Planning for Vulnerable Persons: Protecting Loved Ones Through Trust and Estate Planning 

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At Rabideau Law, we’re proud to feature a special contribution from Blair L. Botsford, Principal at Botsford Law, as part of their Well-Squared Estate educational series. 

In this edition, Blair explores an important topic that touches many families: planning for vulnerable persons — including those with disabilities, illnesses, or circumstances requiring long-term financial care and protection. 

Who Is Considered a “Vulnerable Person”? 

Vulnerability can take many forms. It may include a loved one with a physical or mental disability, but it can also extend to those facing illness, addiction, financial instability, or age-related challenges. 

Proper estate planning ensures these individuals are protected through structured management of assets — even when they cannot make legal or financial decisions themselves. 

The Role of Henson Trusts and Disability Planning 

One of the most effective tools in disability planning is the Henson Trust — a fully discretionary trust designed to protect eligibility for Ontario Disability Support Program (ODSP) benefits and help to ensure long-term financial stability. 

Under a Henson Trust: 

  • The beneficiary does not have direct access to the trust’s assets and does not have a vested legal right to the income or capital of the trust. 
  • Trustees have full discretion over distributions, which balances  compliance with ODSP rules and the need to maintain flexibility to meet potentially changing needs of the beneficiary.
  • Remaining funds are distributed as specified by the  trust’s terms upon the beneficiary’s passing.  

These trusts, alongside Registered Disability Savings Plans (RDSPs) and Qualified Disability Trusts (QDTs), help families optimize financial security while preserving essential government benefits. 

“Optimizing the value of these options is an important part of disability planning, and fully discretionary trusts are the staple solution with respect to preserving ODSP benefits.” — Blair L. Botsford 

Capacity and Guardianship: Understanding the Legal Framework 

Planning for vulnerable persons also requires understanding capacity —  such as the legal ability to make decisions about property, care, or one’s estate. 

In Ontario, capacity is task-based, meaning the test for capacity differs depending on the decision. For example, the legal standard for making a Will is higher than that for granting a power of attorney, and both of these are different from capacity to manage property. It should be noted that legal capacity and mental capacity are related but different concepts. 

When a person no longer has capacity and there is no valid power of attorney, guardianship may be required. There are two forms: 

  • Guardianship of Property: Managing financial affairs. 
  • Guardianship of the Person: Overseeing personal care decisions. 

The Public Guardian and Trustee (PGT) acts as guardian of last resort, but family members can apply to take over this role under the Substitute Decisions Act. 

Planning for Minors 

Parents are not automatically the guardians of their children’s property in Ontario. They can only receive up to $35,000 on a child’s behalf from an estate or trust. For larger amounts, court involvement or a Guardianship of Property application is required. 

Establishing a trust for minors in a Will is often the better planning option — allowing funds to be managed responsibly until the child reaches an appropriate age. 

Why This Planning Matters 

Disability and estate planning aren’t just for families managing current challenges — they are essential steps for anyone who wishes to protect loved ones, preserve assets, and ensure peace of mind. 

With the right combination of trusts, Wills, powers of attorney, and guardianship planning, you can ensure your wishes are respected and your beneficiaries are supported with dignity and care. 

About the Contributor: Blair L. Botsford 

Blair Botsford is the founder of Botsford Law, a boutique firm specializing in trusts, estates, and private client services, with over 25 years of experience. 

She is a member of the Society of Trust and Estate Practitioners (STEP) and the Canadian Tax Foundation, among others. 

Learn more about Blair’s work and resources at: botsfordlawtep.com/resources 

Rabideau Law is pleased to share this educational piece from Botsford Law’s Well-Squared Estate Bulletin as part of our ongoing effort to inform clients about key legal issues that impact property ownership and personal planning. 

For more insights and resources, visit: 

www.rabideaulaw.ca | info@rabideaulaw.ca | 519-957-1001 

Credit Bids and CRA Landmines: Getting the Adjusted Cost Base Right

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When a secured lender “credit bids” and takes title to collateral through a CCAA vesting order, two tax questions matter immediately:

  1. What is the lender’s adjusted cost base (ACB) of the real property it now owns?
  2. How is the remaining unpaid debt (the deficiency) treated for tax purposes?

