The purchase of any new home always entails some risk, although this might be a surprise to those new to the real estate market. Real estate is 75% perception, and what that means is that although your house may look like a real thing of beauty and a good bargain to boot from the outside, things might not always be as they seem and your new house may turn into a repair nightmare within a few years.

It is a simple, although nasty, fact of life that contractors are business people unto themselves. While most will deal fairly, there are some builders – more common than we would like to think – who cut corners in order to make more profit on the homes that they put up. Fortunately for citizens of Ontario, there are laws at several levels that seek to put the onus of responsibility on the builders in order to have them do the best possible job on building a home. The codification of these standards is known as the Ontario New Home Warranty Program, and it was introduced in 1976.

While the Ontario New Home Warranty Program has been in place for over three decades now, some builders were finding loopholes to get through (the mission statement of the program is to "protect consumers when builders fail to honour their warranty obligations"). As a result, the Ontario New Home Warranty Program was overhauled in 2003. The changes cover all homes built on and after this date.

Among other things, the changes include a mandatory inspection of the home that is for sale by the builder. This inspection takes place with the builder, the potential buyer, and a third party going through the home together. Not only do buyers get a chance to see how the systems in their new homes work but also to see if anything is missing within the structure that was supposed to be there.

Of course, the big issue over the warranty for many homeowners is just what the dollar amount is should a defect occur. In 2006, Tarion Warranty Corporation increased the coverage of houses under the Warranty Program, more accurately reflecting the cost of a new home in today’s Ontario. In fact, the corporation doubled the amount of money available as warranty coverage from $150,000 to $300,000, and this is applied to any new home in which the owner took possession on or after July 1, 2006.