Selling a new home that you didn't occupy?

If you're one of those "investors" who buys a new home and then re-sells it without even having occupied it yourself, be aware that you're on the hook for some additional obligations related to the Tarion New Home Warranty Program.

A notice from the Toronto Real Estate Board to Realtors today says:

"Tarion also advises those who buy new housing units and re-sell without first occupying them are required to submit an Application for Registration as a ‘Vendor’ to Tarion Warranty Corporation, meeting specific terms and conditions.

They are responsible for the Deposit Protection, Delayed Closing and any material changes made after purchase from the builder. They are further required to provide Tarion with written confirmation that the builder will provide necessary warranty service or alternatively, specify how they will provide it.

In addition, Tarion points out that the warranty start date is the date of possession of the owner who occupies the unit. The new owner should be provided with the ‘Homeowner Information Package’ outlining the warranty coverage.


For more information visit www.tarion.com"

Note that they state that either the builder will provide the necessary warranty service or YOU will, which seems to imply that if the builder declines to provide warranty service in this kind of situation, then you're on the hook to do so.

This is just a reminder that when you're getting involved in real estate transactions, you're talking about big money and potentially big obligations. Make sure that the Realtor (and/or lawyer) representing your interests knows how to deal with, and cover you in these situations as best as possible. Not all Realtors know all of the intimate details equally well in every specific type of transaction. Interview your Realtor to make sure that you've got the best one representing your interests that particular situation.

And before you invest your hard-earned money in a specific area, whether it's stocks, bonds, real estate, mutual funds etc. do your own homework, too. The Internet (and Google) makes it a lot easier to learn how to protect yourself. There's a difference between "risk" and "reckless".