A new home or condo is an investment in your future. But like any other major life decision, it also comes with risks. If you’re planning on taking the leap into home ownership in 2018, you can buy with added confidence thanks to some new consumer protection measures that come into force this year.
With new home prices and deposit requirements rising, these changes help bring the deposit protection levels more in line with today’s market. Changes affect new homes with a purchase agreement signed after January 1, 2018.
Under the Ontario New Home Warranties Plan Act, buyers of new (non-condominium) freehold homes are now eligible for increased deposit protection. If the purchase price of your home was $600,000 or less, you are eligible to receive up to $60,000 to reimburse you for amounts paid to the builder. If the purchase price of your home was more than $600,000, you are eligible to receive up to 10 per cent of the purchase price, to a maximum of $100,000. Previously, the maximum coverage was $40,000.
If you’ve decided to splurge on some upgrades, the payments for these extras are now protected as part of deposit coverage, thanks to the Strengthening Protection for Ontario Consumers Act, 2017.
Deposit coverage for condos has not changed since the law requires that the full deposit be held in trust. If for some reason these funds are released improperly from the trust, Tarion, the protection plan administrator, will cover up to $20,000.
Are you eyeing a condo in a converted warehouse or church? Another change means this home now has warranty coverage. Called “residential condominium conversion projects,” these developments turn existing buildings into condos that incorporate some of the building’s more interesting features — large windows, framing and brick walls — into the design. All the warranties included in the act apply to these condos with one exception — any pre-existing elements, such as an exposed brick interior wall, will not have the one-year warranty for defects in work and materials.
Under these new regulations, builders of residential condominium conversion projects and vendors who wish to sell units in these projects must also be registered with Tarion.