Tarion Warranty Explained: What Ontario Pre-Construction Buyers Are Actually Covered For

Every new home sold by a builder in Ontario is required to be enrolled with Tarion, the provincial new-home warranty authority. If you're buying pre-construction in Ontario, Tarion is arguably the strongest buyer protection you have — but only if you know what's covered, what the deadlines are, and how to actually file a claim.

What Tarion covers

The warranty is layered by time from the occupancy date:

• Pre-delivery & deposit protection: freehold deposits protected up to $60,000 (homes ≤ $600K) or up to $100,000 (10% of price, homes > $600K); condo deposits are held in trust under Condominium Act s.81, with a Tarion statutory backstop capped at $20,000 per unit if the trust fails.
• 1-year warranty: covers defects in materials and workmanship, unauthorized substitutions, and any failure to meet the Ontario Building Code.
• 2-year warranty: covers water penetration, defects in electrical/plumbing/heating delivery systems, and major cladding issues.
• 7-year major structural defect (MSD) warranty: covers defects that materially affect the home's load-bearing capacity or intended use.
• Delayed-closing / delayed-occupancy compensation: up to $7,500 ($150/day) when the builder misses the firm date.

Notably not covered: damage caused by the homeowner, normal wear and tear, cosmetic defects reported after the 1-year mark, and items outside the builder's scope of work.

The deadlines that matter

Tarion's claim process is strict on timing. Missing a form, missing a date, or waiting for the builder to "come around" can void the claim.

• 30-Day Form: covers the first 30 days after occupancy. List every defect you notice. Anything not on this form is generally not claimable from Tarion in year 1.
• Year-End Form: covers defects appearing after day 30 through day 365. You can begin adding items to the form on day 183 of possession, and the form is automatically submitted on day 365. Tarion provides a 10-day grace period after day 365 to add items you missed — after that, year-1 items can no longer be filed.
• Second-Year Form: for 2-year warranty items only. Must be submitted before the 2-year anniversary.
• MSD Form: for 7-year structural claims. Must be submitted within 30 days of discovery, within the 7-year window.

All forms are submitted through Tarion's MyHome portal. Paper forms are no longer accepted.

Deposit protection — the most important piece for pre-construction

How your deposit is protected depends on whether you're buying a new condominium or a new freehold home. The two regimes are structured very differently, and a lot of online explainers get this wrong.

Condominium deposits — Condo Act trust first, Tarion backstop second

Every dollar of a new-condo deposit must be held in trust by the builder's lawyer under section 81 of the Condominium Act, 1998, or backed by equivalent approved security (letter of credit, surety bond, or deposit trust insurance). This trust — not Tarion — is your first line of protection, and it covers the full deposit regardless of size.

Tarion provides a statutory backstop of up to $20,000 per unit if the trust fails — for example, if a builder improperly removes deposit funds from trust and cannot replace them. Per Tarion's Deposit Protection Q&A, the $20,000 is a secondary layer, not the first-dollar coverage condo buyers often assume.

Freehold deposits — Tarion tiered coverage

• Freehold homes ≤ $600,000: up to $60,000.
• Freehold homes > $600,000: 10% of the purchase price, to a maximum of $100,000.

Unlike condos, freehold deposits are not required by statute to be held in trust — the Tarion warranty is effectively the buyer's only line of deposit protection.

If you're putting down more than the applicable cap (common on luxury condos with 20% deposit schedules, or high-end freehold), verify in Schedule B of your APS that the excess is held under Condominium Act s.81 trust terms or an equivalent security. A Tarion-only reliance is not enough above these caps.

Delayed-closing compensation — how it actually works

When a builder misses the firm occupancy/closing date, Tarion's Addendum (Schedule A1 or A2) kicks in. Total compensation is capped at $7,500, split across three heads:

• $150/day in direct living expenses (no receipts required — this is the automatic portion).
• Other out-of-pocket costs with receipts: moving, storage, temporary housing over the $150/day threshold, meals out, and similar.
• $1,500 late-notice penalty: a separate $150 × 10 days payable if the builder failed to give you 10 clear days' written notice of the delay.

Per Tarion's Freehold Delayed Closing coverage and Condo Units — Delayed Occupancy coverage, you must:

• Keep receipts for any expenses beyond the automatic $150/day.
• Submit the claim to the builder within 180 days of your closing date (or the date you terminate the APS). If the builder disputes the claim, you can escalate to Tarion during your first year of possession, or up to 365 days after termination.
• Use the correct Tarion claim form — one for freehold delayed closing, one for condo delayed occupancy.

Don't accept a "credit toward upgrades" in lieu of the cash compensation — that is not what Tarion requires the builder to pay.

Common ways buyers lose their Tarion rights

• Signing a waiver at closing. Some builders present waivers dressed up as "release of deficiencies" at closing. Never sign anything that releases Tarion rights without a lawyer reading it first.
• Missing the 30-Day Form. Moving chaos is real, but day 30 is hard. Put a calendar reminder at day 20.
• Accepting builder repairs without documentation. If the builder fixes something, get it in writing that it was done and when. Undocumented fixes can't support a claim if the problem reappears.
• Waiting for the builder. If the builder is slow or non-responsive, file the Tarion form anyway. You can always withdraw later, but you cannot re-add an item after the deadline.

When to escalate to Tarion directly

If the builder refuses a legitimate warranty claim, or drags it beyond 120 days, you can request a Conciliation — a Tarion inspector visits the home, reviews the defect, and issues a binding decision on whether it's warrantable. If Tarion finds in your favour and the builder still doesn't fix it, Tarion steps in to pay or arrange the repair directly.

Conciliations cost nothing to the homeowner unless Tarion finds no warrantable items — in which case you may owe a $250 fee. In practice, most homeowners who prepare well have at least one warrantable item, so the fee is rare.

Tarion is a powerful protection, but it's an opt-in system. Track your deadlines, use MyHome, and keep records. Many six-figure claims are won or lost on whether a form was filed in time.