Protecting the buyer: Tarion, new builds, and construction delays
Newly built homes have all the appeal of the most up-to-date styles and features along with details you have a chance to choose yourself, like countertops, cupboards, and window coverings. Because they are making the biggest purchase of their life, home buyers deserve protection that ensures they receive what they pay for. For instance, a resale home buyer can schedule a home inspection to help identify structural problems with a house they don’t immediately see.
But how do you identify problems with a home that hasn’t yet been built? Who protects you if you buy a home that never actually gets built?
In the interests of protecting the buyers of new build homes, Tarion Warranty Corporation was created to provide warranties, create rules, regulate builders and mediate problems between buyers and builders. Now, however, it’s become clear that Tarion’s many (often conflicting) roles prevent it from protecting the interests of buyers. Many real estate lawyers feel that the current Tarion program is closer to the builders than the public, and a new, non-profit regulatory body will address issues like construction delays. A customer might buy a pre-construction home and then find their occupancy date pushed back months longer than they planned for, bringing additional costs if they are forced to find alternative accommodation until their home is complete. The maximum a buyer gets if a new-build project fails to go through is $20,000 for condos or $40,000 for houses--even if the required deposit was double those amounts. New regulations would ensure that the buyer receives back more of their deposit in the event a building project is cancelled.
What does this mean for you? Ideally, once a new regulatory body is established, if you fall in love with a model home pre-construction you will have additional protection in the event that the completion of your house is delayed and you can’t afford to wait.
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