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



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

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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