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 have a statutory right to treat the purchase agreement as terminated.
Before treating your purchase agreement as terminated, and to ensure that your deposit claim will be covered by Tarion, you should consult a lawyer.
Deposit Coverage for Freehold Homes
If you signed your agreement of purchase and sale before January 1, 2018, your deposit is protected by Tarion up to a maximum of $40,000.
If you signed your agreement of purchase and sale on or after January 1, 2018, your deposit coverage depends on the sale 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 Coverage for Condominium Units
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.
Coverage for Other Payments
In January 2018, deposit protection was expanded to include other payments, such as those made for upgrades or extras. This coverage applies to buyers of freehold homes and condominium units.
Payments 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.
Making a Claim for Deposit Protection
1. 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,
Toronto, ON M2N 6L9
2. Once Tarion has received your information, you will be sent a deposit claim form.
3. You will be asked to provide a copy of your cancelled deposit cheque and possibly other