If you sign a purchase agreement for a new home or condominium and you pay a deposit to your builder, Tarion protects your deposit in the event that the sale is not completed due to any of the following:
- your builder goes bankrupt;
- your builder fundamentally breaches the purchase agreement; or
- you are otherwise legally entitled to rescind the agreement before closing.
Before treating your purchase agreement as terminated, and to ensure that your deposit claim will be covered by Tarion, you should consult a lawyer.
Deposits paid for condominium units are protected up to a maximum of $20,000 with any excess deposit amounts being protected by the trust provisions of the Condominium Act.
Deposits paid for all other new homes are protected up to a maximum of $40,000, if the purchase agreement was signed on or after February 1, 2003. Purchasers who signed purchase agreements before February 1, 2003 are protected up to a maximum of $20,000.
You should be aware that payments made for upgrades and extras may not be protected by Tarion. For example, many purchase agreements expressly state that payments for upgrades and extras will not be refunded under any circumstance.
In addition, Tarion does not protect any payments you make to reserve or hold a home or a condominium unit before you sign a purchase agreement. Tarion recommends you do not pay a builder a large sum of money to "hold" a home for you. However, if you do make a payment, ask that the money be held in trust and ensure you get a receipt.
Making a Claim for Deposit Refund
- Mail or fax your claim in writing to the Tarion corporate office, along with a copy of the first page of your Agreement of Purchase and Sale.
- Once Tarion has received your information, you will be sent a deposit claim form.
- You will then be required to provide a copy of your cancelled deposit cheque.