Builder Delayed Your New Home Closing in Ontario? Tarion Compensation

You planned your move around a closing date, and then your builder pushed it back. You may be paying rent, storing furniture or staying with family longer than you expected. It is natural to ask who covers those costs.

In Ontario, Tarion offers compensation for certain delays on new freehold homes and contract homes. This article explains what is covered, when it is not, and how it relates to the warranties that begin once you take possession. Your own agreement and the facts of the delay matter, so a lawyer can confirm how this applies to you.

What delay compensation covers

Tarion delayed closing and occupancy compensation is capped at $7,500 in total. That cap is the most you can receive, however long the delay lasts.

The compensation is made up of two kinds of payment:

• Living expenses of $150 per day, with no receipts needed for those.
• Receipted costs, such as moving and storage.

Because the living-expense amount needs no receipts, you do not have to prove what you actually spent on temporary housing or meals to claim it. Keep receipts for moving and storage, since those are paid on the basis of receipted costs.

When the builder gives short notice

If the builder gives you less than 10 days' notice of a delay, you get $1,500.

For this reason, the date you were told about the delay matters. Keep every email, letter and notice from the builder, and note the date each one arrived.

When compensation is not payable

Delay compensation is not payable when the delay comes from a mutual written agreement or from an unavoidable delay. An unavoidable delay means extraordinary circumstances that are no fault of the builder or the purchaser.

Be careful before you sign any document that extends your closing date. If it amounts to a mutual written agreement to the delay, it may take away your compensation. Ask a lawyer to review it first if you are unsure.

How it fits with warranties and claim forms

Delay compensation deals with the period before you take possession. The Tarion warranties begin once you do. The one-year warranty starts on the date of possession, or the occupancy date for a condominium. The two-year warranty covers items such as water penetration and heating and electrical systems. The seven-year warranty covers major structural defects and runs to the seventh anniversary of possession.

Warranty claims follow their own timelines, which are separate from a delay claim:

• The Initial Form can be started 1 day after possession and is automatically submitted on day 41.
• The Year-End Form opens on day 183 and is automatically submitted on day 365, with a 10-day grace period if you have written proof you reported the items to your builder.
• The Second-Year Form can be filed any time in year two.
• The Major Structural Defect Form is filed after year two but no later than seven years from possession.

What to do next

• Save every notice, email and letter from the builder about the delay, with dates.
• Do not sign a closing date extension or amendment until you understand what it says about delay compensation.
• Keep receipts for moving and storage costs.
• Track the dates of any delay and when you first heard about it.
• Ask a lawyer to review your agreement of purchase and sale and any delay notices if the builder disputes your claim.

Once you take possession, diarize the warranty claim form dates so you do not miss a window.

Frequently asked questions