Buyers in Ontario must now register their purchase with Tarion within 45 days
Tarion, the organization responsible for administering Ontario’s new home warranty program, has made regulatory changes to address the important issue of illegal building and selling of new homes in the province.
The illegal building and selling of new homes is a serious problem that can have devastating consequences for consumers. Unlike other jurisdictions, in Ontario a homebuyer qualifies for deposit coverage even if the builder is not legal.
Recently, Ontario has seen several high-profile cases where unlicensed actors took deposits on illegally sold homes and left would-be buyers facing serious financial losses in the neighbourhood of $100 million.
Now, homebuyers must register their agreements within 45 days of signing to be entitled to the maximum amount of deposit coverage provided by the warranty program.
“Illegal building is a serious problem where a few bad actors cast a shadow over an entire industry,” said Peter Balasubramanian, Tarion’s President and Chief Executive Officer. “With purchase registration, we will be able to verify whether a builder is approved to sell and work with the Home Construction Regulatory Authority to shut down illegal activity.”
This new measure gives Tarion earlier visibility into new home sales and allows Tarion to verify in real-time that the builder is licensed and legally permitted to sell homes. If they aren't, Tarion can immediately alert the Home Construction Regulatory Authority (HCRA) and intervene with that illegal builder right away.
What you need to know
After a homebuyer signs an Agreement of Purchase and Sale, they must notify Tarion within 45 days by registering. This can be done entirely online and only takes a minute or two.
Homebuyers can use the Home ID found on the Warranty Information Sheet attached to their Agreement of Purchase and Sale to register or simply fill out some key pieces of information such as their name, their builder, and their email. Once registration is complete, they will receive important information from Tarion about their builder warranty.
Starting January 1, 2027, buyers who do not register within 45 days of signing, or who do not register at all, will qualify for a different and potentially lower amount of coverage limited by a special fund with an annual cap.
The registration can be done by the homebuyer, but it can also be completed by the seller, the buyer’s real estate agent, or real estate lawyer.
If you are advising homebuyers in respect of the purchase of new freehold home, you should inform them about the Tarion deposit coverage and the requirement to sign up to the program by registering within 45 days.
No change for condo buyers or post-possession coverage
These changes only affect freehold homebuyers in Ontario, since deposit protection is structured differently for new condominiums, new condo unit buyers do not need to notify Tarion about their purchase.
All new homeowners will continue to have the same construction coverage for potential issues with their home under the builder’s warranty for seven years after they take possession whether they register or not. This new program only impacts the process for the freehold deposit warranty.
How you can help
Real estate lawyers are the experts that new home buyers rely on to walk them through the legal language of their purchase agreement so they are aware of what is included and all the key details regarding timing, circumstances under which a builder can delay or cancel the agreement and their rights regarding termination.
“This new step is designed to be quick, easy and have a widespread positive impact on the new home ecosystem,” said Peter Balasubramanian, president and CEO of Tarion. “Helping your clients complete this step right away can make all the difference in ensuring they’re protected while ensuring any illegal activity is quickly identified.”
Tarion encourages lawyers to guide clients through the registration process, help with the registration itself, or complete it on their behalf.
Key Dates – Ontario Regulation 892
April 1, 2026: Purchaser Registration Requirement for new freehold homes began:
- The purchaser must notify Tarion of the Agreement of Purchase and Sale within 45 days of signing, including some basic information. (Regulation 892, section 2.1(2))
- The new requirement applies to freehold homes (not condominiums or contract homes) for agreements entered on or after April 1, 2026. (section 2.1(1))
January 1, 2027: New Deposit Protection Limits Apply
- If the purchaser complies with registration requirements, the purchaser remains eligible for full deposit protection under the Guarantee Fund. Maximum compensation is the greater of $60,000 or 10% of the purchase price (capped at $100,000) (Regulation 892, section 6.1(2))
- If the purchaser does not comply with registration: the claim will be treated as a “special fund claim” (definition; sections 4.9 and 6.1(3)). Compensation is paid from a single annual fund of $15 million (section 8(2)). Eligible claims in a year are:
- Calculated together after year‑end (section 4.9(2))
- Reduced proportionally if they exceed $15 million (section 4.9(4))
- Payment is made in the year following the claim (section 8(3))
Start educating clients now
Although the coverage change does not come into effect until January 1, this transition period is an opportunity to become familiar with the new rules and give clients advance notice about the upcoming change.
More details, including consumer-friendly resources, are available at Tarion.com/NewHomeRegistration.
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