The short answer

  • ACB = the amount of the credit bid applied to extinguish the debt, not the full face amount of the mortgage. This flows from the creditor-seizure rules in ITA s. 79.1, which deem the creditor’s cost of seized property to equal the amount determined under s. 79.1(6), and is reflected in CRA technical interpretations on creditor seizures.
  • The balance of the mortgage not covered by the credit bid is not added to ACB. It is dealt with separately: lenders in a lending business generally use bad-debt deductions; non-lending investors generally use a s. 50(1) election to crystallize a capital loss (and sometimes an ABIL if the debtor is an SBC).

In the Balboa CCAA, for example, the court approved credit-bid vesting orders on multiple properties — the archetypal fact pattern for this tax treatment.

Why the ACB is the credit-bid amount (not the whole mortgage)

The creditor-seizure code in ITA s. 79.1

Section 79.1 governs what happens when a creditor seizes property “in respect of a debt.” It deems the creditor to dispose of the debt and to acquire the seized property with a deemed cost computed under s. 79.1(6). In plain terms, the creditor’s cost of the property is tied to the amount of debt applied in the seizure — i.e., the credit-bid consideration — not the entire outstanding mortgage.

CRA’s administrative view

CRA technical interpretations confirm this point: where a creditor seizes property in satisfaction of a debt, s. 79.1(6) deems the creditor’s cost of the property by formula, aligning with the amount of debt applied.

Does a CCAA vesting order count as a “seizure”?

Although a CCAA credit-bid + vesting order is court-supervised rather than a traditional foreclosure, tax commentators and CRA have long treated these transactions as economically equivalent to a creditor seizure, and the credit bid as the purchase price for ACB purposes.

Bottom line: When lenders take title via credit bid, use the credit-bid amount (plus acquisition costs like land transfer tax and legal fees) as ACB.

How lenders claim the “rest of the loss” (the unpaid deficiency)

Once title is acquired, any remaining mortgage balance is a separate asset (the deficiency claim) — it does not inflate ACB. Tax treatment depends on who the lender is and the nature of the debt.

1) Lenders in the ordinary business of lending

  • Bad-debt deduction – s. 20(1)(p)(ii): allows a write-off for the uncollectible portion of a loan held in the course of a lending business.
  • Doubtful-debt reserve – s. 20(1)(l): allows a reserve for doubtful accounts/loans, added back to income the following year under s. 12(1)(d).

2) Non-lending investors (debt on capital account)

  • Use the s. 50(1)(a) election to deem a disposition at nil when the debt becomes bad, generating a capital loss (or a business investment loss (ABIL) if the debtor is an SBC).

Does it matter if the lender is incorporated or not?

Yes — the ACB rule (credit bid only) applies equally, but the tax treatment of the deficiency differs depending on whether the lender is a corporation or an individual.

  • Corporate money-lenders: ordinary deductions under s. 20(1)(p)(ii) or reserves under s. 20(1)(l).
  • Corporate non-lenders: capital loss or ABIL.
  • Individual lenders in business: same as corporations in lending — ordinary deductions.
  • Individual investors: capital loss or ABIL through a s. 50(1) election.

Worked example

  • Mortgage face amount: $10,000,000
  • Credit bid at vesting: $7,500,000 → ACB = $7,500,000 (plus closing costs).
  • Balance ($2,500,000) remains as a deficiency claim.
    • Business lenders (corporate or individual): deductible as bad debt under 20(1)(p)(ii).
    • Non-business lenders (corporate or individual): crystallize loss under s. 50(1); may be an ABIL if borrower is an SBC.

When the lender later sells the property, the capital gain/loss is simply:
Sale Proceeds – ACB (credit bid) – selling costs.

How Rabideau Law Can Help

If you’ve acquired property through a credit bid in a CCAA or foreclosure process, the tax consequences can be as important as the court order itself. The rules in ITA s. 79.1, s. 20, and s. 50 can change your recovery depending on whether you are incorporated, acting as an investor, or operating as a professional lender.

At Rabideau Law, we:

  • Confirm the proper ACB for property acquired by credit bid.
  • Structure deficiency claims so you get the best possible tax treatment (ordinary deduction vs. capital loss vs. ABIL).
  • Work with your accountants to ensure reporting is audit-proof.
  • Guide you through property dispositions so your gain/loss is reported correctly and supported with documentation.

If you are a lender or investor dealing with distressed mortgages, Rabideau Law can help you turn a complex process into a clear and defensible tax outcome.

Contact us today to review your credit bid or deficiency claim and protect your position both legally and financially.

