Tarion Warranty in Ontario: What Coverage Do New Homeowners Get?
Every new home built by a registered builder in Ontario comes with a mandatory warranty administered by Tarion. The warranty runs for seven years from your possession date. It covers construction defects, building code violations, water penetration, and major structural problems. For purchase agreements signed on or after July 1, 2023, coverage goes up to $400,000 for freehold homes and $300,000 for condominium units.
That is the short answer. The longer answer matters more, because Tarion coverage is tied to strict deadlines. Miss a reporting window and you can lose the right to claim, even for a defect the warranty clearly covers.
This guide explains what Tarion covers, what it excludes, how the claim process works, and the dates every Ontario new home owner should put in their calendar.
What Is Tarion?
Tarion is a non-profit corporation that administers Ontario's new home warranty program under the Ontario New Home Warranties Plan Act. It is not an insurance company you choose. It is not optional. If your home was built by a registered builder, the warranty exists automatically and the builder pays the enrolment fee.
Two organizations often get confused here:
- Tarion administers the warranty. Claims, timelines, inspections, and payouts go through Tarion.
- The HCRA (Home Construction Regulatory Authority) licenses and regulates builders. Complaints about builder conduct go to the HCRA.
Since 2021, these roles have been split. If your issue is a defect in your home, you deal with Tarion. If your issue is an unlicensed or misbehaving builder, you deal with the HCRA.
Who Gets Tarion Coverage?
Coverage applies to most new residential builds in Ontario, provided a registered builder constructed the home:
- Freehold homes (detached, semi-detached, townhomes)
- Condominium units, including common elements
- Contract homes built on land you already own
- Condo conversions from non-residential buildings
The warranty attaches to the home, not the owner. If you buy a resale home that is less than seven years old, you inherit whatever coverage remains. Contact Tarion with proof of ownership to transfer the warranty into your name.
One important exception: if you act as your own general contractor and hire separate trades to build your home in stages, the statutory warranty does not apply. It is designed for homes where a registered builder does the work.
Coverage Before You Move In
Tarion protection starts before you get the keys. Three protections apply during the purchase phase.
Deposit Protection
If your builder goes bankrupt, fundamentally breaches the purchase agreement, or you exercise a statutory right to rescind, and your deposit is not returned, Tarion covers it up to set limits.
| Home Type | Purchase Price | Maximum Deposit Protection |
|---|---|---|
| Freehold home | $600,000 or less | $60,000 |
| Freehold home | Over $600,000 | 10% of price, up to $100,000 |
| Condominium unit | Any price | Trust protection under the Condominium Act, plus up to $20,000 from Tarion |
These limits apply to purchase agreements signed on or after January 1, 2018. Payments for upgrades and extras count toward deposit protection. Payments made to reserve a home before signing a purchase agreement do not.
New for 2026: for purchase agreements signed on or after April 1, 2026, freehold buyers should register their purchase with Tarion within 45 days of signing. Buyers who register within that window qualify for the maximum deposit coverage. Those who register late or not at all fall under a separate, more limited fund.
Delayed Closing Compensation
If your builder misses the closing or occupancy date without proper notice, you may be entitled to compensation of up to $7,500. This includes $150 per day for living expenses, plus documented costs like moving and storage. You must close the purchase to claim, and you must submit the claim within the first year of possession.
Financial Loss for Contract Homes
If you own the land and hire a builder under contract, and the builder fails to substantially perform, Tarion covers the gap between what you paid and the value of work delivered, up to $40,000.
The 1, 2, and 7 Year Warranty: What Each Period Covers
After you take possession, the warranty splits into three overlapping periods. Each covers different defect types, and the coverage narrows as time passes.
| Warranty Period | What Is Covered |
|---|---|
| Year 1 | Defects in work and materials. Ontario Building Code violations. Unauthorized substitutions. The home is fit for habitation. |
| Years 1-2 | Water penetration through the basement, foundation, or building envelope. Defects in electrical, plumbing, and heating delivery systems. Defects in exterior cladding. Building Code violations affecting health and safety. |
| Years 1-7 | Major structural defects (MSD) that affect load-bearing elements or make the home unsafe or unusable. |
Year 1: The Broadest Coverage You Will Ever Have
The first year covers almost everything the builder got wrong: squeaky floors, poorly fitted doors, cracked tiles, defective trim, missing insulation, and anything that violates the Ontario Building Code. This is the only period that covers general defects in work and materials.
