Apr 2023
Tarion Warranty: The Builder’s Obligation to Conduct Emergency Repairs After the Possession Date
By Slonee Malhotra
The Ontario New Homes Warranties Plan Act provides that certain elements of a new home are protected by a Tarion Warranty policy for a period of one to seven years (different defects have different coverage terms). This warranty covers things like defects in materials, inhabitability, Ontario Building Code violations, major structural defects, and more.
Many purchasers are familiar with the Pre Delivery Inspection process and a builder’s obligation to remedy deficiencies through the 30-Day Form, Year-End Form, etc. Less commonly discussed is a builder’s obligation to react during an emergency repair situation.
Warranty for Emergency Situations
Tarion defines an emergency as “a situation that occurs during the warranty period and involves a warranted defect that, if not immediately taken care of, would result in substantial damage to the home, pose a risk to the health and safety of the homeowners, or make the home uninhabitable.”[1]
Some of the most common examples of emergency situations are: a loss of heat in the winter months, a gas leak, loss of electricity or water, and water penetration/ flooding/ pooling. However, these emergency situations must be within the builder’s control in order to qualify under the warranty. This means that a municipal or utility service failure, for example, would not be covered.
What to do in an Emergency
- If there is an emergency situation, the property owner must first contact the builder using any emergency contact information the builder provided within the Homeowner Information Package.
Under the warranty program, builders have 24 hours to resolve the emergency situation. Resolving the emergency does not mean that the issue is to be fully remedied within the 24 hours. It simply means that the builder must respond to the claim, neutralize the situation and styme the damage. The actual repair can up to 30 days following the report to the builder.
- If the builder cannot be reached, the property owner can reach out to Tarion for further direction.
If Tarion determines that the issue is an emergency, Tarion will attempt to contact the builder. If the builder remains unreachable, Tarion will instruct the property owner to make the repairs to prevent further damage.
- If Tarion cannot be reached, the property owner can have the repair work completed to correct the emergency.
Property owners are warned that this applies to correcting the emergency only. Property owners are not permitted to complete further repairs without jeopardizing their warranty rights. For reimbursement of repair costs, the property owner must fill out an Emergency Form through Tarion. The builder has 30 days to reimburse the home owner, failing which the home owner can arrange for a conciliation.
Are Property Owners Entitled to Relocation Compensation?
There is no requirement for builders to pay relocation costs in the event that a home owner must leave the property to facilitate a warranted repair. However, Tarion may determine a home is uninhabitable if an essential part cannot be used and in such case, the property owner may be eligible to receive an allowance of up to $150/day for the duration of the repair. A home would be determined as “uninhabitable” if the kitchen is unusable, all toilets and/or all showers are unusable, a staircase is unsafe or if the structural integrity of the home is under question. In the event that a portion of one bathroom is unusable however a second is functional, there would be no relocation cost entitlement.
If you have any questions about your Tarion Warranty enrollment, your new construction build, or this emergency relocation compensation, contact one of our qualified condominium development or real estate lawyers today!
[1] https://www.tarion.com/media/how-your-home-warranty-protects-you-emergencies