Understanding Tarion and Ontario’s New Home Warranty Program

Buying a pre-construction condo in Long Branch or a freshly built freehold in Milton should feel exciting, not risky. Ontario’s new home warranty framework—administered by Tarion, with licensing oversight from the Home Construction Regulatory Authority (HCRA)—exists to protect you from defects, deposit issues, and improper delays. If you are shopping anywhere across the Greater Toronto Area (GTA), this guide breaks down who does what, what is covered, when to file forms, and how deposit and delay protections actually work.

Tarion vs. HCRA: Who Does What?

HCRA regulates and licenses the people and companies who build and sell new homes in Ontario. Think of it as the professional standards body for builders and vendors, including the Ontario Builder Directory. Tarion administers the warranty itself and backstops a builder’s obligations to you. If a licensed builder does not resolve an eligible issue, you can make a claim to Tarion, which will assess and, if warranted, ensure resolution.

What the Ontario New Home Warranty Covers (1-, 2-, and 7-Year)

1-Year Coverage (Day 1 to Day 365)

• Workmanship and materials defects
  
  

• Habitability and Ontario Building Code compliance
  
  

• Unauthorised substitutions
  
  

This period starts on your possession date.

2-Year Coverage (Year 1 to Year 2)

• Water penetration through the building envelope, basement, or foundation
  
  

• Defects in electrical, plumbing, and heating delivery or distribution systems
  
  

• Exterior cladding issues, such as brick or siding
  
  

• Certain Building Code health and safety violations
  
  

7-Year Coverage (Years 3 to 7): Major Structural Defects (MSD)

Covers serious structural failures or defects that affect a load-bearing function or the home’s use. Examples include significant damage due to soil movement, major basement wall cracking, and serious distortion of the roof structure.

Coverage Limits: How Much Protection Do You Have?

The maximum protection depends on when the first Agreement of Purchase and Sale (APS) for the project was signed. For recent projects, typical limits include:

• Freehold homes up to a defined maximum per home
  
  

• Condo units up to a defined maximum per unit
  
  

• Condo common elements with a per-unit calculation, and an overall cap
  
  

• Additional coverage for certain environmental hazardous substances
  
  

Always confirm your project’s specific limits based on its first APS date.

Before You Move In: Deposit and Delay Protections

Deposit Protection (Freehold vs. Condo)

• Freehold homes: Deposits are protected up to a set amount for homes at or below a price threshold, or a percentage of the purchase price up to a cap for higher-priced homes.
  
  

• Condo units: Deposits are typically held in trust under the Condominium Act. If a builder terminates the agreement, deposits must be returned within a defined period, and Tarion provides an additional backstop within its limits if a vendor fails to return funds.
  
  

Delayed Closing or Occupancy Compensation

If your closing or occupancy occurs after the firm date, and no valid exception applies, you may claim compensation up to a maximum amount. A daily allowance is available for living expenses without receipts, and eligible moving or storage costs can be claimed with receipts. This applies to both freehold closings and condo occupancies.

The Pre-Delivery Inspection (PDI): Your First Line of Defence

Before you receive keys, your builder must conduct a Pre-Delivery Inspection (PDI). Walk through the home, test systems, and note anything damaged, missing, incomplete, inaccessible, or not operating on the official PDI Form. Use a thorough checklist. It documents conditions before occupancy, which is invaluable later.

Pro tip for GTA buyers: Bring blue painter’s tape and your phone. Record serial numbers of mechanicals, photograph finishes, and flag anything you cannot reasonably test on the day, such as air-conditioning in winter. Make sure it is recorded on the PDI.

After You Move In: Forms, Timelines, and How to Get Things Fixed

Register and Track in MyHome

Create a MyHome account, register your purchase, and track deadlines. You submit warranty forms through MyHome.

Customer Service Standard (CSS) Submission Windows

For homes with a possession date on or after recent guideline changes, expect:

• An Initial submission window of approximately 40 days
  
  

• A Mid-Year submission window around the six-month mark
  
  

• A Year-End submission window during the last 30 days of the first year
  
  

Each submission triggers a builder repair period. If issues remain unresolved, you can request Tarion conciliation. You can still file Second-Year forms for items covered by the two-year warranty, and an MSD form any time within the seven-year window. Conciliation request windows apply, so diarise your dates carefully.

Freehold vs. Condo: What’s Different?

• Freehold homes (including contract builds on your own land): The same 1-, 2-, and 7-year structure applies, alongside deposit and delay protections.
  
  

• Condo units: Your unit has its own 1-, 2-, and 7-year coverage. The condo corporation makes separate claims for common elements—lobbies, roofs, garages, mechanical rooms—via a performance audit and corporation-level processes. Coverage limits differ for common elements.

What’s Not Covered?

Tarion publishes exclusions and Construction Performance Guidelines that clarify standards, acceptable tolerances, homeowner maintenance responsibilities, and when defects fall within warranty. Seasonal conditions, normal wear and tear, improper maintenance, or damage from third parties may be excluded. Your expectations, and your builder’s obligations, are grounded in these definitions.

Frequently Asked Questions (GTA Focus)

Is a builder’s warranty the same as Tarion’s warranty?

The warranty is provided by the builder, and administered or backstopped by Tarion. If the builder does not resolve an eligible item within timelines, you can escalate to Tarion for conciliation.

How much can I claim if my closing or occupancy is improperly delayed?

There is a capped total you may claim, which includes a daily allowance for living expenses without receipts, and eligible moving or storage costs with receipts.

How big is my deposit protection on a freehold home?

Protection is either a fixed maximum for homes at or below a threshold price, or a percentage of the purchase price up to a cap for higher-priced homes.

What about condo deposits?

They are typically held in trust under the Condominium Act. If a builder terminates, deposits must be returned within a defined period, with Tarion providing an additional backstop where applicable.

What are today’s maximum coverage limits?

Recent projects have higher limits for freehold homes, condo units, and condo common elements, including a per-unit calculation and overall caps. Always verify the limits tied to your project’s first APS date.

The Bottom Line for GTA Buyers and Homeowners

Ontario’s system separates regulation and licensing (HCRA) from warranty administration (Tarion). Your coverage runs in well-defined windows—one year for workmanship and materials, two years for building envelopes and systems, and seven years for major structural defects—with clear deposit and delay safeguards, plus updated coverage limits on newer projects. If you register in MyHome, diarise each form deadline, and use the PDI form diligently, you will make the most of these protections.

Whether you are eyeing a pre-construction condo near Kipling Station, or a newly built freehold in Milton, partner with a team that knows the market, regulations, and timelines inside and out. The Johnson Team is one of the GTA’s top-performing real estate teams, led by Jeff and Liz Johnson. We combine deep neighbourhood knowledge, savvy negotiation, and creative marketing to help buyers and sellers move with confidence, while we stay on top of warranty rules, builder standards, and closing requirements, so you do not have to. If you are ready to start house hunting, or to list for maximum value, contact us today to start working with an agent right away.