Once year one ends, cosmetic and fit-and-finish items are no longer claimable. This is why the first-year reporting deadlines matter more than any other date in this article.
Years 1 and 2: Systems and Water
The two-year warranty targets the expensive stuff: water getting in through the foundation or building envelope, and failures in how electrical, plumbing, and heating systems are distributed through the home. Exterior cladding defects and health-and-safety code violations also fall here.
Note the wording on systems. The warranty covers the delivery and distribution systems, not the appliances or fixtures attached to them. A defective supply line is covered. The dishwasher connected to it is not.
Years 1 Through 7: Major Structural Defects
The seven-year warranty covers major structural defects. These are failures in load-bearing parts of the home, or defects that materially compromise your ability to use a significant portion of it. Think foundation failure, structural beam problems, or soil movement damaging the structure. The bar is high, but so are the stakes.
Maximum Coverage Limits
Coverage caps depend on when the first purchase agreement for the home or project was signed.
| Coverage Item | APS Signed On or After July 1, 2023 |
|---|---|
| Freehold home | $400,000 |
| Condominium unit | $300,000 |
| Condo common elements | $100,000 per unit, up to $3.5 million per project |
| Environmentally harmful substances | $50,000 |
For agreements signed between February 1, 2021 and June 30, 2023, the freehold and condo unit cap is $300,000. Check your Agreement of Purchase and Sale date before assuming which limits apply.
How the Tarion Claims Process Works?
Tarion overhauled its claims process for homes with a warranty start date on or after May 1, 2024. If your possession date is earlier, you fall under the older 30-Day Form and Year-End Form system. Both are outlined below.
For Warranty Start Dates On or After May 1, 2024
You can add items to your defect list in the MyHome online portal at any time during the first year. MyHome then submits your list automatically at three intervals:
| Form | Auto-Submitted | What to Include |
|---|---|---|
| Initial Form | Day 41 | Everything from your pre-delivery inspection plus defects found after move-in |
| Mid-Year Form | Day 183 | New defects discovered since the Initial Form |
| Year-End Form | Day 365 | All outstanding items. Final chance for one-year warranty coverage. |
This is a significant improvement over the old system. Homeowners no longer lose months of leverage by missing a single 30-day window. But the year-end cutoff is still hard. Items not submitted by day 365 lose one-year coverage.
For Warranty Start Dates Before May 1, 2024
The legacy process applies:
- 30-Day Form: submit within the first 30 days of possession. Only one is accepted.
- Year-End Form: submit during the last 30 days of the first year. Only one is accepted.
- Second-Year Form: submit any time during the second year for two-year warranty items.
- Major Structural Defect Form: submit any time during years one through seven.
What Happens After You Submit?
Your builder gets a repair period, typically 120 days, to fix or resolve warranted items. If the builder does not resolve them, you can request a conciliation. Tarion then inspects the disputed items and issues a written report deciding what is covered. If Tarion rules an item warranted, the builder gets a further 30 days to fix it. If the builder still fails, Tarion resolves the claim directly, which can include paying you or arranging repairs.
Emergency situations follow a faster track. Any water penetration claim is treated as an emergency and can be addressed at any time during the first year.
You may also like to learn How to Climate Proof Your Home? 10 Upgrades for A Climate-Resistant House
What Tarion Does NOT Cover?
