Changes to Tarion Addenda

Effective July of this year, Tarion has made significant changes to the disclosure and documentation obligations that are appurtenant to the Ontario New Home Warranty governing newly-constructed homes. In particular, Tarion has introduced several new prescribed forms of the Addenda which must be appended to every Agreement of Purchase of Sale governing a newly-built home, whether freehold or condominium (there is also a brand-new form to cover freehold parcels of land that are tied to common elements corporations (POTLs)). Among other things, the changes are aimed at providing greater flexibility for buyers and builders to mutually change the critical dates, and also require builders to provide enhanced disclosure in connection with adjustments.

As background, it should be noted that these new Addenda are part of the latest of three separate Tarion “regimes” which may apply, depending on the date of the Agreement. In particular – and although the basics of each regime are the same – slightly different Forms and provisions apply depending on when the Agreement of Purchase and Sale was entered into, specifically:

Adjustments and Disclosure Obligations

One of the more important changes each of these new Addenda brings is that they require builders to expressly itemize the categories of additional charges, fees, or anticipated adjustments to the final purchase price or balance due on closing, and to quantify those adjustments as stipulated in the terms of the purchase agreement. The itemized list and dollar amounts (where calculable) must be contained in a Schedule B to the Delayed Closing Addenda, which is appended to the Agreement of Purchase and Sale itself; if they are not included in the Schedule, then the builder is not entitled to charge for them.

Also under the new Addenda, under the heading “Information Regarding the Property”, builders are now obliged to provide certain information in writing to buyers, relating to specific topics such as the status of development approvals, the status of construction and the extension of critical dates in some circumstances.