Tarion warranty explained — what Ontario new home buyers need to know

Tarion administers Ontario’s statutory new home warranty under the Ontario New Home Warranties Plan Act, providing three tiers of coverage: one year for all defects in work and materials, two years for major systems and water penetration through the building envelope, and seven years for major structural defects. Unlike a voluntary builder warranty, this coverage is mandatory for all new homes built by a registered builder in Ontario — the builder cannot exclude it by contract.

Understanding how Tarion works before you take possession of your new home matters because the way you use Tarion’s forms determines what you can claim later. Miss a submission deadline or sign something you haven’t read carefully, and you may inadvertently narrow your rights.

What is Tarion and what is its role?

Tarion Warranty Corporation (formally the Ontario New Home Warranties Plan) is a not-for-profit corporation established by provincial legislation to administer warranty protection for new home buyers in Ontario. Every builder who sells new homes in Ontario must be registered with Tarion as a condition of operating.

Tarion’s role is two-part:

1. It sets the warranty framework — defining what builders are required to cover, for how long, and through what process
2. It steps in as the insurer of last resort — if your registered builder refuses to fix a warranted defect, Tarion can compel the repair or pay for it directly (up to coverage limits)

This is a meaningful distinction from a purely voluntary builder warranty program. In the US, if a builder disputes your claim and refuses to repair, your options are mediation, arbitration (if your contract mandates it), or litigation. In Ontario, Tarion provides an administrative resolution path that sits between your builder and the courts.

That said, Tarion does not act as your advocate. It is a neutral administrator. Whether it agrees that a defect is warranted depends on the evidence you provide, the defect’s classification, and the specific language of the Act. Coming into the process informed and documented puts you in a much stronger position.

The three-tier warranty structure

Year 1: All defects in work and materials

During the first year of ownership, your builder is responsible for repairing any defect in work or materials — essentially, anything that was installed or built incorrectly that affects the home’s quality, function, or appearance. This is the broadest coverage tier.

Examples of Year 1 defects:

• Doors or windows that don’t close, seal, or lock correctly
• Grout cracking or tiles debonding due to poor installation
• Drywall finishing issues (nail pops, visible seams, inconsistent texture)
• Cabinetry misalignment or hardware not installed
• Paint inconsistencies or missed areas beyond normal touch-up expectations
• Flooring squeaks, gaps, or buckling due to installation failure
• Caulking failures at tub surrounds, shower enclosures, or window frames

Year 1 coverage includes the items you’re most likely to notice first. This is why completing your PDI form carefully, your 30-Day Form promptly after moving in, and your Year-End Form before the first anniversary all matter — these are the formal mechanisms for capturing Year 1 defects.

Year 2: Systems and water penetration

The second year of coverage focuses on two specific categories:

Water penetration into the basement or crawl space through the foundation walls or floor — one of the most significant failure modes in residential construction. If your basement takes water during the first two years, this is a Year 2 warranty item.

Defects in the electrical, plumbing, and heating delivery systems — includes wiring, pipes, drainage, forced air or hydronic heating systems. A furnace that fails to deliver adequate heat, a pipe that develops a slow leak, or a circuit breaker that trips repeatedly under normal load would be Year 2 system defects.

Violations of the Ontario Building Code that affect health and safety — any Code violation discovered within two years that poses a health or safety risk falls within Year 2 coverage regardless of which system is affected.

Defects in the exterior cladding, windows, and doors — specifically failures that allow water penetration into the building envelope, which extends from Year 1 into Year 2.

Years 1–7: Major structural defects

Major structural defects are covered for seven years from the date of possession. A major structural defect under the Ontario New Home Warranties Plan Act is one that:

• Results in failure of a load-bearing part of the home’s structure, or
• Significantly impairs the use of the building for residential purposes

This covers failure of foundations, load-bearing walls, structural beams, columns, roof framing, and floor systems. It does not cover every crack in a wall or every imperfection in a concrete slab — the defect must rise to the level of affecting structural integrity or rendering the home unusable.

