Search
  1. Home
  2. Mortgages
  3. What Does a New Home Warranty Cover?
Published September 16, 2021
Updated September 16, 2021

What Does a New Home Warranty Cover?

Make sure you understand what your warranty covers, how long it lasts, who is providing it, and how to make a claim.

Whenever consumers buy a product, they expect a warranty to protect them from any manufacturer defects. What you may be surprised to learn is that it’s no different when you buy a pre-construction home. A new home warranty is typically included, but what coverage you get and who provides it varies depending on where you live.

What is a new home warranty?

What your warranty covers will depend on the provider. Generally speaking, you’ll be covered for things such as:

  • Deposit insurance
  • Defects in material (electrical, plumbing, heating, brickwork, siding, etc.)
  • Unauthorized substitutions
  • Building code violations
  • Water penetration through the basement or foundation walls
  • Major structural defects
  • Common elements

The length of your warranty will depend on what needs to be repaired and who your provider is. For example, in Ontario, Tarion is the provider and its warranty covers major structural damages for seven years but building code violations for only two years. There are also maximum coverage limits for freehold homes, condominium units and common elements.

In most cases, the warranty starts when you take possession of your home. However, the warranty for common elements in a condo begins when the condominium corporation is registered.

» EXPLORE: Different types of houses in Canada

How to get a new home warranty

A new home warranty is mandatory in Quebec, Ontario, Alberta, and British Columbia. Throughout the rest of the country, warranties are left up to the individual builders. That said, if the builder is part of a professional association, they may be required to offer a warranty.

The warranty should be clearly outlined in your purchase agreement. If you’re not sure, ask your realtor or the sales representative to go over things with you. What warranty you fall under would depend on where you live.

New home warranty in Atlantic Canada

Residents of Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island who purchase a new home are covered by the Atlantic Home Warranty. This is an optional third-party warranty provider, but many of the top home builders in the region offer it.

New home warranty in Quebec

The Guarantee Plan for New Residential Buildings is available to residents of Quebec who are purchasing new homes. Homes covered include detached, semi-detached, prefabricated and more. You’re entitled to up to $300,000 in total coverage if you need to make a claim.

New home warranty in Ontario

The Tarion Warranty Corporation provides insurance for freehold homes and condominiums in Ontario. Freehold homes are covered up to $300,000. Condominium common elements warranty is currently valued at $100,000 times the number of units, up to $3,500,000.

New home warranty in the Prairies

Saskatchewan and Manitoba have optional new build warranties provided by the Saskatchewan New Home Warranty Program and New Home Warranty Program of Manitoba. Over in Alberta, the Alberta New Home Warranty Program is mandatory.

New home warranty in British Columbia

The British Columbia Homeowner Protection Act and regulations require residential builders to provide third-party home warranty insurance. Minimum coverage would include:

  • two years on labour and materials
  • five years on the building envelope
  • 10 years for the structure.

Making a new home warranty claim

Hopefully, you never need to make a warranty claim, but if you do, here’s what to expect:

  • Submit a claim form and any relevant supporting documents directly to the warranty provider.
  • Your builder will have a period to get the repairs done.
  • If the issues are not resolved, you can request a conciliation.
  • If the problem is still not resolved, your warranty provider will take care of it directly.

The claim process may differ slightly for each warranty provider. You can find detailed instructions on how to make a claim on their websites.

About the Author

Barry Choi
Barry Choi

Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel. You can reach him on Twitter: @barrychoi.

DIVE EVEN DEEPER

What Is the Minimum Credit Score for a Mortgage in Canada?

In 2021, the minimum credit score required for a mortgage through a big lender is 650. But if your score is lower, you can use other options.

How to Buy a New-Build or Pre-Construction House

Thinking of buying a new home? Here’s what you should know before buying a new build or pre-construction directly from the builder in Canada.

Should You Rent or Buy?

Buying a home means control and the ability to build equity. Renting is flexible and might be cheaper. What's better depends on your goals.

What is Mortgage Insurance?

Mortgage insurance, like CMHC Mortgage Default Insurance, is required when a down payment is less than 20%. Premiums vary from 0.60% - 4.50%.