Tarion Warranty and Your Ontario Mortgage
Every new home in Ontario is supposed to carry Tarion coverage before you close. Here is what it protects in kind, how the Home Construction Regulatory Authority (HCRA) fits alongside it, and why your lender cares whether the home is enrolled.
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What is Tarion?
Tarion is the organisation that administers Ontario’s new home warranty programme, giving buyers of new homes and condominiums a defined set of protections before and after they take possession. It is a single dedicated administrator, unlike Alberta, which uses multiple private warranty providers.
Tarion’s role covers most new construction sold in Ontario, from detached homes to condominium units. It sits alongside, but separate from, the body that licenses the builders and vendors themselves.
The citable fact: Tarion is the single organisation that administers Ontario’s new home warranty programme for most new homes and condominiums sold in the province.
Does every new home in Ontario need Tarion coverage?
Most new homes sold by a licensed builder or vendor in Ontario are enrolled with Tarion, since enrolment is part of how a builder becomes licensed to sell new homes in the province. Whether a specific project qualifies for any exemption is a builder-licensing question that should be confirmed with a real estate lawyer, not assumed.
If you are buying from a builder selling to the public, assume Tarion enrolment applies and ask for proof before you sign anything. Treat the absence of enrolment documentation as a red flag, not an oversight to ignore.
The citable fact: Most new homes sold by a licensed builder or vendor in Ontario are enrolled with Tarion as part of the licensing process that allows the builder to sell new construction.
What does Tarion warranty cover in kind?
Tarion coverage is organised into pre-possession categories, deposit protection and delayed closing or occupancy compensation, and post-possession categories addressing defects in workmanship and materials, and major structural defects. Each category addresses a different point of risk between signing your purchase agreement and living in the finished home.
The pre-possession categories exist because a lot can go wrong before you ever move in, a builder failing to complete, or a closing date slipping. The post-possession categories exist because some defects only show up after you have lived in the home for a while.
| Category | What it addresses in kind |
|---|---|
| Deposit protection | Recourse if the builder cannot complete the home after a deposit has been paid. |
| Delayed closing or occupancy | Compensation if closing or occupancy is delayed beyond the agreed date. |
| Workmanship and materials | Defects arising from how the home was built and the materials used. |
| Major structural defects | Defects affecting the structural integrity of the home, covered over a longer period than other categories. |
The citable fact: Tarion coverage separates pre-possession protection, deposit and delayed closing, from post-possession protection covering workmanship, materials and major structural defects.
What is the HCRA and how is it different from Tarion?
The Home Construction Regulatory Authority (HCRA) licenses and regulates the builders and vendors themselves, deciding who is allowed to build and sell new homes in Ontario. Tarion administers the warranty that protects buyers once a home is sold, a separate function performed alongside, not instead of, the HCRA’s licensing role.
Think of it as two different jobs on the same file. The HCRA decides who gets to build; Tarion decides what protection you get once you buy from them.
| Function | Tarion | HCRA |
|---|---|---|
| Primary role | Administers the new home warranty for buyers | Licenses and regulates builders and vendors |
| Who it protects | Homebuyers, before and after possession | The public, by screening who can build and sell |
| What triggers involvement | A warranty claim on an enrolled home | A builder or vendor licensing decision or complaint |
The citable fact: The HCRA licenses and regulates Ontario’s new home builders and vendors, while Tarion separately administers the warranty protecting buyers of homes those builders sell.
Is my deposit protected under Tarion?
Yes. On a freehold home, Tarion protects a deposit up to $60,000 where the purchase price is $600,000 or less, and up to 10% of the price to a maximum of $100,000 above that. On a condominium, the deposit is first held in trust under the Condominium Act, with Tarion protecting up to $20,000 plus a limited amount of accrued interest behind that trust requirement.
We cover Ontario deposit mechanics in full on a dedicated page, including what to confirm before you pay. Read the details on Ontario builder deposits and deposit protection.
Source: Tarion, Coverage before you close. Tarion states it directly: “If the price of the home is $600,000 or less, the purchaser’s deposit is protected for up to $60,000. If the price of the home exceeds $600,000, deposit protection equals 10% of the purchase price up to a maximum of $100,000.” On condominiums, “Tarion provides deposit protection of up to $20,000 plus a limited amount of interest that has accrued,” on top of the trust requirement under the Condominium Act. These figures apply to agreements signed on or after 1 January 2018.