Director Resignation, Shareholder Deadlock, and Corporate Paralysis in Ontario: What You Need to Know

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Running a corporation in Ontario comes with important obligations under the Ontario Business Corporations Act (OBCA). While most business owners focus on sales, contracts, and operations, the governance structure — directors and officers — is what allows a company to legally function.

But what happens if a director resigns, leaving the corporation without leadership? And what if there are only two equal shareholders who cannot agree on appointing a replacement? This situation, known as shareholder deadlock, can create serious legal and practical consequences.

Director Resignation in Ontario

  • Under the OBCA, s. 121, a director may resign by giving a written notice of resignation to the corporation.
  • The resignation takes effect at the time specified in the notice, or when it is received by the corporation.
  • An email is legally sufficient to constitute a written resignation, provided it clearly communicates the director’s intent.

Once effective, the resignation must be recorded in the corporation’s minute book and reported to the Ontario Business Registry by filing a Form 1 – Notice of Change within 15 days.

Email Resignations Are Binding

Under Ontario law, a director’s resignation is valid if it is in writing and delivered to the corporation:

  • OBCA, s. 121(2) provides: “A resignation of a director becomes effective at the time a written resignation is received by the corporation or at the time specified in the resignation, whichever is later.”
  • There is no requirement for a “wet ink” signature — a clear email stating the intent to resign satisfies the “in writing” requirement.
  • The Ontario Evidence Act, ss. 34.1–34.7 confirms that electronic documents, including emails, are admissible and have the same legal effect as paper documents, provided authenticity can be established.

Once delivered, the resignation is final:

  • OBCA, s. 121(3) makes clear that a resignation is effective upon receipt. The Act does not provide any mechanism to revoke it unilaterally.
  • If a director later sends a second email attempting to withdraw the resignation, that communication has no legal effect. The only way the individual can return as a director is by being formally re-elected or reappointed under OBCA, s. 119(4).

Key takeaway: Once a resignation email is received, it is binding and cannot be undone simply by sending another email.

The Problem: No Director Appointed

Ontario law requires that a corporation have at least one director at all times (OBCA, s. 115(2)). If the last remaining director resigns and no new director is appointed, the corporation becomes headless:

  • No authority to act: Without directors, the company cannot legally enter into contracts, appoint officers, or make binding decisions.
  • Regulatory risk: Annual returns, filings, and tax obligations may be missed, leading to penalties or administrative dissolution.
  • Operational paralysis: Employees, banks, and counterparties may refuse to deal with a corporation that has no valid board in place.

Shareholder Deadlock: The 50/50 Stalemate

The situation is particularly problematic where there are two shareholders with equal ownership (50/50). In such cases:

  • Neither shareholder can unilaterally elect directors.
  • Any meeting to elect directors will result in a tie vote.
  • The corporation is stuck in a legal and practical deadlock.

This stalemate can quickly escalate into disputes over control, financial management, and whether the business can continue operating.

Legal Remedies

If shareholders cannot agree on how to move forward, Ontario law provides several remedies:

  1. Shareholder Meeting (OBCA s. 105(3))
    • Where there are no directors, any voting shareholder can call a meeting to elect new directors.
    • However, in a 50/50 ownership structure, this may not resolve the deadlock.
  2. Court-Appointed Directors (OBCA s. 117)
    • The Ontario Superior Court of Justice may appoint one or more directors to break the deadlock and allow the company to function.
  3. Oppression Remedy (OBCA s. 248)
    • If the deadlock unfairly prejudices or disregards the rights of one shareholder, they can apply to the court for relief.
    • Courts have broad powers, including ordering a buyout or imposing governance changes.
  4. Winding-Up / Dissolution (OBCA s. 207)
    • As a last resort, a court may order the corporation dissolved if it is “just and equitable,” which includes situations of total deadlock.

Practical Best Steps

To avoid ending up in a corporate stalemate, business owners should consider the following steps:

  • Implement a Shareholders’ Agreement: Include deadlock-breaking mechanisms such as a “shotgun” buy-sell clause, arbitration/mediation provisions, or granting a casting vote to an independent director.
  • Document Resignations Properly: Always acknowledge resignations in writing through a board resolution and file the necessary changes with the Ontario Business Registry.
  • Act Quickly: If a resignation leaves no directors in place, shareholders should immediately convene to elect replacements.
  • Seek Legal Advice Early: If shareholders are deadlocked, legal counsel can help explore negotiated solutions before resorting to costly litigation.

Conclusion

A director resignation may seem straightforward, but when coupled with a 50/50 shareholder deadlock and no replacement director, it can paralyze a corporation. Ontario law provides mechanisms to resolve these issues, but the best course is always prevention through planning.

