What Is Tarion Warranty? Ontario New Construction Guide

What Tarion warranty actually covers for Ontario new construction buyers, what it doesn't, and how it compares to other protection products like home seller closing insurance.

Tarion is the warranty program that protects buyers of new construction homes in Ontario. Coverage is mandatory for all new homes built by registered builders in the province and is automatically in place from the day the buyer takes possession. The warranty covers deposit protection, materials and workmanship, major structural defects, and certain other categories of defects on a defined timeline.

If you're buying new construction in Ontario, Tarion is part of the package. Most buyers don't pay much attention to it until something goes wrong, which is exactly when they wish they had. We see new construction buyers regularly assume Tarion covers things it doesn't, or assume it doesn't cover things it actually does. Here's a clear picture of what the warranty does and doesn't do, and where other products like home seller closing insurance fit alongside it.

What Tarion Actually Covers

Tarion warranty coverage is structured in three main areas, each with its own timeline.

One-year warranty. Covers materials and workmanship defects. This includes things like cracked tile, drywall imperfections, doors that don't close properly, paint issues, and other non-structural defects that show up in the first year of occupancy.

Two-year warranty. Covers water penetration through the building envelope, defects in load-bearing walls, defects in electrical, plumbing, and heating systems, and violations of the Ontario Building Code that affect health and safety.

Seven-year warranty. Covers major structural defects that materially affect the use of the home, such as foundation problems, structural framing failures, or other significant defects that compromise habitability.

Beyond defect coverage, Tarion also provides deposit protection. New construction buyers in Ontario are protected if their builder goes bankrupt or fails to deliver the home. Coverage limits vary based on the type of home (freehold, condominium, contract home) and the year the home was registered.

What Tarion Does Not Cover

This is where most new construction buyers get caught off guard. Tarion warranty has significant exclusions.

Damage caused by the homeowner. Anything that breaks because of normal use, accidents, or improper maintenance is not covered.

Normal wear and tear. The warranty addresses defects, not the gradual deterioration of materials over time.

Items not built by the registered builder. Add-ons, modifications, or work done by other contractors after closing are not covered.

Cosmetic issues after the warranty period expires. Once the one-year materials and workmanship warranty ends, defects in this category are no longer covered.

Pre-closing financial risk. Tarion protects deposits if the builder fails to deliver, but it does not cover the buyer's other transaction costs (legal fees, inspection costs, temporary housing) if a new construction purchase falls apart for reasons other than builder bankruptcy.

This last point is where the gap shows up. Tarion is post-occupancy protection plus deposit protection. It is not pre-closing transaction insurance.

How Tarion Differs From Other Protection Products

New construction buyers in Ontario sometimes confuse Tarion with title insurance, home insurance, and home seller closing insurance. They serve different purposes.

Tarion warranty: Covers defects in new construction homes, plus deposit protection if the builder fails. Mandatory in Ontario, included in the price of every new build by a registered builder.

Title insurance: Protects the buyer against defects in the property's title (liens, encroachments, fraud, ownership disputes) discovered after closing. Optional but commonly purchased.

Home insurance: Covers the homeowner's property and liability after taking ownership. Required by mortgage lenders.

Home seller closing insurance: Covers the financial gap between offer acceptance and closing day when a transaction fails to complete. Optional, purchased by the seller or buyer depending on which party wants protection.

These products complement each other. None replaces another. A new construction buyer in Ontario typically benefits from Tarion (automatic), title insurance (recommended), home insurance (required), and home seller closing insurance (optional, for transaction risk).

When Closing Insurance Matters for New Construction

Tarion's deposit protection covers buyers if the builder goes bankrupt. It does not cover buyers if their own financing falls through, if the buyer can't close for personal reasons, or if other transaction-side issues prevent closing on a new construction home.

These scenarios happen. New construction projects often have closing dates set 12 to 36 months in advance. A lot can change in a buyer's financial situation in that window. Mortgage rates can rise. Employment can change. Other life events can affect the buyer's ability to close. None of those scenarios are covered by Tarion.

Home seller closing insurance from SecureMyOffer covers this gap. Coverage is up to $250,000, with a 50 percent emergency advance available within days of a covered claim. The product must be purchased within 10 days of the firm offer and at least 14 days before closing.

For new construction, this means the policy is purchased near the original offer acceptance, well before the actual closing date many months later, providing protection through the long pre-closing window. For more on how deposits work when a deal collapses, see what happens to your deposit if a deal falls through.

How to File a Tarion Claim

If you discover a defect in your Ontario new construction home, the claim process is straightforward but time-sensitive.

Document the issue. Photographs, dates, and written descriptions of when the problem appeared.

Submit a Statutory Form to Tarion. Tarion requires defects to be reported within specific timeframes (30 days from possession for the 30-day form, year-end for the year-end form). Missing these deadlines can affect coverage.

Allow the builder time to repair. The builder has the first opportunity to address the defect. Tarion steps in if the builder fails to act.

Tarion arbitration. If the dispute escalates, Tarion can arbitrate between the homeowner and builder.

The Home Construction Regulatory Authority (HCRA) regulates builders in Ontario and works alongside Tarion to enforce builder accountability.

Frequently Asked Questions

Is Tarion warranty mandatory for all new homes in Ontario?

Tarion warranty coverage is mandatory for all new homes built by registered builders and vendors in Ontario. The warranty is automatically in place from the date of possession. Buyers do not need to opt in or pay for the warranty separately; the cost is built into the home price. Homes built without registered builders, or as owner-built projects, may not have this coverage.

How much deposit protection does Tarion provide?

Tarion deposit protection limits depend on the type of home and the year of enrollment. As of 2026, freehold home deposit protection is up to $100,000, and condominium deposit protection is up to $20,000 per unit, with additional protection available on certain projects. These limits apply to deposits paid to the builder before closing. Buyers should confirm current limits with Tarion directly when purchasing.

Does Tarion cover resale homes?

Tarion warranty does not cover resale homes. Coverage applies only to the original purchaser of a new construction home, and certain components of the warranty may transfer to subsequent owners during the warranty period. Buyers purchasing resale homes need different protection products, including title insurance and home seller closing insurance, because Tarion does not extend to existing-home transactions.

Tarion Is One Layer of Protection. It's Not the Only One.

New construction buyers in Ontario benefit from Tarion warranty automatically. That coverage is real and meaningful, but it has clear limits. Title insurance, home insurance, and home seller closing insurance address the gaps Tarion doesn't cover. Understanding what each product does, and where each one stops, is what lets you build a complete protection plan for your new construction purchase.

Visit SecureMyOffer.com to see how closing insurance complements Tarion coverage on Canadian new construction purchases.