New Home Warranty Programs (Tarion) Explained

Buying a new condo or home in Toronto is a big deal. You must be excited about getting a brand-new place, modern finishes, and that unbeatable “first owner” feeling. But let’s be honest: it can also feel a bit overwhelming. Pre-construction timelines, deposits, builder delays, fine print… there’s a lot to keep track of.

That’s where Tarion home warranty coverage comes in.

If you’re buying a new condo or home in Ontario, you’ve probably heard the name. It’s essentially your safety net as a new condo buyer, and understanding how it works can help you avoid costly surprises.

In this post, we’ll break down:

• What Tarion is and why it exists
• How is your deposit safeguarded
• What kinds of protection and warranties do you get as a buyer
• What’s not covered
• How to file a claim if something goes wrong

We’ll also cover closing costs related to the warranty, what to expect with delayed occupancy, and how to check up on your builder’s track record.

What is the Tarion Home Warranty Program?

Let’s start with the basics. Tarion is not your builder, and it’s not a government agency either. It’s actually a non-profit corporation that the Ontario government set up back in 1976 to protect new home and condo buyers across the province.

Think of Tarion as the referee between you and your builder. Their main jobs?

• Enforce Ontario’s home warranty laws
• Make sure builders follow warranty rules
• Help buyers resolve disputes with builders
• Pay compensation when builders don’t meet their obligations

All of this is governed by the Ontario New Home Warranties Plan Act, which sets out the legal obligations for builders and the rights of buyers like you.

When you buy a new condo in Mississauga, for example, or other cities in Ontario, your unit must be registered with Tarion and automatically comes with warranty coverage, assuming your builder is legit (we’ll tell you how to check that later).

And if you’re looking for real condo or home projects that include Tarion protection, here are the top 10 developments that include a new home warranty in Ontario:

• Sugar Wharf Condos (Toronto)
• Empire Quay House (Toronto)
• M6 Condos (Mississauga)
• VMC Block 6E Condos (Vaughan)
• Bravo Festival Condos (Vaughan)
• Station Park Condos (Kitchener)
• Brightwater Condos and Towns (Mississauga)
• 1989 Condos (Burlington)
• 21 Dundas Street West (Oakville)
• 7750 Bayview Avenue Condos (Markham)

How Tarion Protects Your Deposit

Let’s talk money. Specifically, your deposit—that chunk of change you hand over when you agree to buy a pre-construction condo.

In Ontario, deposits for condos are protected under two main rules:

1. The Condominium Act – This law requires your deposit to be held in trust by the builder’s lawyer, so they can’t just run off with it.
2. Tarion Deposit Protection – If something goes wrong and that trust account isn’t properly handled, Tarion will step in to cover up to $20,000 of your deposit.

This is a huge safety net, especially when you’re investing tens of thousands upfront before construction even starts.

A few example scenarios where Tarion’s deposit protection might kick in:

• The builder goes bankrupt before construction begins.
• Your unit is never built, and you can’t recover the deposit through the trust.
• There’s a legal dispute, and your deposit is mishandled or misallocated.

This protection is automatic—you don’t have to apply or pay extra for it. But keep in mind, the $20,000 limit is specific to condos. If you’re buying a freehold home, the deposit protection can go up to $60,000. If the purchase price is over $600,000, you’re covered for 10% of the price, up to a maximum of $100,000.

And according to the Tarion website, “Effective July 1, 2025, if you purchase a freehold home, you should register your purchase with Tarion within 45 days of signing. As of January 1, 2026, purchasers who provide notice within 45 days of signing will qualify for the maximum amount of deposit coverage currently available under the warranty program.”

It’s always wise to review your Agreement of Purchase and Sale carefully and ask where exactly your deposit will be held.

What the Tarion Home Warranty Covers

Tarion provides three levels of coverage, each with its own timeframe and focus. Knowing what’s covered (and for how long) gives you leverage if something isn’t up to par.

