In Ontario, every new home must come with a warranty provided by the builder — it’s the law. Tarion is the organization responsible for administering this mandatory warranty, ensuring that buyers of new homes are properly protected both financially and legally. Whether you’re buying a new freehold home or a condominium unit, Tarion coverage extends up to seven years after you take possession.
Understanding the Tarion Warranty is critical to protecting your investment and knowing your rights as a new homeowner. Here’s everything you need to know.
How the Tarion Warranty Works
Who Provides the Warranty?
If you purchase a new home built by a builder or vendor licensed under the Home Construction Regulatory Authority (HCRA), your home automatically qualifies for Tarion warranty protection — as long as it meets specific criteria outlined in the Ontario New Home Warranties Plan (ONHWP) Act.
The warranty coverage:
- Begins when you sign the Agreement of Purchase and Sale.
- Remains valid even if you sell the home during the warranty period.
- Provides protection up to seven years after possession.
Tarion Warranty Coverage Before You Take Possession
1. Deposit Protection
If your builder goes bankrupt, breaches the purchase agreement, or you have a statutory right to terminate the deal, Tarion protects your deposit.
- Coverage limits depend on the agreement date and purchase price.
2. Delayed Closing/Occupancy Compensation
If your builder fails to meet the agreed-upon occupancy or closing date, Tarion ensures you’re compensated.
- Builders must provide notice and valid reasons for delays (e.g., fire, strikes) or face penalties.
📌 [Read more about pre-possession coverage here.]
Tarion Warranty Coverage After You Take Possession
Tarion’s protection continues after you move in, structured into three stages:
1. One-Year Warranty
- Covers defects in workmanship and materials.
- Protects against violations of the Ontario Building Code.
- Applies during the first year of possession, even if the home is sold.
2. Two-Year Warranty
- Covers issues like water penetration through the building envelope.
- Protects plumbing, electrical, and heating systems.
- Active from year one to year two after possession.
3. Seven-Year Major Structural Defects (MSD) Warranty
- Protects against serious structural issues that affect the home’s integrity.
- Covers major damages from soil movement, structural cracks, or failure of load-bearing elements.
- Valid for seven years from the possession date.
📌 [Read more about post-possession coverage here.]
Additional Tarion Protections
Extended Warranty for Missing Items
If certain items (e.g., appliances) are missing when you take possession, their warranty begins once they are installed — as long as you report the missing items within the first year.
Temporary Relocation Allowance
If your home becomes uninhabitable due to a warranted issue, Tarion may cover your temporary accommodation costs.
Exclusions: What Tarion Warranty Doesn’t Cover
While Tarion offers broad protection, some items are excluded, including:
- Normal wear and tear
- Damage caused by homeowners
- Unauthorized alterations
- Insect or rodent damage
Always review the warranty documents to understand what’s covered and what’s not.
How the Tarion Warranty Process Works
- Warranty enrolment begins when you sign the Agreement of Purchase and Sale.
- Builders must pay an enrolment fee to Tarion, which is charged to the buyer during final closing.
- Builders are legally required to comply with occupancy and closing timelines or compensate buyers for delays, under certain conditions.
Final Thoughts
The Tarion Warranty offers vital protection to Ontario homebuyers, ensuring peace of mind both before and after taking possession of a new property. By understanding your rights and the coverage available, you can better navigate the purchase process and safeguard your investment.