Introduction
The Tarion Warranty Corporation administers new home warranties in Ontario on behalf of buyers of new homes and establishes legal obligations for builders and vendors under the Ontario New Home Warranties Plan Act. Compliance is mandatory — failure to comply with the Act and Tarion rules can result in regulatory penalties, licence suspension, loss of warranty eligibility, homeowner claims, and litigation. Builders and vendors operating in Ontario must understand their duties, deadlines, and risk exposure. This article provides a basic summary of what builders need to know.
1. What is the Tarion Warranty Program?
The Tarion Warranty Corporation administers Ontario’s new home warranty protections for buyers of new homes, covering defects, deposits, delayed closing compensation and major structural issues.
Official resource:
https://www.tarion.com/homeowners/the-new-home-warranty
In 2021, the Home Construction Regulatory Authority (HCRA) was introduced to regulate builder licensing and compliance:
https://www.hcraontario.ca/
2. Licensing Requirements
Before offering, selling or building a new home in Ontario, a builder/vendor must:
Be licensed by the Home Construction Regulatory Authority (HCRA)
https://www.hcraontario.ca/licensing/and apply to Tarion to enroll each new home
https://www.tarion.com/builder
New Homes cannot be sold or constructed until enrolment is approved.
3. Key Builder Obligations
a) Enrolment & Documentation
Tarion requires builders to submit enrolment documents, including the purchaser's contact information, within 30 days of signing. Required documentation includes:
Tarion Addendum
Warranty Information Sheet
Certificate of Completion and Possession (CCP)
b) Pre-Delivery Inspection (PDI)
A Pre-Delivery Inspection is mandatory before possession and establishes the baseline home condition.
More information:
https://www.tarion.com/homeowners/pre-delivery-inspections
c) Warranty Coverage
Time Period | Warranty Coverage |
|---|---|
1-Year | Workmanship & materials |
2-Year | Electrical, plumbing, heating systems, and water penetration |
7-Year | Major structural defects |
Coverage details:
https://www.tarion.com/homeowners/warranty-coverage-overview
4. Common Builder Risks & Pitfalls
Risk | Consequence |
|---|---|
Failure to enroll a home | Liability for full repair costs + enforcement penalties |
Missed deadlines (PDI, claims response, delayed closing rules) | Compensation exposure + Tarion intervention |
Poor documentation | Legal vulnerability in disputes |
Misleading marketing or contract terms | Legal action for misrepresentation |
5. Regulatory Changes to Watch
Upcoming requirement: Purchaser Notice to Tarion
Effective July 1, 2025, purchasers of new freehold homes, including homes on parcels of tied land, are required to notify Tarion of their purchase and particulars of the transaction within 45 days of signing an agreement of purchase and sale.
6. Role of Legal Counsel
A law firm supporting Ontario home builders should provide:
APS and construction contract drafting and review
Tarion compliance audits
Warranty claim dispute support
Regulatory change updates
Risk-management systems and internal documentation controls
Proper legal advice reduces costly warranty claims and protects the builder's reputation.
Conclusion
The Ontario Tarion Warranty Program is a homebuyer protection tool that includes a strict legal compliance system. Builders must understand their obligations, maintain accurate documentation, communicate transparently with purchasers, and respond to claims efficiently.
Legal counsel with Tarion experience can assist in preventing regulatory penalties, litigation, and financial loss.
Please note these materials have been prepared for general information purposes only and do not constitute legal advice. Readers are advised to seek legal advice by contacting Frank Feldman regarding any specific legal issues.
All content is provided for general information purposes only and does not constitute legal advice. No communication shall result in a retain of Frank Feldman Law unless confirmed in writing.