Tarion Warranty Coverage Before Possession

Before you move in, two protections matter most: deposit protection and delayed closing/occupancy coverage. Here’s the simple breakdown so you know what you’re entitled to before occupancy.

1) Deposit Protection

If you sign a purchase agreement and provide a deposit, Tarion can protect those funds (up to limits) if the sale does not proceed due to:

  • Bankruptcy of the builder
  • Fundamental breach of the purchase agreement by the builder
  • Statutory rights allowing you to terminate the purchase agreement

2) Delayed Closing / Occupancy Coverage

Condo builders in Ontario must provide a delayed occupancy warranty when the agreement is signed. Details are included in the Tarion Addendum attached to your agreement.

Tip If you’re unsure about delay rights or deadlines, review the Addendum and consider legal advice.
Freehold Deposit Protection

Freehold Homes

Agreements signed before January 1, 2018: up to $40,000.

Agreements signed on or after January 1, 2018:

  • Homes priced at $600,000 or less: up to $60,000
  • Homes priced over $600,000: 10% of purchase price, up to $100,000
Condo Deposit Protection

Condominium Units

Under the Condominium Act, deposits must be placed in trust. If your builder terminates the agreement, they must return your deposit in full within 10 days.

If the builder fails to return the deposit, Tarion offers deposit protection up to $20,000.

Critical Dates You’ll See in the Addendum

Firm Occupancy Date (Condo) / Firm Closing Date (Freehold) If not met, the builder must establish a delayed date, and you may be entitled to compensation.
Outside Occupancy Date (Condo) / Outside Closing Date (Freehold) The latest permissible date your builder commits to. Commonly set 365 days after the firm date.
First Tentative Occupancy / Closing Date The initial projected date for move-in/closing (subject to change).
Other Tentative Dates (Condo / Freehold) May include a final tentative occupancy date (condos) or second tentative closing date (freehold), depending on the schedule rules.
Firm Date Set With Notice If tentative dates cannot be met, the builder can set a firm date with notice (often 90 days’ notice).
Statement of Critical Dates On the first page of the Addendum, signed by both buyer and builder. Always review this carefully.

Compensation for Delayed Occupancy / Closing

Compensation (up to $7,500) may apply if occupancy/closing happens after the firm/tentative date, or if you terminate during an allowed termination period due to delay.

Up to $7,500 max $150/day living expenses Receipts not required (living) Receipts required (direct costs)

If the builder fails to give at least 10 days’ notice of a delay, a payment of $1,500 (calculated as $150 × 10 days) may be payable.

Unavoidable Delays

Unavoidable delays are exceptional circumstances outside the control of builder and purchaser (example: strike, fire, act of God, civil insurrection, war/terrorism, pandemic).

What it means The builder may extend deadlines and dates by the unavoidable delay period without compensation.
Notice requirement The builder must notify you promptly, estimate duration, and provide written notice when the delay ends.

For more information and specific details, always refer to the Tarion Addendum attached to your purchase agreement and consult your legal advisor if needed.