At Rabideau Law, we help businesses draft strong shareholders’ agreements, manage corporate governance, and navigate disputes before they escalate. If your corporation is facing a director resignation or shareholder stalemate, contact us to discuss your options.

What Happens if a Mortgage Has No Maturity Date in Ontario?

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When reviewing a mortgage or charge registered on title in Ontario, one of the most important terms is the maturity date—the date on which the full principal becomes due. But what happens if the lender’s charge does not set out a maturity date? Can the lender still enforce the mortgage if the borrower defaults?

At Rabideau Law, we are often asked about this situation, particularly in the context of private mortgages where a maturity date may have been left blank, omitted by mistake, or intentionally left open. Here’s what Ontario law says.

The Legal Framework

Mortgages registered in Ontario are governed primarily by the Mortgages Act, R.S.O. 1990, c. M.40 and the Land Titles Act, R.S.O. 1990, c. L.5.

  • A mortgage with a stated maturity date clearly sets the point in time when the principal is repayable.
  • If no maturity date appears, Ontario law generally treats the mortgage as a demand mortgage.

A demand mortgage means the lender can call the loan due at any time by making a written demand for repayment.

This principle is confirmed by the Supreme Court of Canada in Royal Bank of Canada v. W. Got & Associates Electric Ltd., [1999] 3 S.C.R. 408, which held that demand loans are payable immediately once demand is made. Ontario courts apply the same reasoning to mortgages registered on title.

Default and Power of Sale

In Ontario, a lender can only exercise power of sale after a borrower is in default. For a mortgage with no maturity date:

  • Written Demand Required – The lender must first make a clear written demand for repayment of the entire outstanding balance.
  • 15-Day Waiting Period – Under s. 24 of the Mortgages Act, the borrower must be in default for at least 15 days before the lender can serve a Notice of Sale.
  • Notice of Sale – The lender then serves a Notice of Sale Under Mortgage (Form 1), giving:
    • 35 days’ notice if mailed to the borrower,
    • 40 days’ notice if mailed to subsequent encumbrancers or the sheriff.

Only after these statutory timeframes expire may the lender proceed to sell the property under power of sale.

Practical Impact

The absence of a maturity date does not make the mortgage unenforceable. Instead, it shifts the mortgage into the category of demand debt. The main practical difference is procedural:

  • The lender must take the extra step of issuing a demand letter before alleging default.
  • The borrower may sometimes argue “no default” until such demand is made.
  • To protect against disputes, lenders should serve a written demand in clear terms and keep evidence of service.

Key Takeaways

  • A charge with no maturity date is legally valid in Ontario and it is treated as a demand mortgage.
  • The lender must issue a written demand and allow the statutory 15-day default period before serving a Notice of Sale.
  • Purchasers or investors acquiring such mortgages should be aware that the enforcement timeline starts only once demand is made.

How Rabideau Law Can Help

ortgage enforcement is a technical process, and small oversights can create major delays. At Rabideau Law, our team regularly assists lenders, private investors, and borrowers with mortgage enforcement and power of sale proceedings across Ontario.

Whether you are a lender seeking to enforce your rights or a borrower defending against proceedings, we can provide the clarity and strategy you need.

Contact us today to schedule a consultation and discuss your mortgage enforcement options.

Can a Newly Married Spouse Still Claim Ontario’s First-Time Homebuyer Land Transfer Tax Rebate?

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It’s a common scenario: a newly married couple is purchasing their first home together. The wife has never owned a home, but the husband already owns a rental property. They wonder: Can she still claim the Ontario Land Transfer Tax (LTT) refund for first-time homebuyers if they put 99% of the home in her name?

The answer involves understanding how Ontario’s Land Transfer Tax rules define a ‘first-time homebuyer.’

How the Law Defines “First-Time Homebuyer”

Under the Ontario Land Transfer Tax Act, a person qualifies for the first-time homebuyer refund if:

  • They are at least 18 years old.
  • They have never owned a home or an interest in a home anywhere in the world.
  • Their spouse has not owned a home or an interest in a home anywhere in the world while being their spouse.
  • They intend to occupy the home as their principal residence within 9 months of closing.
  • They apply within 18 months of the transfer date.

Key Point: Once you’re married (or in a common-law relationship), your spouse’s property ownership history counts as yours for this purpose—even if you are not on title for that property.

What If the Husband Already Owns a Rental Property?

