If you sign an purchase agreement for a new home or condominium unit and give your builder a deposit, Tarion protects those funds up to a certain limit in the event that the sale is not completed because:
- your builder goes bankrupt;
- your builder fundamentally breaches the purchase agreement; or
- you have a statutory right to treat the purchase agreement as terminated.
Deposit Protection for Freehold Homes
If you signed your purchase agreement before January 1, 2018, your deposit is protected by Tarion up to a maximum of $40,000.
If you signed on or after January 1, 2018, your deposit coverage depends on the purchase price of your new home. Please refer to the table below:
|Sale Price||Deposit Coverage|
|$600,000 or less||Up to $60,000|
|Over $600,000||10% of purchase price
(to a maximum of $100,000)
Deposit Protection for Condominium Units
Condominium unit deposits must be placed in trust under the provisions of the Condominium Act. If your purchase agreement is terminated by the builder, your deposit must be returned to you in full within 10 days. If your deposit is not returned, Tarion provides deposit protection of up to $20,000.
Important Tip: Before treating your purchase agreement as terminated, and to ensure that your deposit claim will be covered by Tarion, you should consult a lawyer.
Making a Claim for Deposit Protection
1. Contact Tarion at 1-877-982-7466 and we will send you a Deposit Refund Claim Form.
2. Send your completed Deposit Refund Claim Form to:
Tarion Warranty Corporation Warranty Services Department 5160 Yonge Street,
Toronto, ON M2N 6L9
3. You will be asked to provide a copy of your purchase agreement, cancelled deposit cheque(s), and possibly other relevant documentation.
4. All information and documentation you submit to Tarion will be provided to your builder and your builder will be given an opportunity to respond.
5. Depending on the information, documents, and responses provided by you and your builder, it may take up to six months for Tarion to assess and resolve your claim. If your claim is disputed or complex, it may take longer to assess.
Frequently Asked Questions
If I put down a deposit on a home, how does Tarion protect my money?
If you sign a purchase agreement for a new home and give your builder a deposit, you will have those funds protected by Tarion - up to certain limits - in the event that:
- The builder goes bankrupt;
- The builder fundamentally breaches the purchase agreement; or
- You have a statutory right to treat the purchase agreement as terminated.
What if I’m buying a $400,000 house? How much of my deposit will be protected?
The minimum coverage for non-condominium freehold homes purchased on or after January 1, 2018 is $60,000. This means that homes with a purchase price below $600,000 will have up to $60,000 in coverage.
When buying a $650,000 home, how much of my deposit will be protected?
Non-condominium freehold homes priced over $600,000 are covered for up to 10% of purchase price - to a maximum of $100,000. In this case, you may be covered up to $65,000.
What about the extra money I’ve spent on upgrades - will that be covered?
Yes - deposit protection has been extended to include other payments made to your builder, such as those made for upgrades and extras.
What payments are not covered?
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.
If you have any other questions, please send us an email at email@example.com.