Did you say delay compensation?

Tarion Blog Delay CompensationThat’s right. On top of deposit protection, coverage for defects in the structure, workmanship, and materials, Ontario’s new home warranty offers up to $7,500 in compensation if your builder doesn’t meet certain deadlines in your purchase agreement. In fact, Ontario is the only province that includes delay compensation in its warranty.

There may be many reasons why a home is delayed. Naturally, the most important one is ensuring that your home is built properly.

 

Shouldn’t builders just stick to their dates?

Building a home takes a lot of different people, trades, and materials, and skilled coordination from start to finish to help ensure that construction runs smoothly and on time. In a perfect world, every new home would be delivered on time and in pristine condition, top to bottom. But life is not perfect and building is not an exact science. There may be many reasons why a home is delayed. Naturally, the most important one is ensuring that your home is built properly. So when it takes more time than your builder originally estimated, your new home warranty provides some limited compensation for the inconvenience.

Construction delays

The building process is heavily dependent on a number of different independent factors, such tradespeople, deliveries, product orders, etc. all operating on their own schedules. If one aspect of the building process gets delayed—say for example, a certain product doesn’t come in when it was supposed to, so now the electrical and HVAC work can’t move forward—it can set off an entire chain of delays within the building process, causing your closing date to be pushed later.

Sometimes these delays could have been avoided had the builder taken certain steps to prevent it and was given enough notice to do something about it. When that’s the case, your new home warranty can provide you with up to $150 a day to a maximum of $7,500 in delay compensation.

But there are other times when delays are unavoidable.

Avoidable or unavoidable? That is the question 

Determining if the delay was avoidable or not is the deciding factor as to whether delay compensation is warranted. In other words, if the cause of the delay was beyond your builder’s control, then delay compensation wouldn’t necessarily kick in.

How will I know?

There are a few instances when a delay can be considered ‘unavoidable’ and therefore delay compensation isn’t justified. These include (but are not limited to):

  • Strikes (including municipal services, trades, and sub trades)
  • Fires
  • Explosions
  • Civil insurrection
  • Acts of war or terrorism
  • Pandemics

‘Unavoidable’ rules for builders 

Even if a construction delay affecting the delivery date of your home is considered unavoidable, your builder must still follow a certain set of protocols outlined by Tarion, which backs your builder’s warranty protection.

For example, your builder must inform you of a delay within a specific timeframe, give you an estimate as to how long the delay might last, and provide you with written notice when the delay is over – again, within a set timeframe.

When in doubt contact Tarion

If the delivery date on your new home has been delayed, but you’re not sure if you are entitled to delay compensation, you can contact Tarion to know more.

Lessons Learned:

  1. New home warranty includes delay compensation of up to $7,500.
  2. Delay compensation depends on whether or not the delay was unavoidable and whether the builder gave timely notice.
  3. Certain kinds of unavoidable delays affecting the delivery date of a new home are not covered.

 

Source: http://blog.tarion.com/say-delay-compensation/

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Randy Ramadhin

Randy Ramadhin

Broker
CENTURY 21 People's Choice Realty Inc., Brokerage*
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