The Tarion Warranty Corporation is a private corporation which was established in 1976 to protect the rights of new home buyers and regulate new home builders in the Province of Ontario. Tarion administers the Ontario New Home Warranties Plan Act which outlines the warranty protection that new home buyers are entitled to in Ontario.
For a new home builder to start a business in Ontario they must be registered and licenced by the program. To become registered, a builder must complete a process that accesses business and technical skills. Financial history and viability are also thoroughly reviewed. Builders that are undercapitalized may be limited to the number of homes they can build and are required to post security. Once licenced, a builder must operate under strict controls and their licence is subject to annual review for renewal.
The program is funded through enrolment fees which must be paid before each housing unit is started. It is mandatory in Ontario for new home builders to be registered with Tarion Warranty Corporation. The only exception to this requirement is if a homeowner decides to build their own home in which they intend to live. This exception has been misused and the Tarion Warranty Corporation is now working on means to better enforce requirements.
The program offers warranties against major structural failures for seven years and guarantees against defects in workmanship and materials for a minimum of one year with some components covered for 2 years. It also guarantees deposits made by new home buyers. Details can be found at
Before buying a new home confirm that your builder is registered with Tarion. Once the home is under construction ensure that the home has been enrolled. All this information is available on the Tarion website.
Prior to the closing of a new home the builder is required to do a walk-through with the home buyer. This is called the Pre-Delivery Inspection or PDI. Any deficiencies or items not completed are recorded on the Certificate of Completion and Possession. A copy of this Certificate is left with the home buyer, the builder retains a copy and one is sent to Tarion. The warranty is not limited to the items on this list, it just identifies the unfinished work and deficiencies seen at the time of inspection. There is also a 30 Day Form, Year End Form and Second Year Form. There are stipulated periods within which the builder must address the items. If there is a dispute between the builder and the homeowner regarding a particular issue, then Tarion will conduct a conciliation to determine if it is a warranty issue.
The staff at Tarion is trained to assess situations objectively in relation to the legislation under which the coverages are defined. If something is not right Tarion will ensure that the issue is rectified by the builder. If the builder refuses to address an issue deemed a warranty item under the legislation then Tarion will undertake to get the work done. The builder in this case would no longer be registered with Tarion and would be prohibited from building new homes.
The Tarion Warranty Corporation provides security, protection and peace of mind for new home buyers throughout the province. Since its inception enrolment is well in excess of one million homes. In relative terms the cost of enrolment of new homes is very reasonable. For example the premium to enroll a $350,000 home with Tarion is $710 plus HST. When comparing this cost to other insurance costs it represents good value at a reasonable cost.