$25,000 Fine, Up To One Year In Jail Or Both For Flippers Under Ontario’s New Home Warranty Act.
Registration Rules For Tarion Warranty Amended On New Home “Flip.”
Any person who buys a new home from a builder but never occupies it before reselling is required to be registered with Tarion. Failure to do so can result in a fine, imprisonment or both.
Tarion which administers the Act has changed the registration requirements for purchasers who resell (“flip”) their homes without occupying them.Previously a detailed vendor/builder agreement was used but now Tarion has introduced a letter agreement that the sellers must provide to the ultimate purchaser. This contains a disclosure page with information such as:
A statement that the sale is effectively a resale.
The original warranty start date.
The status of the remaining warranty.
Contact information to enable the purchaser to check on the status of any claims made in respect of the home.
Tarion defines a resale or flip occurring when ” the purchaser of a new home does not personally occupy the home but instead sells it to another purchaser.” The reslae can happen on the same day as the original transaction with the builder OR several months later. Not surprisingly there is a $350 fee for the flipper when completing the necessary application form. A realtor can attach the application form to the Agreement of Purchase and Sale as a schedule.
More information can be obtained at www.tarion.com or by phone 416-229-3844 or 1-877-696-6497.