Changes to the Ontario New Home Warranty program commonly known as TARION are soon to come into affect that will affect buyers who purchase a new home then resell it without ever occupying the property themselves.
Under the revised regulation, buyers that resell (flip) a new home without occupying it themselves will now be required to be registered with TARION. Previously, registration meant completing a detailed vendor/builder agreement with TARION, paying a registration fee of $600, satisfying a financial review and finally, posting a $10,000 performance bond.
The registration process has now been simplified for buyers that purchase a new home or condominium with the intention of reselling it. A new "agreement" developed by TARION must be completed by the property's "reseller" owner and provided to the buyer(s). In this agreement the seller must disclose to the buyer(s) (a) that the property is a "resale," (b) the original warranty effective date, (c) the status of the remaining warranty coverage and (d) contact information that would allow a prospective buyer to check on any warranty claims that have been made with respect to the home or condo. A $350 fee now accompanies this revised and simplified agreement. Failure of an owner to register with TARION for the new home or condo then intend to resell carries a fine of up to $25,000, a sentence of up to one (1) year in jail
and or both.
REALTORS® representing a seller(s) in this type of resale scenario are equally responsible to ensure that these TARION requirements are met. Failure to act in accordance with the new TARION requirements and or to wrongly counsel their sellers could lead to charges against the REALTOR® for "Aiding and Abetting." These requirements have been put into place to ensure that buyers are fully conscious of the fact that there are buying a resale home and not a new home directly from a builder.
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