If the husband owned a property before the marriage, and he still owns it at the time of the new purchase:

  • The wife cannot claim the first-time homebuyer rebate, even if she is the sole purchaser or owns 99% of the property.
  • The Ministry of Finance considers the couple as one unit for eligibility purposes once they are legally spouses.

If, however: the husband sold his property before the marriage and the wife has never owned a home, she would remain eligible as a first-time homebuyer.

Can You Put 99% in the Wife’s Name?

No.
Allocating 99% (or even 100%) of the title to the first-time buyer does not bypass the rule:

  • The rebate is denied if either spouse has owned a home while they were married/common-law.
  • It is not based on title percentage—it is based on combined spousal ownership status.

Example

Scenario:

  • John owns a rental condo purchased before marrying Sarah.
  • After marriage, they buy a house together and put 99% in Sarah’s name.
  • Because John owned a property while married to Sarah, Sarah does not qualify for the first-time buyer rebate.

Why This Matters for Clients

  • Financial Planning: Couples sometimes count on this rebate to reduce closing costs—only to be surprised at closing when they don’t qualify.
  • Title Structuring: Even creative title allocations (99/1 splits) will not change eligibility if one spouse is ineligible.
  • Legal Advice: As their lawyer, you can ensure clients are properly advised before signing an Agreement of Purchase and Sale.

Takeaways for Buyers and Real Estate Professionals

  • Check both spouses’ ownership history before assuming eligibility.
  • Consider timing: If a spouse sells a property before the relationship becomes legal (marriage/common-law), the other spouse’s eligibility may remain intact.
  • Consult a lawyer early: Rabideau Law can review the specific facts and ensure clients know their true closing costs.

Have questions about Ontario’s Land Transfer Tax and first-time buyer rebates?
Contact Rabideau Law—our team can guide you through eligibility, structure your transaction properly, and ensure there are no costly surprises at closing.

When a loved one dies with Ontario real estate but probate was completed in the U.S.

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When a loved one passes away owning property in Ontario, but their Will is probated in a U.S. state such as Florida, you might assume that the U.S. probate documents will be enough to handle the sale or transfer of the Ontario property. Unfortunately, that’s not the case.

Ontario law requires a separate Ontario court grant before you can deal with Ontario real estate. Without it, the Ontario Land Titles Office and the buyer’s real estate lawyer will not accept your authority to sell the property.

In this post, we explain why U.S. probate isn’t enough, what Ontario requires, how this differs from “resealing,” what probate tax (Estate Administration Tax) you’ll pay, and how to avoid common mistakes—complete with a real-world example.

Resealing vs. Ancillary Probate in Ontario

Ontario recognizes two different paths for foreign probate grants:

1. Resealing

  • Used when the original grant is from another Canadian province/territory, the U.K., or another Commonwealth jurisdiction.
  • Ontario simply “reseals” the foreign grant so it is effective here—no need to repeat the probate process.

2. Ancillary Appointment (With Will)

  • Required for non-Commonwealth grants, such as those from U.S. courts.
  • Ontario issues a Certificate of Ancillary Appointment of Estate Trustee With a Will (Form 74.29).
  • The application relies on court-certified copies of the foreign probate grant and the Will, along with Ontario-specific requirements like probate tax and estate asset disclosure.

If you’re dealing with a U.S. probate, you’ll almost always need an Ancillary Appointment before taking any steps to sell or transfer Ontario property.

What You Must File in Ontario

To obtain an Ontario Certificate of Ancillary Appointment, you must file:

  • Application for Certificate of Ancillary Appointment (With Will) under Rule 74.
  • Court-certified copies of the U.S. grant and the Will.
  • Certified proof of death (e.g., death certificate).
  • Ontario estate value statement and payment of Estate Administration Tax (EAT).

Note on bonds: If the executor is non-resident, the court may require an administration bond unless you apply to have it dispensed with. This is best addressed early to avoid delays.

Ontario’s Estate Administration Tax (“Probate Tax”)

Ontario charges Estate Administration Tax (EAT) based on the value of Ontario assets:

  • $0 on the first $50,000 of estate value.
  • $15 per $1,000 (1.5%) on the value over $50,000.

When filing an ancillary application, EAT is calculated only on Ontario-based assets (you do not pay Ontario tax on non-Ontario assets).

Real-World Example: Florida Probate → Ontario Property

Scenario: Janet probated her mother’s Will in Florida. Her mother owned a cottage in Ontario. Janet asked whether the Florida grant could be used to sell the Ontario property.

