How Tarion Home Warranties Work in Ontario

Tarion Home Buyer Protection Program Ontario

Most major purchases are covered by some type of warranty or guarantee, but people don’t realize this can also be true when buying a new home. Homeowners in Ontario are often worried that their new investment may not have met lawful standards when it was constructed. However, the Ontario New Home Warranties Plan Act regulates the building of new homes and a private enterprise called the Tarion Warranty Corporation is there to make sure homeowners’ rights are being adhered to.

Construction Licensing
Tarion licenses all of the new condominium and home builders across the province of Ontario. Before receiving a license, the building companies need to show they have the financial stability, technical experience, and customer service capabilities to properly construct homes. Tarion provides homebuyers with an Ontario Builder Directory which can be easily accessed by the public. This directory supplies important information to the public about the province’s home builders such as if they’re licensed, how many homes they’ve constructed, and if any warranty claims concerning the company have been forwarded to Tarion. In addition, the directory lists any builders who been refused a license or had it revoked.

Warranty Options
New homeowners are protected by Tarion via mandatory warranty coverage. The warranty kicks in before a new home has been completed with coverage such as deposit protection as well as delayed closing protection and coverage for financial losses on contract homes. New homeowners are eligible for warranties that last for one, two or seven years. A one year warranty covers violations against the Ontario Building Code along with any defective workmanship and/or materials. The warranty states that the home has to be habitable and it protects the owner from unauthorized substitutions.

The two-year warranty offers protection for things such as building material, heating, electrical and plumbing defects as well as water penetration. Also, any Ontario Building Code health and safety violations are covered during the first two years. When it comes to the seven-year warranty, this covers any major structural defects in the home. It also protects the common, shared elements of condominium buildings such as the elevators and recreation areas.

Online Information
Online information and resources are provided by Tarion to help both builders and homebuyers manage their warranty process. This enables buyers to submit their warranty forms as well as automatically receive emails regarding any upcoming warranty deadlines. In addition, builders can access their online warranty status which also allows them to manage inspections and enroll homes.

Customer Service
As well as administering warranties and licensing building companies, Tarion allows customers to evaluate their builders through its yearly survey on customer satisfaction. This enables Tarion to gather information about the builders and reward the top-rated companies with an award of excellence. Tarion can also use this data to help improve the customer service relationship between the buyer and builder. This can be done by analyzing the survey results and offering advice and service training to builders with lower rankings.

Warranty Claims
According to Tarion, warranty claims have been declining over the past few years. One reason for this is because more and more disputes are being resolved directly between the buyer and the builder. Tarion encourages this by communicating with and educating builders on a regular basis. Also, it benefits the builder to resolve any disputes before Tarion is called in to inspect a home. If a dispute is covered by the warranty, it can be quite costly for the builder, and this is why most issues are resolved directly with the homebuyer. Any conciliation charged to the builder will appear on their permanent record in the Ontario Builder Directory. Builders are also charged if they aren’t properly covering the warranty and this could impact them when they apply for a registration renewal.

Illegal Building
Tarion also focuses on illegal building by companies that aren’t licensed or don’t enroll their homes with the warranty. Tarion has asked the government to make it more difficult for building companies to avoid offering warranties. Vendors and builders in the province of Ontario can be fined up to $100,000 if they don’t enroll or register a new home as required by law. They also face a year in jail.

For more information on Tarion, please visit their website at or feel free to contact our friendly team of mortgage professionals at for more information.

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