to the highest possible standards of quality and design while ensuring that our purchasers have peace of mind when making a major investment commitment. We are delighted to offer this advantage to our customers so that they may benefit from the serenity of knowing their initial investment is protected.”

(1) Tarion Warranty Corporation administers deposit protection as provided under the Ontario New Home Warranties Plan Act.

(2) Westmount Protect deposit protection insurance is underwritten by Aviva Insurance Company of Canada.

GREAT GULF

Go online to learn about Westfield and other Great Gulf communities.

GreatGulf.com



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Tarion - Filipino

Tarion resources now available in Tagalog

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Tarion resources now available in Tagalog

Since 1976, it has been Tarion’s job to make sure the new home warranty program is there for all Ontarians and it is proud to announce that the Tarion Warranty Corporation is now offering information about the statutory new home warranty in Tagalog, thanks to partnerships with leaders in Toronto’s Filipino community.

The value of Tarion’s Tagalog initiative is twofold, notes Peaches Madarang, owner of Toronto’s Thinc10 Inc. “This service not only helps professionals educate and protect Filipino-Canadian consumers, it also personalizes and enriches the experience of buying a new home for consumers whose first language is Tagalog.”

Two publications – the warranty brochure and an educational video – are currently available on Tarion.com. This is the first new language to be launched in 2017 as part of Tarion’s growing collection of multilingual resources.

“We know that buying a new home can be complicated. There are many steps to complete before, during and after the new homebuying process,” said Siloni Waraich, vice president of stakeholder engagement. “Tarion hopes that providing materials in multiple languages will help make the process easier for all new homebuyers. We look forward to continuing to expand our multilingual resources to better educate, protect, and reach even more consumers across Ontario.”

Tarion engages in regular outreach to communities across the province to ensure that new homeowners are properly educated on its warranty process. Tarion is partnering with the Filipino Canadian Real Estate Association (FILCREA) to launch these educational materials and make them widely available to Ontario’s Tagalog-speaking community.

“Our community’s realtors and groups like FILCREA know how important it is to ensure all new homebuyers understand what their rights and responsibilities are,” said realtor Monica Vera of Century 21 Atria Realty and member of the Toronto Real Estate Board (TREB). “The information provided by Tarion helps outline exactly what new homebuyers can expect. This is another way we continue to serve all our clients with integrity and professionalism.”

Tarion has already released homeowner resources in Punjabi, Mandarin, French and Farsi and will soon be publishing more resources in additional languages.

For the past 40 years, Tarion has been enhancing confidence in the new home buying experience. Tarion is a private, not-for-profit corporation that administers the Ontario New Home Warranties Plan Act, and backstops the warranty coverage. We set the standards for builder licensing and after sales service and step in when your builder cannot or will not fulfill their warranty obligations. Since 1976, Ontario’s new home warranty program has registered close to two million homes and paid out hundreds of millions of dollars in warranty claims. Our mandate is to serve the public interest, and is what guides us every day.

tarion.com

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TARION

Brampton, Tarion join forces

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Brampton, Tarion join forces

The City of Brampton, Ontario’s fourth largest municipality, joins 14 other Ontario municipalities as the newest participant in a pilot project to help protect new homebuyers from new home construction not covered under warranty. Applicants for a new home building permit in the city must now present either their Tarion Warranty Corporation registration number or a letter of confirmation to obtain a permit through Brampton Building Services.

This pilot initiative supports the Ontario Government’s 2014 Budget commitment to fight the underground economy, including the practice of illegal building. The pilot was launched in 2015 as a partnership between Tarion, the Ontario Building Officials Association (OBOA) and the Ontario Home Builders’ Association (OHBA).

“We are happy to be partnering with Tarion on this important protection initiative for new homebuyers in the City of Brampton,” said Brampton Mayor Linda Jeffrey. “This builds on our great working relationship with Tarion after we partnered with them last year to launch their resources in Punjabi, allowing them to reach more homeowners in Brampton in their native language. We look forward to working with them again in 2017.”

“Illegally built homes can result in financial loss and heartache for unsuspecting buyers that are taken advantage of,” said Brampton’s chief building official, Rick Conard. “This new strategy gives us additional tools to enforce obligations for warranty coverage prior to issuance of a permit.”

“Registered homebuilders in Ontario are excited to work with Tarion and municipalities such as Brampton to enhance warranty protection,” said Joe Vaccaro, CEO of the OHBA. “This pilot helps educate new homebuyers of their warranty rights and the importance of working with a registered builder.”

“We are so excited to have Brampton, Canada’s second fastest growing community, join our pilot program. As a city that has so much to offer families and newcomers, it is important to ensure that they have the confidence in the largest purchase they will make in their lives – a new home,” said Siloni Waraich, vice president of stakeholder engagement at Tarion.

In Ontario, anyone acting as a vendor/builder of a new home must be registered with Tarion to automatically place the home under warranty. Homeowners who wish to be exempted from the Ontario New Home Warranties Plan Act must apply for a letter of confirmation from Tarion.

Tarion administers and enforces the Ontario New Home Warranties Plan Act and Regulations. Warranties include protection for deposits, protection against financial loss for contract homes, compensation for delays in closing or occupancy, protection against unauthorized substitutions, one- and two-year warranties for certain defects in work and materials, and a seven-year warranty for major structural defects.

More information is available online at www.tarion.com

About Tarion:

The Ontario Ministry of Government and Consumer Services has empowered Tarion to administer and enforce the Ontario New Home Warranties Plan Act and Regulations. Warranties include: protection for deposits, protection against financial loss for contract homes, compensation for delays in closing or occupancy, protection against unauthorized substitutions, one and two year warranties for certain defects in work and materials, and a seven year warranty for major structural defects.

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