Let’s break it down:

1-Year Tarion Warranty

This is your “everything should be new and working properly” phase. It covers:

1. Defects in workmanship and materials, like uneven flooring, loose tiles, and poorly installed trim.
2. Violations of the Ontario Building Code
3. Water leakage into the condo unit.

2-Year Tarion Warranty

Now we move into the essential systems. This phase covers:

1. Major mechanical problems like issues with plumbing, heating, and electrical systems.
2. Water penetration and major leakages.
3. Issues with things like cladding, windows, and doors that affect performance or safety.

7-Year Tarion Warranty (Major Structural Defects)

This one is the most comprehensive one and covers the big stuff like:

1. Foundation issues
2. Problems with load-bearing walls, beams, columns, floors, and roof structure
3. Anything that makes your unit unsafe or prevents you from living in it

What is NOT Covered by Tarion

While Tarion covers a lot, it’s not a catch-all warranty. Some things just aren’t part of the deal, and that’s where many buyers get tripped up. Let’s clear the air.

Here’s what Tarion doesn’t cover:

• Normal wear and tear, like small cracks in drywall, fading paint, or squeaky floors. These are expected over time and not considered defects.
• Homeowner negligence. Let’s say you forget to clean the vents or damage the floors during a move; that’s on you, not the builder or Tarion.
• Unauthorized alterations or a little DIY project that changes your plumbing or rewires something will not be covered.
• Manufacturer warranties are not part of the deal. Appliances, HVAC units, and other fixtures often have separate warranties from the manufacturer. 
• Consequential damages; For example, if a water leak damages your expensive rug or laptop, Tarion won’t reimburse you for those personal items.
• Commercial or non-residential use: Your condo must be used as a residence. If you turn it into a studio or office, your warranty coverage may be void.

Tarion’s new home warranty offers important protection, but it’s not a substitute for insurance or proper upkeep.

Registering Your Home with Tarion

Before the warranty protection kicks in, your new home has to be officially registered with Tarion. But don’t worry. That’s not your responsibility. It’s on the builder.

Every builder in Ontario is legally required to:

• Be licensed with Tarion
• Enroll each condo or home unit they sell
• Provide a Tarion warranty certificate to the buyer

This registration ensures your unit is covered the moment it’s legally yours. What can you do as a buyer?

• Visit Tarion’s official Ontario Builder Directory
• Search by builder name to see if they’re registered, licensed, and in good standing
• Look for past warranty claims, chargeable conciliations, and their record of project completions

This is essential research, especially if you’re buying pre-construction. You want a builder who’s reliable and has a clean track record.

Remember, if the unit isn’t enrolled properly, you could lose warranty protection. In worst-case scenarios, Tarion may deny a claim if the builder didn’t register the home, even if the issue would normally be covered. So, before closing day, ask for written confirmation that your home has been enrolled with Tarion.

Understanding Delayed Closing Compensation

Pre-construction timelines include a couple of important details, but the key one is move-in dates… and let’s be honest, they’re rarely set in stone. That’s where Tarion’s delayed closing compensation steps in. Here’s what it covers:

If your builder doesn’t deliver your unit by the firm closing date (or even a proper extended one), you may be entitled to compensation. This includes:

• $7,500 max in total compensation
• $150 per day for unexpected delays beyond the allowed timeline
• Reimbursement for costs like temporary housing or storage, if incurred due to the delay

There are two more dates you should mark on your calendar:

• Firm Occupancy Date, which is the legally agreed-upon date.
• Outside Occupancy Date or the maximum possible delay allowed.

If by the time you hit the Outside Date, you haven’t got your unit without proper notice or amendment, you’re entitled to compensation. 

To be eligible:

• You must file a claim within one year of taking occupancy
• Keep all your receipts and documentation

Costs Associated with Tarion Warranty

Let’s clear up a common misconception: while the builder enrolls your home with Tarion, the cost of the warranty is often passed on to you, usually included in your closing costs.

Technically, the builder pays the enrollment fee upfront to Tarion. But in practice, many builders include this amount in your statement of adjustments, meaning you pay it at closing.

