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    The Open Door Blog


Whether you own a new home or condo, are considering buying one, or just love to dream about it, the Open Door blog is here to share stories that can help you protect what is likely the biggest investment of your life.

The Open Door blog is published by Tarion, a non-profit corporation that administers Ontario’s New Home Warranty Plan and registers all new home builders in Ontario. Click here to learn more about us.


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A bigger safety net for new home buyers
November 28, 2017
Watch Over

You’ve scrimped and saved – even cutting back on your daily coffee habit – to be able to put away enough for a newly built home. This hard-earned money is precious to you and now you have to entrust it to a builder who has promised to deliver your dream home. You’ve done your part by putting down your deposit, but what if the builder does not fulfill their part of the bargain? Maybe the builder goes bankrupt or maybe the closing date keeps pushing back to well past when they promised final delivery. In the end, you have no home and the builder can’t or won’t give your deposit back. That’s where Tarion’s deposit protection can help.

Deposit protection in a changing market

Currently, under the Ontario New Home Warranties Plan Act, new home buyers of non-condominium freehold homes are eligible for a maximum of $40,000 in deposit protection. This means that if your contract is terminated through no fault of your own, the builder or vendor must return all of your deposit. If this doesn’t happen, you can make a claim to Tarion. Now you might be saying, “but I put more than $40,000 down, why can I only get $40,000 back?” Tarion’s current deposit protection levels have been in place since 2003 and we can all agree that the housing market has changed a lot since then. As housing prices have risen, so have the amounts required for deposits. The good news is that we are proposing to increase coverage for non-condominium freehold homes from the current $40,000 to 10 per cent of the purchase price up to a maximum coverage of $100,000, with a minimum coverage of $60,000. In other words, if you paid $600,000 for your home or less, you are eligible to receive up to $60,000; if your home was more than $600,000, you are eligible to receive 10% of the purchase price, to a maximum of $100,000. 

If you’re in the market for a newly built home, you’ll be happy to hear that the new deposit protection levels for non-condominium freehold homes are anticipated to be in place in January 2018.

Coverage for condominiums

But what if you put a deposit down on a condominium? In this case, your full deposit is legally required to be placed in trust. This means that the developer’s lawyer or a trustee is required to hold such funds and is obliged to return them to you in full if the purchase agreement is terminated. If for some reason these funds are released improperly from the trust, Tarion will cover up to $20,000. Since condo buyers have this added level of protection, we are not proposing to change this policy at this time.

An anticipated increase

If you’re in the market for a newly built home, you’ll be happy to hear that the new deposit protection levels for non-condominium freehold homes are anticipated to be in place in January 2018. And there’s still more good news, the Minister of Government and Consumer Services has introduced Bill 166, the Strengthening Protection for Ontario Consumers Act, 2017 which if passed, would extend deposit protection to include other payments such as those made for upgrades and extras (like those granite countertops you just couldn’t live without). The details about the new deposit protection levels are posted our website at www.tarion.com. You are welcome to offer your comments on the proposal and we hope you will.

The goal of this blog is to provide you with general information about the warranty process by sharing real experiences from new homeowners. The blog should not be relied upon as legal advice. For privacy reasons, we will not address or resolve current cases in a public forum, so any comments or questions that are posted on this site that describe individual cases cannot be discussed. If you have a question about your warranty or Tarion generally, we would be pleased to discuss your issue, in the context of your particular circumstances and in confidence. We exercise reasonable care to avoid offensive, illegal or defamatory content from being posted, as well as comments that are intended solely for self-promotion or considered to be spam.