Tarion Warranty Explained: What's Covered on a New Ontario Home

The Tarion warranty is a builder's warranty, backed by Tarion, that covers defects in every new home in Ontario: one year for workmanship and materials, two years for water leaks, plumbing, electrical, heating and the building envelope, and seven years for major structural defects. Tarion also protects your deposit up to set limits and sets compensation if your closing is delayed without proper notice.

Tarion is the independent, not-for-profit organization the Ontario government set up to run the new home warranty program. The warranty itself comes from your builder: the builder must fix covered defects, and Tarion steps in when they don't. Builders are licensed by a separate body, the Home Construction Regulatory Authority (HCRA), which also runs the Ontario Builder Directory.

What the Tarion warranty covers

Tarion warranty coverage comes in three layers that all start on the day you take possession. Each layer keeps the coverage of the ones before it, so the seven-year layer is the narrowest.

Coverage	How long	What it covers
One-year warranty	1 year from possession	Defects in work and materials, the home being fit to live in, Ontario Building Code violations, unauthorized substitutions
Two-year warranty	2 years from possession	Water coming through the basement or foundation walls, defects that let water into the building envelope (windows, doors, caulking), defects in the electrical, plumbing and heating delivery and distribution systems, exterior cladding that detaches or deteriorates, Building Code violations that affect health and safety
Seven-year warranty	7 years from possession	Major structural defects: defects that cause a load-bearing part of the home to fail, seriously weaken its ability to carry loads, or seriously affect the use of a significant part of the home

The warranty stays with the home, so a buyer who purchases a home that's two years old gets what's left of the seven-year coverage.

Coverage limits

Tarion's coverage limits set the maximum it will pay out on a home, and they depend on the date the first agreement of purchase and sale was signed.

Home type	Agreement signed on or after July 1, 2023	Signed Feb 1, 2021 to June 30, 2023
Freehold home (detached, semi, freehold townhouse)	$400,000	$300,000
Condo unit	$300,000	$300,000
Condo common elements	$100,000 per unit, up to $3.5 million	$100,000 per unit, up to $3.5 million
Environmentally harmful substances (for example, radon)	$50,000	$50,000

Older agreements have lower limits. Your warranty certificate, which the builder gives you at completion, shows when your coverage started.

Condo common elements

In a new condo, the shared parts of the building (the common elements: hallways, roof, garage and, in most buildings, the windows of your unit) have their own warranty. That coverage starts when the condo corporation is registered, not on your possession date, and the corporation's board handles the claims. If a problem is in a common element, report it to the property manager or the board.

Deposit protection

Tarion protects the deposit you pay a builder, including money paid for upgrades and extras, if the builder goes bankrupt, fundamentally breaches the agreement, or you properly end the agreement. The limit depends on whether it's a freehold home or a condo.

Home type	Deposit protection limit
Freehold, price $600,000 or less	$60,000
Freehold, price over $600,000	10% of the price, up to $100,000
Condo unit	$20,000

The condo limit is lower because Ontario's Condominium Act already requires condo builders to hold deposits in trust. Tarion's $20,000 is a backstop for the rare case where that doesn't happen.

Register your freehold purchase within 45 days

Since April 1, 2026, buyers of new freehold homes must register their purchase with Tarion within 45 days of signing the agreement. It's free, done online, and your lawyer or agent can do it for you. Don't assume the builder has done it.

Tarion has said the deposit coverage changes tied to this rule take effect on January 1, 2027. From then, freehold buyers who don't register within 45 days have their deposit claims paid from a separate fund capped at $15 million a year across Ontario, which can mean receiving less than the full amount if claims that year exceed the fund. The rule doesn't apply to condo purchases or to homes built on land you already own.

Tarion also lists a provincial change for January 1, 2027: buyers of new freehold homes get a 10-day cooling-off period once they receive the new information sheet and addendum with their agreement. Buyers of new condos from a builder already have a 10-day period to back out under the Condominium Act. Talk to your lawyer about how either applies to your agreement.

The pre-delivery inspection (PDI)

The pre-delivery inspection (PDI) is a walk-through your builder must do with you before you take possession, to record anything damaged, missing, incomplete or not working on a PDI form. The PDI form is the formal record of the home's condition on the day you move in, and it can matter later if there's a dispute about whether you caused a problem.

What to check at your PDI:

• Surfaces: scratches, chips or cracks in floors, countertops, tubs, sinks, tile, cabinets and mirrors. These are the items most often disputed later.
• Doors and windows: that they open, close and lock, and that glass and screens are intact.
• Fixtures and appliances: that taps run, toilets flush, lights and outlets work and included appliances are installed.
• Finishes: paint, trim, drywall and anything that doesn't match your agreement or upgrade selections.
• Systems: ask the builder to show you how the furnace, ventilation, water heater and shut-off valves work.