It’s one of those hidden condo fees buyers don’t always expect.

Tarion’s fee is based on the sale price of your unit. Here’s a rough guide:

• $300,000 condo → $585 Tarion Enrolment Fee + 13% HST ($76.05) = $661.05 (Total Per Home Amount to be submitted to Tarion)
• $500,000 home → $970.00 Tarion Enrolment Fee + 13% HST ($126.10) = $1,096.10
• $1,000,000 home → $2,190.00 Tarion Enrolment Fee + 13% HST ($284.70) = $2,474.70

These numbers can change slightly from year to year. For the latest fee chart, refer to Tarion’s official fee calculator.

But here’s the question you’ve been waiting all along: Is it worth it?

Absolutely! For a few hundred dollars, you get up to seven years of protection. Now, just compare that to the cost of a foundation repair or a leaky roof. It’s absolutely worth every penny.

One more thing to keep in mind: If you don’t see this fee listed in your purchase agreement or closing documents, ask your lawyer or agent. It’s better to clarify upfront than be surprised later.

How to Make a Tarion Home Warranty Claim

If your home is covered under the Tarion warranty, you’ve got a clear path to getting it fixed. Here’s a step-by-step guide on how to navigate the claims process:

1. Document the problem: Take photos or videos and write down the date you discovered the issue. 
2. Notify your builder first: Builders get the first shot at resolving the issue. Email or mail them a clear description of the defect and keep a copy for your records.
3. Wait for a response: Builders usually have 30 days to address the issue. If they ignore it or give you the runaround…
4. Escalate to Tarion: If unresolved, submit a warranty claim directly through Tarion’s online portal. There, you can register your home and track claims.

It seems obvious, but many buyers forget that each warranty type has its own claim window:

• One-Year Warranty: File within the first 12 months of possession
• Two-Year Warranty: File between months 13–24
• Seven-Year Warranty: Applies to major structural defects and can be submitted up to year 7

If there’s a dispute, Tarion offers several resolution methods:

• Mediation: Informal negotiation
• Conciliation: Tarion inspector steps in to assess
• Arbitration: A more formal, binding decision process

Many disputes get resolved at the conciliation stage. It’s not a court, but it’s fairly structured and can lead to fair outcomes. In our experience, the earlier you report problems, the smoother the resolution process will be.

Researching Your Condo Builder

Before you sign anything, there’s one thing you must do: research your builder. A flashy showroom and slick marketing don’t always tell the full story.

Your builder is responsible for construction quality, Tarion enrollment, and honoring warranty claims. A bad builder could leave you with unresolved issues, delayed occupancy, or worse.

On the other hand, working with a reputable condo developer in Toronto will save you a lot of headaches and years of frustration.

To search your developers’ portfolio, Head over to Tarion’s Ontario Builder Directory and search by builder name. The metrics you can check for assessing a builder’s credibility include:

• Whether they’re licensed and in good standing
• How many homes/condos have they built
• Any past claims or charges
• Their overall performance rating (Low/Medium/High Risk)

How to do the research?

Look for patterns! One claim? It could be a fluke. Ten unresolved claims? Probably a red flag! Word of mouth is also another source for verifying a developer’s work quality and commitment. Online forums, Facebook groups, Reddit threads—your VIP agent may have insights on a builder’s reputation.

Bottom Line

Buying a pre-construction condo is a major milestone, and understanding how the Tarion warranty works is essential to protecting that investment. Knowing what’s covered and what’s not gives you real peace of mind. Before you sign anything or move in, review your Tarion documents carefully, confirm your unit is enrolled, and don’t hesitate to ask questions. 

We know the world of pre-construction can feel like a maze of forms, deadlines, and fine print. But don’t worry! You’re not alone. Whether it’s your first home or an addition to your investment portfolio, our experienced team at Platinum Condo Deals is here to walk you through it—Tarion coverage and all. 

Reach out today, and we’ll help you move forward with clarity and confidence.