{"id":902,"slug":"tarion-msd-three-test-failure-function-use","title":"Major Structural Defect (MSD) — three-test framework (failure / function / use) defines what qualifies for year 3-7 coverage","kind":"reference","scope":"business","status":"current","audiences":["kevin","smb-owner","candid-team"],"topics":["regulatory-compliance","gc-vertical","tarion-warranty"],"reference_body":"**Claim:** A Major Structural Defect (MSD) under Tarion's 7-year warranty is any defect in work or materials that meets **any one** of three tests:\n\n1. **Failure test** — results in failure of a structural load-bearing element of the building.\n2. **Function test** — materially and adversely affects the ability of a structural load-bearing element to carry, bear and resist applicable loads for its usual service life.\n3. **Use test** — materially and adversely affects the use of a significant portion of the building for usual residential purposes.\n\n**Source:** Tarion Registrar Bulletin 03 (Major Structural Defects); Builder Bulletin 24R supplements.\n\n**Confidence:** Verified.\n\n**Examples that qualify:** significant damage from soil movement, major basement-wall cracks compromising the structure, collapse or serious distortion of joists or roof structure, chemical failure of materials (e.g., excessive radon ingress affecting habitability).\n\n**Examples explicitly excluded from MSD:** cosmetic dampness, damage to drains, damage to finishes, condensation issues not tied to a structural failure.\n\n**Coverage cap context:** A post-July 2023 freehold home has up to $400K total post-possession coverage (the same pool covers MSD and earlier-year claims combined). The $50K environmentally-harmful-substances sub-limit (radon, mould) applies for APS on/after Feb 1, 2021. See [[tarion-coverage-caps-post-july-2023-400k-300k]].","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"tarion-coverage-caps-post-july-2023-400k-300k","title":"Tarion coverage caps: APS on/after July 1, 2023 — $400K freehold / $300K condo unit / $100K × units common elements to $3.5M cap; $50M project cap","kind":"reference","scope":"business","link_type":"relates-to"}],"incoming":[{"slug":"research-brief-tarion-ontario-may-2026","title":"Research brief: Tarion Warranty Corporation — definitive reference (May 2026)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"tarion-1-2-7-warranty-detailed-coverage-by-year","title":"Tarion 1-2-7 warranty in full — year-by-year coverage from possession through year 7 (workmanship, building envelope, distribution systems, MSD)","kind":"reference","scope":"business","link_type":"depends-on"}]},"created_at":"2026-05-24T14:19:39.439Z","updated_at":"2026-05-24T14:19:39.439Z"}