What are Bankruptcies, Insolvencies and Receiverships
New home builders may encounter financial difficulties that prevent them from completing new home construction projects and/or fulfilling their warranty obligations to owners.
Insolvency describes a company that is experiencing financial challenges and cannot repay its debts. Bankruptcy and receivership are two different legal processes that address a company’s insolvency. In some cases, an insolvent company may be involved in both bankruptcy and receivership proceedings at the same time.
When it comes to builders, it is difficult to predict what the outcome of a bankruptcy or receivership process will be. The builder may or may not be able to continue their operations (e.g., completing a new home you purchased, or continuing to service warranties for a home you have already moved into).
If an insolvent builder is unable to continue its operations and meet its obligations to purchasers/owners of new homes, consumers can have confidence that the pre-possession and post-possession warranties will be backstopped by Tarion.
Below you can find more information about some of the insolvency situations that Tarion is monitoring. Please note that this may not be a complete list of current issues. If your builder/project is listed below, you can contact our Underwriting team by email: firstname.lastname@example.org or by phone: (1-877-982-7466 Ext. 3001) for further assistance.
If your builder has been affected by bankruptcy, insolvency, or receivership and is not listed below, we recommend that you obtain independent legal advice from your real estate lawyer.