Answer: Ontario does not accept U.S. probate orders. Janet must apply for an Ontario Certificate of Ancillary Appointment (With Will). She will need:

  1. Court-certified copies of the Florida grant and Will.
  2. Certified death certificate.
  3. Ontario property details (legal description, PIN, municipal address, and value for EAT).
  4. Bond considerations if she, as executor, is non-resident.

Outcome: With the Ontario ancillary certificate, Janet can confidently list and sell the Ontario property. The Land Titles Office and the purchaser’s real estate lawyer, as well as her real estate lawyer will recognize her authority to sell the property. 

Common Pitfalls (and How to Avoid Them)

  • Sending the original Will out of the U.S. court file: Ontario accepts court-certified copies—never risk losing the original.
  • Using the wrong process: U.S. grants require ancillary probate, not resealing.
  • Ignoring Ontario probate tax: Budget and pay EAT upfront to avoid delays.
  • Bond surprises: If you are a non-resident executor, identify the bond requirement early and, if appropriate, have your lawyer apply to dispense with it.

How Rabideau Law Can Help

At Rabideau Law, we regularly assist U.S. executors with Ontario estates. Our services include:

  • Strategic guidance on the right process (reseal vs. ancillary).
  • Preparation and filing of all Ontario court documents.
  • Bond relief applications to save you the cost and hassle of security.
  • Virtual real estate closings, so you can sell the property without ever travelling to Canada.
  • End-to-end management, from probate to closing, ensuring you meet Ontario’s legal requirements quickly and efficiently.

If you’re a U.S. executor facing Ontario property issues, contact Rabideau Law today—we make cross-border estate administration seamless.

Tarion Warranty coverage after you close

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This is an overview of warranty coverage after closing for Freehold, Contract and Condo Units 

A note for Common Elements coverage

For most condominiums, the common elements have the below warranty coverage.
The condominium corporation is entitled to submit warranty claims for defects in work or materials in the common elements. There is no warranty coverage for the common elements of either a common elements condominium or vacant land condominium. Common elements warranty coverage begins on the date the condominium corporation is registered.

One-Year Warranty

Now that the purchaser has taken possession of their newly constructed freehold home or condominium unit, they are eligible for year one warranty coverage. This coverage begins on the date of possession and lasts one year from that date and includes items such as defects in work and material and unauthorized substitutions. See below for what the year one warranty covers.

Coverage for Freehold, Contract & Condo Units

  • Requires a home is constructed in a workman-like manner and free from defects in material
  • Protects against Ontario Building Code violations
  • Applies for one year, beginning on the date of the home’s possession even if the home is sold.
  • Protects against unauthorized substitutions
  • Requires the home to be fit for habitation

Two-Year Warranty

The new home warranty continues to provide coverage into year two and include items such as water penetration, heating and electrical. This coverage begins on the home’s date of possession even if the home is sold. See below for what the year two warranty covers.

What is covered for Freehold, Contract & Condo Units

  • Protects against water penetration through the basement or foundation walls
  • Protects against defects in work and materials that results in water penetration into the building envelope
  • Covers defects in work or materials that result in the detachment, displacement or deterioration of exterior cladding (such as brickwork, aluminum or vinyl siding)
  • Covers defects in work or materials in the electrical, plumbing and heating delivery and distribution systems
  • Applies for two years, beginning on the home’s date of possession
  • Protects against violations of the Ontario Building Code that affect health and safety

Seven-Year Major Structural Defect Warranty

The seven-year warranty covers major structural defects (MSD) and begins on the date that the purchaser takes possession of the home and ends on the seventh anniversary of that date. 

 A major structural defect is a defect in work or materials that: 

  • results in failure of a structural load-bearing element of the building;
  • materially and adversely affects the ability of a structural load-bearing element of the building to carry, bear and resist applicable structural loads for the usual and ordinary service life of the element of the building; 
  • materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling.

What is covered

The seven year MSD warranty includes significant damage due to: 

  • Soil movement* & major cracks in basement walls
  • Chemical failure of materials & environmentally harmful substances or hazards. (i.e., Excessive radon levels)
  • Collapse or serious distortion of joints, or roof structure

What is not covered

The seven-year MSD Warranty specifically excludes the following:

  • Damage to drains or services
  • Dampness not arising from failure of a load-bearing portion of the building.
  • Damages to finishes

Source: https://www.tarion.com/builders-guide-coverage-homes