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What is Tarion?

What is Tarion? | Fox Marin Blog

Tarion: If You’re Thinking About Buying Pre-Construction, You Need to Know About It

Formerly known as the Ontario New Home Warranty Program, Tarion is a private corporation that oversees and regulates the new home industry. It is the governing body that licenses all new home builders in Ontario, under the Ontario New Home Warranties Plan ActSpecifically, its mandate is to protect the rights of new home purchasers.

To serve new home buyers and owners, the corporation has registration requirements. That being, all new home builders and new home sellers (known as “vendors“) must register and renew annually.


The Tarion Warranty Program: For the Pre-Construction Buyer

Every new home and condo build must enrol in the program. Because of this, all new homes built by a Tarion builder has coverage under the warranty program. The program gives a purchaser the peace of mind that they could never get when buying a resale property.

The warranty status stays with the property for the entire term even in the event of a sale. Should a sale of a property take place the new owner will assume whatever is left on the warranty coverage. Moreover, when purchasing a home that is less than seven years old, it is advisable that new purchasers contact Tarion to inform the change in ownership.


The Pre-Delivery Inspection (PDI)

Before taking possession of a new build, you’ll have the opportunity to go through a Pre-Delivery Inspection (PDI) with the builder. This is an important step in the new home buying process! During the PDI, there are three things to keep in mind:

  1. The builder will take you through a comprehensive inspection. Here, you can ask to see how the home system operates – from ventilation to the plumbing and heating.
  2. Have the builder’s PDI Form on hand. This is where you can make note of anything that is damaged, incomplete, missing, or not operating properly. Particularly, you should be verifying that these conditions exist prior to occupancy. Ideally, any issues you include on a PDI Form, the builder addresses right away, as held accountable by Tarion.
  3. And lastly, by the move-in date, any outstanding items must be on a 30-Day or Year-End Form. These forms represent a warranty service request for the unresolved work that the builder must complete. And, this is set within a specific timeframe.


The 7-Year Tarion Warranty

Here’s a Coles Notes breakdown of the coverage that you have during the 7-year term.

  • One-Year Warranty requires the home be fit for habitation and protects against building code violations.
  • Two-Year Warranty protects against such things like water penetration issues and material defects, and all issues relating to exterior cladding.
  • Seven-Year Warranty covers any and all issues relating to structural defects.

Moreover, the coverage limits include the maximum of:

  • $300,000.00 for freehold and condominium units; and
  • $50,000.00 multiplied by the number of units for condo common elements, at a maximum of $2.5 million.


Why do Pre-Construction Buyers Need to Know About Tarion?

Buying a home pre-build certainly has risks in comparison to buying an existing resale property. That’s why, before considering a pre-construction purchase, our advice to clients is to research the track record and reputation of the builder. When buying something that has not been built yet what could be more important?

The Tarion directory is an excellent resource that will allow a potential purchaser and their agent to do their due diligence on any developer. The directory lists all enrolled builders and discloses their history with past Tarion claims. It also provides detailed information as to how many homes the developer has built in the last 10 years.

When considering acquiring a property in the fast pace Toronto resale market, there are many advantages to buying pre-construction. If you purchase an 80-year-old home or older condominium you should account for having to pay for repairs or increases in condo fees over time. Buying a new build that has Tarion protection gives a certain peace of mind to a perspective purchaser investor. It tells you that even though the property is not built, the buyer is receiving a brand new, never been lived in property. And, it’s a home that is move-in ready from a reputable builder. With the right protection in place, you know that you’re getting a property of acceptable standards and a body to hold them accountable, should the developer not have honoured their obligations.



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This article is written by Ralph Fox, Broker of Record and Managing Partner here at Fox Marin Associates. Ralph is a Torontonian native who recognized from an early age that the most successful people in life apply long-term thinking to their investments, relationships, and life goals. It’s this philosophy, along with his lifelong entrepreneurial drive and exceptional business instincts that help to establish Ralph as a top agent in the real estate market in downtown Toronto.