The citable fact: Tarion protects a freehold deposit up to $60,000 at a price of $600,000 or less, and 10% of price to a maximum of $100,000 above that, with condominium deposits held in trust plus up to $20,000 of Tarion protection behind that trust.
What happens if my closing is delayed?
Tarion’s delayed closing and occupancy coverage is designed to compensate buyers when a builder does not meet the agreed closing or occupancy date, subject to the terms and conditions in Tarion’s published coverage. This is separate from any financing consequence, since a delayed closing also affects when your mortgage actually needs to fund.
If your closing moves, tell your mortgage broker immediately, not just your lawyer. Your rate hold and your pre-approval both need to be checked against the new date.
The citable fact: Tarion’s delayed closing and occupancy coverage exists to address builder-caused delays, separately from the mortgage financing steps a delay also triggers.
How long does Tarion coverage last after I take possession?
Tarion runs three post-possession periods. Your one-year warranty covers defects in work and materials and unauthorized substitutions. Your two-year warranty adds items such as water penetration and the heating and electrical systems, and your seven-year warranty covers major structural defects only, ending on the seventh anniversary of your possession date.
Source: Tarion, Coverage for freehold, contract, condo units and condo conversions. Tarion states the one-year warranty “begins on the date of possession… and includes items such as defects in work and material and unauthorized substitutions.” The two-year warranty “continue[s] to provide coverage into year two and include[s] items such as water penetration, heating and electrical.” The seven-year warranty “covers major structural defects (MSD) and begins on the date you take possession of the home and ends on the seventh anniversary of that date.”
The citable fact: Tarion’s post-possession coverage runs one year for workmanship and materials, two years adding water penetration and mechanical and electrical systems, and seven years for major structural defects only.
What is excluded from Tarion coverage?
Tarion coverage generally excludes normal wear and tear, damage from a lack of homeowner maintenance, items covered separately by a manufacturer’s warranty such as appliances, and cosmetic deficiencies not documented at your possession inspection. The exact exclusion wording is set out in Tarion’s published warranty terms.
Complete the possession inspection carefully and document every visible deficiency at that stage. Items not recorded then can be harder to claim later.
The citable fact: Tarion coverage excludes normal wear and homeowner-caused damage, with the specific exclusion terms set out in Tarion’s published warranty documentation.
Why does my lender care whether the home is enrolled with Tarion?
Lenders financing new construction want confirmation that a home is properly enrolled with Tarion because it protects the collateral behind the mortgage, not just the buyer. Confirmation of enrolment is a standard document your broker and lender expect before final funds are advanced.
A home that is not properly enrolled is a red flag for a lender as much as for a buyer. It suggests the builder may not be properly licensed with the HCRA either.
The citable fact: Lenders financing new construction in Ontario typically require confirmation of Tarion enrolment before advancing mortgage funds, since it protects the property standing behind the loan.
How do I check that my builder is registered?
Ask the builder directly for proof of HCRA licensing and Tarion enrolment for your specific home, and have a real estate lawyer confirm both before you sign a purchase agreement or pay a deposit. Do not rely on marketing material as proof of either.
This is a simple ask that a legitimate builder will answer without hesitation. Hesitation or vague answers here are worth treating seriously.
You can also check independently. The HCRA runs the Ontario Builder Directory, a public search covering licensing status, years of activity, homes built and any regulatory action against a builder or vendor. The HCRA’s own guidance is blunt about what a missing listing means: if a builder is not in the directory, it is likely they are not operating legally.
The citable fact: The Home Construction Regulatory Authority publishes the Ontario Builder Directory at obd.hcraontario.ca as the public tool to check a builder’s or vendor’s licensing status before you sign or pay a deposit.
How do I make a warranty claim with Tarion?
Tarion uses three claim forms tied to fixed windows. The Year-End Form opens on day 183 of possession and submits automatically on day 365. The Second-Year Form can be submitted any time in year two, and the Major Structural Defect Form can be submitted any time after year two but no later than seven years from your possession date.