This is where most homeowner frustration starts. The warranty covers construction defects. It does not cover ownership.
| Not Covered | Why |
|---|---|
| Normal wear and tear | Maintenance is the homeowner's job |
| Appliances | Covered by manufacturer warranties, not Tarion |
| Damage you or your contractor caused | Warranty covers the builder's work only |
| Materials or work you supplied | Same principle |
| Normal shrinkage and settling | Minor drywall cracks and nail pops within accepted tolerances |
| Secondary damage | A leak is covered; the ruined carpet and personal property are not |
| Damage from poor homeowner maintenance | Grading changes, blocked eaves, ignored caulking |
| Alterations after possession | Renovations void coverage on affected areas |
| Damage from floods, acts of God | Belongs with your home insurance |
Secondary damage deserves emphasis. If water penetration ruins your finished basement furniture, Tarion covers the repair of the defect that let the water in. Your home insurance handles the contents. Homeowners who assume Tarion pays for everything downstream of a defect are routinely disappointed.
The settling exclusion also surprises people. New homes shrink as lumber dries. Hairline drywall cracks and minor nail pops in year one usually fall within Tarion's Construction Performance Guidelines and are not warranted. Larger cracks or recurring problems can be. The guidelines, published on Tarion's site, define the exact tolerances.
5 Mistakes That Cost Ontario Homeowners Their Coverage
- Treating the pre-delivery inspection as a formality. The PDI is your first documented record of deficiencies. Walk every room. Test every window, tap, and outlet. Photograph everything. Items recorded at PDI are much harder for a builder to dispute later.
- Reporting defects verbally. A conversation with the site supervisor is not a claim. Coverage depends on written submissions through MyHome within the deadlines. "We talked about it" has no standing.
- Missing the year-end deadline. Day 365 is the last day for one-year warranty items, which is the broadest coverage tier. Set a reminder for month eleven and do a full walkthrough of the home.
- Letting the builder run out the clock. Builders sometimes promise repairs "next season" until deadlines pass. Submit the form on time regardless of what the builder promises. A submitted claim preserves your rights. An unsubmitted one does not.
- Renovating warranted areas before claims resolve. Finishing a basement over a foundation issue, or replacing builder-installed flooring, can void coverage on those elements.
Buying a Resale Home Under Seven Years Old?
The remaining Tarion warranty transfers with the home. Before closing, ask the seller for the enrolment number and warranty start date, then verify the home in Tarion's Ontario Builder Directory. A home four years into its warranty still carries three years of major structural defect coverage. That has real value, and it costs nothing to transfer.
Tarion Warranty in Ontario: What Every New Homeowner Should Remember?
The Tarion warranty is strong protection, but it is not automatic protection. It rewards homeowners who document defects, submit forms on time, and understand the difference between a construction defect and a maintenance item. Put day 41, day 183, and day 365 in your calendar the week you get your keys. Those three dates decide how much of your coverage you actually get to use.
And for everything Tarion does not cover, from drywall touch-ups and appliance installation to finishing that basement once your claims are settled, you can get free quotes from local professionals on UrbanTasker. Post your task, compare quotes, and hire with confidence.
FAQs
How long does the Tarion warranty last in Ontario?
Seven years from the warranty start date, which is the day you take possession or occupancy. Coverage is tiered: one year for general defects, two years for water penetration and major systems, and seven years for major structural defects.
How much does the Tarion warranty cost the homeowner?
Nothing directly. The builder pays the enrolment fee when the home is registered. In practice, builders factor this cost into the purchase price.
Does Tarion cover appliances?
No. Appliances are covered by their manufacturer warranties. Tarion covers the home's electrical, plumbing, and heating delivery systems, but not the fixtures and appliances connected to them.
Can I claim after the first year?
Yes, but only for items still under coverage. Water penetration, major systems, cladding, and health-and-safety code violations are claimable until year two. Major structural defects are claimable until year seven. General workmanship items expire at the end of year one.
What if my builder refuses to do the repairs?
Submit your warranty form on time, then request a conciliation once the builder's repair period ends. Tarion inspects, decides what is warranted, and gives the builder a final 30 days. If the builder still fails, Tarion resolves the claim directly with you.
Is Tarion the same as home insurance?
No. Tarion covers construction defects by the builder. Home insurance covers events like fire, theft, floods, and damage to your belongings. You need both, and they do not overlap.
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