CONDOCENTRIC: New Home Warranties Plan

The Ontario New Home Warranties Plan ("ONHWP") Act (the "Act") and regulations there under, create both warranties with respect to the construction of new homes, and a regime to administer those warranties.

Under the Act, a condominium corporation is considered to be the owner of the common elements. This means that when it comes to enforcing the ONWHP warranties, the Board has the same responsibility for the common elements that any unit owner does for his or her home.

Therefore, property management, working with qualified engineers, should be prepared to identify construction deficiencies, catalogue and record them, and to see that warrantable items are addressed by the builder. This is an ongoing project that starts in one year.

There are many deadlines of which the Board and Property Management should be aware. Between the six and tenth month following the registration of the declaration and description, a condominium corporation must see that a performance audit is conducted.  No later than 11 months following the registration of the declaration and description, the person who conducts the performance audit must file the report with ONWHP. By so doing, the report constitutes notice to ONWHP of all deficiencies noted in the report.

If the construction deficiencies are not rectified by the builder, the Board and Property Management should be prepared to go to conciliation. Conciliation is a process whereby an ONWHP representative conducts an on-site inspection to determine if an item in question is warrantable. The Board and Property Management should be aware that the builder has a prescribed amount of time to rectify a deficiency, and then there is a specific time in which to start the conciliation process.

It is therefore important that the Board and property management be aware of what is covered and when, and what to do when a construction deficiency becomes apparent!

The warranties under the Act are as follows:

Within one year from the registration of the declaration the builder warrants that the common elements are:

• Constructed in a workmanlike manner and are free from defects in material;
• Fit for habitation;
• Constructed in accordance with the Ontario Building Code.

Within two years from the registration of the declaration the builder warrants that the common elements are free from:

• Water seepage through the basement or foundation walls, including all below-ground areas such as parking garages;
• Defects in materials and work including caulking, windows and doors, such that the building envelope of the home prevents water penetration;
• Defects in materials and work in the electrical, plumbing and heating delivery and distribution systems;
• Defects in materials and work which result in the detachment, displacement or physical deterioration of the exterior cladding;
• Violations of the Ontario Building Code's health and safety provisions.

Within seven years from the registration of the declaration the builder warrants that the common elements are free from any major structural defects. Major structural defects are defined in the regulations as any defect in work or materials:

• That results in failure of the load-bearing portion of any building or materially and adversely affects its load-bearing function; or
• That materially and adversely affects the use of such building for the purpose for which is was intended.

Property management and the Board would be wise to construct a timetable which is periodically updated to monitor progress on ONHWP matters in particular.

Which Warranty?

When and how can I submit a claim?

When should a Condominium Corporation proceed to conciliation?

First Year

First 30 days from the registration of the declaration and description using the 30-Day Form by submitting a copy to ONWHP and the Builder.

After a claim is submitted, the builder is given a certain time period prescribed by statute in which to remedy the problem. You should be aware of the time period, so that in the event the builder does not remedy the problem, you are prepared to request a conciliation from ONWHP.

Last 30 days of the first year following registration of the declaration and description, by using the Year-End Form and submitting a copy to ONWHP and the Builder or for common elements submission of the Performance Audit Report.

Second Year

Anytime during the second year by using the Second Form and submitting a copy to ONWHP and the Builder.

Seventh Year

For major structural defects found in the first or second years, by including major structural defects on the first and second year forms respectively, and submitting same to ONWHP and the Builder.

From the beginning of the third year to the end of the seventh year, by submitting an MSD Form to ONWHP.

From “Common Elements” Winter/Spring 2004

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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