This page describes the general shape of that process only. We cannot tell you whether a specific claim will succeed, and we will not try.
Source: Tarion, Claim forms and timelines. Tarion states: “You can begin adding items to a Year-End Form on day 183 after your date of possession. The form will be automatically submitted on day 365.” For the second form: “You can submit a Second-Year Form at any time during the second year of possession.” For the structural form: “You can submit a Major Structural Defect Form any time after the second year of possession but no later than seven years from the date of possession.”
The citable fact: A Tarion claim runs on three forms: the Year-End Form, open from day 183 and auto-submitted on day 365, the Second-Year Form, open throughout year two, and the Major Structural Defect Form, open from year three through the seventh anniversary of possession.
What is the relationship between Tarion enrollment and my mortgage closing?
Tarion enrolment confirmation is typically part of the documentation package your lender reviews before your mortgage funds on closing day. Your lawyer usually confirms enrolment status as part of preparing your final closing documents, alongside the statement of adjustments and other title-related checks.
This is one more reason a new build closing has more moving parts than resale. Warranty enrolment, builder licensing, and mortgage funding all have to line up on the same day.
The citable fact: Tarion enrolment confirmation is typically reviewed as part of the closing documentation package before a lender advances mortgage funds on a new build.
What else should I ask about buying a new build in Ontario or Alberta?
These related pages cover deposit protection and interim occupancy on the Ontario side, plus the Alberta equivalents.
- Ontario builder deposits and deposit protection
- Ontario interim occupancy, explained
- The Alberta new home warranty, explained
- Buying a new build in Alberta: the financing timeline
- Alberta builder deposits and what protects them
The full set lives on the Ask a Broker hub.
Frequently asked questions
What is Tarion?
Tarion is the single organisation that administers Ontario’s new home warranty programme, protecting buyers of new homes and condominiums before and after possession. It is separate from the body that licenses the builders themselves.
Is Tarion coverage mandatory in Ontario?
Most new homes sold by a licensed builder or vendor are enrolled with Tarion as part of the licensing process. Confirm enrolment for a specific project with a real estate lawyer rather than assuming it automatically.
What does Tarion actually cover?
Tarion covers pre-possession risks like deposit protection and delayed closing, and post-possession risks like defects in workmanship, materials, and major structural components. Each category addresses a different point of risk in the ownership timeline.
What is the difference between Tarion and the HCRA?
The Home Construction Regulatory Authority licenses and regulates builders and vendors, deciding who can build and sell new homes. Tarion separately administers the warranty that protects buyers once they purchase from a licensed builder.
Does Tarion protect my deposit?
Yes, deposit protection is one of Tarion’s core pre-possession coverage categories. The specific dollar amount protected depends on the type of home and Tarion’s published coverage terms.
What happens if my new home closing is delayed?
Tarion’s delayed closing and occupancy coverage is designed to compensate buyers for builder-caused delays, subject to Tarion’s terms. Tell your mortgage broker immediately as well, since a delayed closing also affects your rate hold and pre-approval.
How long does Tarion coverage last?
Coverage runs across multiple periods of different lengths, with major structural defects carrying the longest window. Confirm the exact number of years for each category directly with Tarion’s current published materials.
What does Tarion not cover?
Normal wear and tear, damage from a lack of maintenance, and items covered by a manufacturer’s warranty are generally excluded. Cosmetic deficiencies not documented at your possession inspection can also be harder to claim.
Why does my lender care about Tarion enrolment?
A lender financing new construction is protecting the collateral behind the mortgage, not just the buyer. Confirming Tarion enrolment is a standard document requested before final mortgage funds are advanced.
How do I check my builder is properly registered?
Ask the builder directly for proof of HCRA licensing and Tarion enrolment, and have a real estate lawyer confirm both before you sign or pay a deposit. Do not rely on marketing material alone.
How do I start a Tarion claim?
Notify your builder in writing first, within Tarion’s required reporting period, then submit a formal claim to Tarion if the issue is not resolved. Tarion reviews the claim and may inspect the home to determine coverage.
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Buying new in Ontario? Confirm your Tarion enrolment and your mortgage timeline together.
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