Buying a home in OntarioJul 15th, 2015 | By admin | Category: Buying a House, Real Estate
Learn how Ontario’s consumer laws protect homebuyers. Get information on choosing a real estate agent, buying a newly-built home and hiring a home inspector.
Choosing a real estate agent or broker in Ontario
In Ontario, real estate salespersons or brokers must be registered with the Real Estate Council of Ontario (RECO). RECO administers the Real Estate and Business Brokers Act, which regulates real estate brokerages, brokers and salespersons.
A registered real estate professional:
- has deposit insurance. This insurance protects consumers from losing their deposit money if the brokerage or salesperson commits fraud or has financial trouble. In these cases, consumers may be covered up to $100,000 per claim. This insurance is administered by RECO
- has met educational standards set by RECO
- has to follow laws and a code of ethics. If you have a complaint about a broker or salesperson, RECO will investigate and take appropriate action
Before working with a real estate agent or broker:
- ask for references or recommendations
- confirm that they are registered by using RECO’s registrant search
- make sure you read and understand the contract you are signing with them
Choosing a builder in Ontario
In Ontario, all builders must be registered with Tarion Warranty Corporation. Tarion is responsible for enforcing the Ontario New Home Warranties Plan Act, which regulates new homebuilders. Tarion also administers a warranty program for newly-built homes.
Builders must also enroll a new home or condominium with Tarion before they begin construction. Tarion investigates illegal builders and vendors who are not registered and/or do not enroll new homes.
- have completed technical tests based on the Ontario Building Code
- meet financial qualifications set by Tarion
You should always research a builder before buying a newly built home. You can use Tarion’s Ontario Builder Directory to check:
- if a builder is registered with Tarion
- how many homes they have built and where these homes are
- if Tarion has had to resolve warranty claims for a builder in the past 10 years
If you buy a home from an unregistered builder, you are putting yourself and your investment at risk. Illegal builders:
- may not have enough technical knowledge to be registered
- may not meet Tarion’s financial qualifications
- are part of the underground economy
- can be subject to investigations and criminal charges
Contact Tarion if you have a complaint about a builder in Ontario
Tarion does not inspect homes to see if they meet Ontario’s Building Code. Your municipality is responsible for enforcing the Building Code in your area.
Warranty for a newly built home in Ontario
When you buy a newly built home or condo in Ontario, it comes with a warranty. You are entitled to this warranty by law.
Newly built homes have 1-year, 2-year and 7-year warranties. They cover:
- bad workmanship
- water penetration
- major structural defects
The warranty also covers delayed closing and deposit protection.
The warranty takes effect on the date of possession. It stays in effect even if the owner sells the house or condo unit before the end of the warranty period.
Coverage may vary depending on the type of home you buy. For example, homes built on existing footings or foundations are not covered.
The Ontario new home warranty program is administered by Tarion Warranty Corporation.
Tarion has a Homeowner Information Package with detailed information on the program. This package explains:
- what’s included and not included in the warranty
- how to make a warranty claim
- what happens after you make a claim and how to appeal a claim decision
- how to protect your new home warranty (e.g. attend your home’s pre-delivery inspection with your builder, keep track of warranty deadlines)
Learn how to appeal a Tarion claim decision.
Although the Ministry of Government and Consumer Services is not able to intervene in individual warranty cases, you may write the Minister of Government and Consumer Services if you have a complaint about Tarion. If you say that you would like the minister to share your complaint with Tarion, he or she may contact Tarion on your behalf and ask for a response.
Contact the Minister of Government and Consumer Services.
Getting a home inspection
A good home inspection help homebuyers make informed decisions. They can help you understand a home’s condition. If you are selling your home, an inspection can help you determine its value.
What is a home inspection?
A home inspection is an on-site, in-person examination of a home’s condition and structure. It is a visual inspection of major elements and systems, like the foundation, the electrical and plumbing systems, the attic ventilation and the roof. A home inspection is not a pass or fail test. It doesn’t assess if a home meets zoning or building codes.
A home inspector will typically examine the:
- doors and windows
- roof (if they are able and it is safe to do so)
- exterior walls
- plumbing and electrical systems (where visible)
- heating and air conditioning systems
- ceilings, walls and floors
- insulation (where visible)
- ventilation systems
- drainage away from buildings, slopes and natural vegetation
- overall assessment of structural integrity of the building(s)
- common areas in a condominium
Home inspectors complete a report of the property’s condition, as observed at the time of inspection. It will normally show:
- the condition of every major system and component of the home
- areas or parts of a home that are unsafe, need to be repaired or replaced, or may need to be repaired or replaced in the near future
- if something is not working properly, is unsafe, or needs to be changed
- any evidence of past problems
After getting the results of a home inspection, a buyer may decide to:
- ask the seller to make certain repairs
- accept a defect and deal with its consequences
- ask for a price adjustment
- not buy the home
Some sellers may have an inspection done before selling a home. Although seeing a current inspection report can be helpful, buyers should have their own home inspection done too.
It is important for a homebuyer to be present during an inspection. This gives them a chance to ask questions and see any issues first hand.
You should also keep in mind that:
- an inspector cannot see or find everything. For example, they may not find mould or may not be able to be able to inspect a roof that is covered with snow
- an inspector does not provide warranties or guarantees on a home’s condition
- inspectors are not required by law to have insurance coverage. However, many do have policies that can include general liability or errors and omissions coverage
- home inspection fees range from $350 to $600 and may be higher, depending on the size and condition of the home
Hiring a home inspector
Ask the right questions when hiring a home inspector
- May I see a copy of the inspection report you use?
- Do you have experience inspecting the type of home that I’m considering?
- Do you have insurance?
- May I see accreditation that shows what kind of training and experience you have?
- Can you provide references?
You will need to do some research to find a reliable, experienced and knowledgeable home inspector. Look for a home inspector who:
- provides written inspection reports
- will give you references
- has experience with the type of home you’re considering (e.g. condos, heritage era homes, cottages)
- has an accreditation that shows training and experience
- will provide a written contract
When hiring a home inspector make sure to:
- get quotes from more than 1 inspector
- check references
- ask about their training and experience
- ask to see a copy of the inspection report they use
- ask if they choose to have insurance
At this time, Ontario does not have mandatory requirements for home inspectors. However, there are many training programs and courses that inspectors can take to gain knowledge and understanding of home design, construction, operation, maintenance and common defects.
Protect yourself from mortgage fraud
To avoid unknowingly taking part in a mortgage fraud, be suspicious if you are:
- asked to say that you make more money than you really do
- asked to lie about whether you will live in a property or rent it out
- asked to sign documents that have blanks, or asked not to fill out certain sections of a form or document
- offered a fee for the use of your name and credit information
- discouraged from visiting the property, or having it appraised or inspected
If a registered real estate professional commits mortgage fraud, The Real Estate Council of Ontario (RECO) can take away their registration or prosecute them.