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Summary: The Tarion warranty is Ontario's mandatory protection for newly built homes, set out in the Ontario New Home Warranties Plan Act. It covers a new freehold home or condominium bought from a licensed builder for up to seven years, plus deposit protection and compensation if your closing is delayed.
What is the Tarion warranty?
Every newly built home in Ontario must come with this warranty, backed by your builder to protect you as the first owner. It is administered by Tarion, a non-profit corporation, under the Ontario New Home Warranties Plan Act.
Two things have to be true for the warranty to apply: the home must be newly built (resale homes are not covered), and it must be sold by a builder who is licensed to build and sell in Ontario. Since February 1, 2021, that licensing is handled by the Home Construction Regulatory Authority (HCRA), while Tarion administers the warranty itself and pays valid claims.
Covered by Tarion | Not covered |
A new freehold home from a licensed builder | A resale (previously owned) home |
A new condominium unit from a licensed builder | A home you build yourself as an owner-builder |
Deposits, delays, and defects on a qualifying new home | Normal wear and tear, or damage you cause after closing |
What does the Tarion warranty cover?
Coverage is layered over three periods, each protecting against different problems as they tend to surface. All three start on the day you take possession.
One year | Two years | Seven years |
Home is fit to live in, built to the Ontario Building Code, and free of defects in work and materials | Water penetration through the building envelope or foundation; defects in the electrical, plumbing, and heating delivery systems; defects in exterior cladding | Major structural defects — failures in load-bearing elements, or defects serious enough to materially affect your use of the home |
No unauthorized substitutions from what you were promised | Building Code violations that affect health and safety |
The one-year warranty is the broadest and catches the everyday defects that show up first. The seven-year warranty is the narrowest: it is reserved for genuine structural failure, not cosmetic settling cracks.
What does Tarion protect before you move in?
Before possession, the warranty protects your money and your timeline, not just the finished home. Two protections matter most:
Deposit protection. If your builder goes under or your purchase falls through, Tarion protects your deposit. For a new condominium, coverage is up to $20,000, including money put toward upgrades. For a freehold home, coverage is up to $60,000 when the price is $600,000 or less, or 10% of the price up to a maximum of $100,000 when it is more.
Delayed-closing and delayed-occupancy compensation. If your builder misses the agreed closing or occupancy date and the delay is not handled properly, you may be owed compensation for added living, moving, and storage costs (with receipts). If the builder fails to give the required 10 days' notice of a delay, the set compensation is $1,500 ($150 per day for 10 days).
How do you make a Tarion warranty claim?
You report defects to your builder using Tarion's standard forms within set windows, and Tarion steps in if the builder does not resolve a valid item. The process runs through Tarion's online portal.
Do your pre-delivery inspection. Before you take possession, walk through the home with the builder and record every deficiency on the Pre-Delivery Inspection form.
Submit your Initial Form. From your possession date through about day 41, list any warranted items in your MyHome account.
Use the Year-End Form before your first anniversary. From the mid-point of your first year up to day 365, submit anything that has appeared since.
File two-year and major-structural claims within their periods. Report water, systems, cladding, or structural issues within the relevant warranty window.
Ask Tarion to step in. If the builder does not repair a valid item in the allotted time, Tarion assesses the claim and can resolve it directly.
What changed for 2026?
As of April 1, 2026, buyers of newly built freehold homes must register their purchase with Tarion within 45 days of signing the agreement of purchase and sale. Registering on time keeps your full statutory deposit protection. Buyers who register late may have their deposit coverage paid from a separate, capped industry fund rather than the standard protection, which can mean a reduced or delayed payout. Tarion is phasing this in: the 45-day registration applies from April 1, 2026, but the changes to deposit coverage are deferred until January 1, 2027. Your real estate lawyer confirms this registration is done as part of your closing.
Frequently asked questions
Does Tarion cover a resale home?
No. The Tarion warranty applies only to newly built homes and condominiums bought from a licensed Ontario builder. A previously owned home is not covered, which is one reason buyers of resale homes rely on title insurance and a careful title search instead.
How much does the Tarion warranty cost the buyer?
There is no separate Tarion premium you pay directly. The builder pays an enrolment fee to register the home, and that cost is built into the purchase price. Your protection comes automatically with a qualifying new home.
How long does Tarion coverage last?
Up to seven years from your possession date. The one-year and two-year warranties cover defects and systems, and the seven-year warranty covers major structural defects.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law. We pair a simple digital platform with an in-house team of licensed Ontario lawyers, and we help buyers close purchases, including new-build and pre-construction homes, along with refinances, sales, and status certificate reviews. You can start your closing online or get in touch with any questions.
Legal references: Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31; New Home Construction Licensing Act, 2017, S.O. 2017, c. 33, Sched. 1 (Home Construction Regulatory Authority). Administered by the Tarion Warranty Corporation.
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