Take photos and make sure every item you see is written on the form before you sign, and keep your copy. You can send someone in your place if you can't attend; check Tarion's current rules on what written authorization they need.

The PDI form doesn't replace a warranty claim. If items on it aren't fixed, you still need to submit them through Tarion's claim process.

Warranty claim deadlines

For a Tarion warranty claim, you report problems to your builder in writing and, to keep Tarion's help available, you submit them through MyHome, Tarion's online portal, within set deadlines. Miss a deadline and Tarion may not be able to help with that item, even if the builder is still responsible.

Homes with a possession date on or after May 1, 2024

You can add items to your list in MyHome at any time during your first year. MyHome submits the list automatically three times:

Submission	When
Initial form	Day 41 after possession
Mid-year form	Day 183 (about six months)
Year-end form	Day 365 (end of your first year)

Each submission gives your builder a 120-day repair period. If items aren't fixed, you can ask Tarion for a conciliation (see below) within a set window for each form; for the year-end form, that window runs to 150 days after your first year ends.

Homes with a possession date before May 1, 2024

These homes use the older process: a 30-Day Form in the first 30 days and a Year-End Form in the last 30 days of the first year. MyHome shows the dates for your home.

Second-year and seven-year claims

Two-year items are submitted on a Second-Year Form and major structural defects on a Major Structural Defect Form, before that coverage ends. Check the dates for your home in MyHome.

What isn't covered

The Tarion warranty covers defects in how the home was built, not everything that can go wrong in a home. Tarion lists these exclusions:

• Normal wear and tear, and normal shrinkage of materials
• Damage caused by you, your visitors or your own changes to the home
• Defects in materials, design or work you supplied yourself
• Dampness or condensation from poor ventilation or a misused humidifier
• Secondary damage, such as damage to your belongings or personal injury
• Settling of the land, except under the home's footings
• Acts of God, and damage caused by a municipality or utility
• Insect or rodent damage, unless the construction didn't meet the Building Code
• Surface defects you accepted in writing at possession

Appliances and items like a furnace usually come with their own manufacturer warranties, which are separate from Tarion.

How to make a claim and when Tarion steps in

Tarion warranty claims start with your builder. You tell them about the problem in writing, give them access to inspect and repair, and submit the items through MyHome by the deadline. Your builder must fix covered items whether or not you ask Tarion for help.

If the builder doesn't fix an item within the repair period, or disputes whether it's covered, you can ask Tarion for a conciliation. A conciliation is an inspection by Tarion, usually with the builder present, that decides which items are covered. The builder then has a final 30 days to fix them. If they still don't, Tarion resolves the claim directly, by paying compensation or arranging repairs by a third party.

You can reach Tarion at 1-877-982-7466. If you're unsure about your rights under the agreement itself, talk to your lawyer.

Delayed closing compensation

Delayed closing compensation is money a builder owes the buyer when it misses a guaranteed closing date without proper notice, and under Tarion's rules you can claim up to $7,500. The $7,500 includes $150 a day for living costs such as accommodation and meals, with no receipts needed, plus other costs caused by the delay, such as extra moving and storage, which do need receipts.

Your dates are in the Statement of Critical Dates in the Tarion Addendum attached to your agreement. For freehold homes, a builder can extend a tentative closing date twice, by up to 120 days each time, without paying compensation, if they give notice at least 90 days ahead.

Unavoidable delays, such as a strike or fire, can also extend the dates when properly notified. If the home still isn't ready by the outside closing date, you have a 30-day window to end the agreement and get your money back with interest. Condo occupancy dates follow similar rules.

You claim compensation from the builder first, within 180 days of closing. If they don't pay, you can claim through Tarion during your first year in the home. These rules come from the Addendum in your own agreement, so have your lawyer check which version applies.

Checking a builder's record

Before you sign, look the builder and the seller (called the vendor) up in the Ontario Builder Directory, run by the HCRA. It shows whether they're licensed to build and sell new homes in Ontario, their licence status and any regulatory or enforcement history. Since February 1, 2021, builders and vendors must be licensed by the HCRA before they can enroll homes with Tarion.

Selling or building a new home without a licence is illegal in Ontario, and a home that isn't enrolled may not come with the protections on this page. Your lawyer can confirm the home is enrolled before closing.

New home prices usually include HST, and some buyers qualify for rebates that are often assigned to the builder in the agreement. How that applies to you is a question for your lawyer before you sign. For the other costs on closing day, see closing costs in Ontario.

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