Where Every Big Bank Stands On Wednesday's Interest Rate Announcement

Home Warranty Program

Explore what a Home Warranty Program covers in Canadian real estate, who manages it, and how it protects new homebuyers from construction defects.

Home Warranty Program

May 22, 2025


What is a Home Warranty Program?

A Home Warranty Program is a form of insurance that protects new homebuyers from defects in workmanship, materials, and major structural components for a set period after purchase.

Why Home Warranty Programs Matter in Real Estate

In Canada, many provinces require builders to enroll new homes in a licensed home warranty program, especially for new construction or pre-construction properties. These programs provide peace of mind to buyers by covering specific defects or issues that arise after occupancy.

Coverage typically includes:
  • One year for labour and materials
  • Two years for systems like plumbing, heating, and electrical
  • Seven years for major structural defects

Programs vary by province. In Ontario, for example, Tarion administers the mandatory new home warranty program. In British Columbia, it's overseen by BC Housing. Coverage may also extend to delayed closings and deposit protection.

Understanding a home warranty program helps buyers know what is covered, what’s excluded, and how to file claims if issues emerge. Buyers should keep all documentation, inspection reports, and correspondence related to their home in case warranty service is needed.

Example of a Home Warranty Program?

After moving into a new townhouse in Toronto, a homeowner discovers plumbing leaks. The issue is covered under the two-year warranty, and the builder arranges repairs through Tarion.

Key Takeaways

  • Protects buyers from defects in new homes.
  • Mandatory in several provinces for new construction.
  • Offers 1–2 years for materials and systems, 7 years for structure.
  • Varies by jurisdiction (e.g., Tarion in Ontario).
  • Important to document issues and submit claims on time.

Related Terms

  • New Construction
  • Pre-Construction Condo
  • Builder Warranty
  • Deficiency Inspection
  • Tarion

Additional Terms

Draw Schedule

A draw schedule is a payment plan used in construction financing that outlines when and how funds will be released to the builder or contractor as. more

Above Guideline Increase (AGI)

An AGI, or above guideline increase, is a rent increase above the standard annual guideline that landlords can apply for in specific circumstances.. more

Encumbrance

An encumbrance is a legal claim, liability, or restriction on a property’s title that may affect its use, transfer, or value.. more

Eminent Domain

Eminent domain is the government’s legal right to expropriate private property for public use, with fair compensation to the owner.. more

Development Charges (DCs)

Development charges (DCs) are fees imposed by municipalities on new developments to help fund infrastructure and services required due to growth.. more

Deed Restriction

A deed restriction is a condition written into a property’s deed that limits or prescribes how the property can be used, binding future owners until. more

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