If you sign an Agreement of Purchase and Sale for a new home or condominium and give your builder a deposit, Tarion protects those funds up to certain limits in the event that:
- 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 by Tarion up to a maximum of $20,000 and any deposit amounts are protected by the trust provisions of the Condominium Act. Deposits paid for all other new homes are protected by Tarion up to a maximum of $40,000,
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 payment you make to reserve or hold a home or a condominium unit before you sign a purchase agreement. If you do make such a payment, ask the builder to hold the money in trust and ensure you get a receipt.
Making a Claim for Deposit Protection
Send your claim, along with a copy of the first page of the Agreement of Purchase and Sale, to:
Tarion Warranty Corporation
Warranty Services Department
5160 Yonge Street, 7th Floor
Once Tarion has received your information, you will be sent a deposit claim form.
You will be asked to provide a copy of your cancelled deposit cheque and possibly other