BUILDER RELATIONSJim Fortune, Manager

Canadian Iranian Homebuilders Association

August 19, 2010

Ontario New Home Warranties Plan Act Definitions

As defined by The Ontario New Home Warranties Plan Act :

A ‘builder’ means a person who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home whether for the purpose of sale by the person or under a contract with a vendor or owner

Definition: Builder

As defined by The Ontario New Home Warranties Plan Act :

A ‘vendor’ means a person who sells on his, her or its own behalf, a home not previously occupied to an owner and includes a builder who constructs a home under a contract with the owner

Definition: Vendor

As defined by The Ontario New Home Warranties Plan Act :

A ‘home’ means,a) a self-contained one-family dwelling, detached or

attached to one or more others by common wall,

b) a building composed of more than one and not more than two self-contained, one

family dwellings under one ownership,c) a condominium dwelling unit, including

common elementsd) any other dwelling of a class prescribed by the

regulations as a home to which the Act applies

Definition: Home

What happens when a vendor/builder provides less than all the work and all the materials?

Question

Special Consideration - New Homes

Shell HomesA shell home is a home in which the builder completes the “shell” but does not finish the interior elements. For freehold and low-rise condominiums, the “shell” includes the essential elements (footings/foundation, exterior cladding, building envelope, heating, electrical and plumbing distribution systems) and installation of the drywall.  For high-rise condominiums, the “shell” includes the essential elements and installation of the drywall on the exterior walls only; the builder is not required to install drywall on the interior walls. Statutory warranty coverage applies to the work completed by the builder.

Special Consideration - New Homes

Homes Built on Existing FoundationsA foundation is defined as an arrangement of various “foundation units” through which the loads from a building are transferred to supporting soil or rock.  A “foundation unit” refers to any one of the structural parts of a permanent foundation, such as footings, foundation walls, block, piers and pier type foundations constructed of cement products such as concrete, concrete block, wood or any other approved material. 

Special Consideration - New Homes

A foundation does not include non-load bearing partition walls, weeping tiles, damp proofing, waterproofing, and parging or encompass load bearing structures that form part of the above ground construction such as columns, beams, posts and above ground load bearing walls. 

If part of the foundation of a home is pre-existing and that foundation does not exceed 40% of the footings as determined by linear measurement (footprint), the home will have statutory warranty coverage; otherwise, it will not.

Special Consideration - New Homes

If you build what we just talked about or sell what we just talked about then you must be registered with Tarion and enroll that unit.  You would be required to conduct a Pre-Delivery Inspection and supply your client with a Homeowner Information Package.

If your client in turn sells that unit without completing it and occupying it then they are considered to be a Vendor and must be registered. The Vendor would provide the warranty coverage. 

If your client completes that unit and sells it then they must also register as a Vendor and provide the warranty.

Project Management

You are considered a Project Manager if:

•You receive a flat fee for supervising the project;

• The owner selects the trades, enters into contracts with the trades and either pays the trades directly or arranges for you to pay the trades;

•The owner is routinely/regularly on site.

Project Management

If you enter into a contract with an owner under any other circumstances, contact Tarion for clarification as to whether you must be registered and the home enrolled.

Posting Security

•Freehold Homes-Security must be posted when each new home is enrolled. -If construction was started on a home before registering

with Tarion, additional security will be required. This security will be held for a minimum of 2 years from the date of

possession.

Note: Security must be submitted to Tarion by the vendor/builder and not the purchaser(s) listed on the APS or person(s) that enters into the construction contract with the vendor/builder.

Claims Process

Claims Process: Financial Loss

If a contract is not substantially performed, an owner can submit a claim for financial loss.

Tarion will determine the value of the home at the time of termination of the contract and compare that value to the amount already paid to the builder by the owner.

Homeowner can claim up to $40,000.00 for financial loss.

Claims Process: Breach of Warranty

Once a contract is substantially performed, a builder must complete a Pre-Delivery Inspection with the owner and submit a Certificate of Completion and Possession to Tarion.

An owner can then submit a list of deficiencies using the statutory warranty forms found in the Homeowner Information Package you are required to provide to the homeowner.

Warranty coverage provided is for a maximum of $300,000.00

Builder Relations Dept.:Builder Bulletin, CSS, Builder Clinics & Builder Portal

Inquiries: Ext. 3812 or e-mail: builderrelations@tarion.com

Licensing & Underwriting Dept.:Builder Registration/Renewals/Fees: Ext. 3001

Enrolments/CCP: Ext. 3170 Security: Ext. 3180or email: l&u@tarion.com

Technical Duty Desk: CPG/Technical Inquiries : Ext. 3290

1-877-696-6497 e-mail: info@tarion.com www.tarion.com

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