Blog by Ravi Singh

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New Home Purchases

An Introduction to New Home Warranties (Originally posted in New Dream Homes and Condos Magazine)

(Here's a valuable article on Tarion and what you're entitled to as a new home purchaser. RS) 


One of the greatest benefits of buying a new home or condominium in Ontario is that it comes with a mandatory warranty that is provided by the builder and backed by Tarion Warranty Corporation.



Tarion is a private corporation that protects new home and condominium buyers according to the terms of the Ontario New Home Warranties Plan Act. The Act requires that builders in Ontario provide new warranty coverage to homebuyers and stipulates that they must register with Tarion and enrol every housing unit prior to the start of construction. Tarion is responsible for enforcing the Act and managing a guarantee fund to ensure that the builder’s warranty will be honoured. Since its inception in 1976, Tarion has guaranteed warranty protection for over 1.45 million newly built homes and condominiums in Ontario .



New Home Warranty Protection


A new home’s statutory (legal) warranty begins with Deposit Protection which is available if the builder does not complete the sale of the home through no fault of the buyer. Homebuyers who took possession of a new home before July 1, 2006 have warranty coverage up to $150,000. Homes with a possession date on or after July 1, 2006 have warranty coverage up to $300,000. Deposits are protected up to $40,000 for freehold homes, while deposits on condominiums are protected up to $20,000, with amounts over that covered separately under the Condominium Act. There is also Delayed Closing Protection up to $5,000 if the closing on a new home is delayed beyond five days and the builder does not provide proper written notice. Once new home buyers move in, their home is protected by specific one, two and seven-year warranties. 



Buyer and Builder Education


One of Tarion’s responsibilities is to educate consumers and builders about new home warranty coverage. This is accomplished in several different ways. Advertising describes Tarion’s mandate and encourages consumers to visit the website or to call for more information about warranty protection. Tarion also publishes a variety of helpful brochures which can be downloaded from its website and holds monthly educational seminars for which consumers can register online. 



Two types of seminars are offered: “Buying a New Home,” which focuses on the process of purchasing a new home and “Understanding Warranty Coverage,” which provides homeowners with an overview of the comprehensive warranty coverage that comes with every new home built in Ontario . Due to its popularity with consumers, the seminar program is being expanded to include other locations in the province and also languages other than English, such as Mandarin. In addition to public awareness activities, Tarion communicates regularly with the building community to educate builders about warranty policies and procedures. For more information, please visit or call 1-877-9TARION.




Industry Regulation


Part of Tarion’s mandate as the regulator of Ontario ’s new home building industry is to register home builders every year. As part of this registration process, builders must clearly demonstrate that they have the technical experience, customer service capabilities and financial standing required to successfully build new homes in Ontario . Tarion employs a team of former police officers who investigate builders that do not register or enrol new homes. Failing to do so can result in steep fines and even jail time in the case of repeat offenders.