Do you know what’s covered in a new home warranty?

Almost every new home or condo in Ontario is covered by a mandatory new home warranty program. This coverage is provided by the builder and is administered by Tarion, a consumer-protection organization.

While the builder provides the warranty, its cost is often passed on to the new home buyer. But this one-time fee, ranging from $385 to $1,500, depending on the value of the home, gives you significant value for your money. You'll receive as much as seven years of warranty protection to a maximum of $300,000 per home or condo unit.

The warranty program has milestones to address specific issues that can arise after you have moved in to your new home. Here is a simple breakdown of the main coverages:

One-year warranty. This warranty applies for one full year beginning when you first take possession, and even if the home is sold during this time. It requires that your home has been constructed in a workman-like manner and is free from any defects in materials used. It also requires that your home is free of Ontario Building Code violations and is fit for habitation. In addition, the warranty protects against unauthorized substitutions.

Two-year warranty. This warranty begins on the date you take possession of your home, or occupancy of your condo unit. It provides protection against water penetration through the basement or foundation walls, or through windows, doors and caulking because of defects in materials or workmanship.

The warranty also covers defects in materials or workmanship in the electrical, plumbing and heating systems in your home, as well as defects in work or materials that cause detachment, displacement or deterioration of the exterior cladding, such as brickwork or siding. Finally, the twoyear warranty protects against violations of the Ontario Building Code that affect the health and safety of homeowners.

Seven-year warranty. This warranty covers major structural defects and begins on the date you take possession of the home and ends on the day before the seventh anniversary of that date. It protects against defects in materials and workmanship that adversely affect a load-bearing part of your home's structure, causing it to fail or significantly affect your ability to use the house as your home.

In most condominium projects, warranty coverage also includes the shared areas of the building, referred to as Common Elements. This coverage is addressed by the condominium corporation and provides up to $50,000 of protection per condo unit to a maximum of $2.5 million.