Coverage limits apply. As of recent years, Tarion’s coverage maximums for freehold homes are $300,000 for the deposit protection and $300,000 for defect repairs — verify current limits on Tarion’s website as these are subject to change by regulation.

What Tarion does not cover

Knowing the exclusions is as important as knowing the coverage. Tarion will not cover:

Cosmetic defects after Year 1. Scratches on flooring, minor paint scuffs, and other cosmetic issues must be raised during the first year. After your Year-End Form submission, cosmetic defects age out of coverage entirely.

Damage you caused. Any defect resulting from your own actions, modifications to the home, or failure to perform routine maintenance is excluded. If a drainage issue develops because you planted a garden against the foundation, that is not a warranty defect.

Normal wear and tear. Gradual deterioration from ordinary use — caulking that dries and shrinks over time under normal conditions, for example — is not a warranty defect.

Appliances and equipment covered by manufacturer warranties. The refrigerator, dishwasher, range, and other included appliances have their own manufacturer warranties. Tarion’s coverage addresses the home’s construction, not its moveable components.

Secondary damage from excluded causes. If the root cause of damage is excluded, the resulting damage is also excluded.

Damage from unusual weather or acts of nature beyond the design parameters of the home.

How to submit a warranty claim

The PDI form (Pre-Delivery Inspection)

The PDI form is completed during your pre-delivery inspection, which typically occurs one to two weeks before your closing date. During the PDI, you and your builder’s representative walk the home together. The PDI form documents the condition of the home at possession — any defect noted on the PDI form is established as a pre-existing condition, which protects you because you’ve formally put your builder on notice before you even moved in.

Items documented on the PDI form are the first items your builder should address in the weeks following your move-in. The PDI form does not start your warranty clock — possession does.

Take the PDI process seriously. A defect not noted on the PDI form will not necessarily be ineligible for warranty coverage, but it will be harder to characterize as a pre-possession defect if a dispute arises.

The 30-Day Form

Within 30 days of taking possession, you have the right to submit a 30-Day Form to Tarion through MyHome (Tarion’s online portal) identifying warranty defects that you’ve discovered since moving in. This form captures issues that became apparent once you were living in the home — items that weren’t visible or testable during the PDI.

Submit this form even if your issues seem minor. The form creates a formal record, triggers your builder’s obligation to respond, and establishes a baseline for your Year 1 warranty.

Builders are required to respond to 30-Day Form items and either complete repairs or provide a written explanation of why they dispute coverage — typically within 120 days.

The Year-End Form

Before the first anniversary of your possession date, you can submit a Year-End Form capturing any additional Year 1 defects that have appeared over the course of the year. This is your last opportunity to formally record Year 1 workmanship defects under the warranty.

Do not wait until the anniversary approaches to look. Spend time in the weeks leading up to your Year-End Form deadline doing a thorough review of the home — repeat the room-by-room inspection you did during your PDI.

Escalating to Tarion

If your builder does not repair the items from any of these forms within the required timeframe, or disputes coverage improperly, you can escalate to Tarion. Tarion will then investigate and, if the defect is warranted, can direct your builder to repair it. If the builder still doesn’t comply, Tarion can arrange the repairs and charge the builder.

Escalation to Tarion requires that you first give your builder the opportunity to respond under the standard timelines. Do not contact Tarion before the builder’s response period has elapsed.

Tarion vs your builder: who fixes what?

This is a common source of confusion. Your builder is the first party responsible for all warranty repairs. Tarion does not come to your home and fix things directly as a first step — it provides the warranty framework and steps in when the builder fails to meet their obligations.

Think of Tarion as backstop insurance, not a first responder. Your relationship for repairs is with your builder. Tarion’s involvement escalates the pressure on that relationship when the builder is unresponsive.

Warranty programmes elsewhere in Canada

Ontario’s Tarion system is one of the most structured in the country, but other provinces have equivalent programmes:

BC Housing New Home Warranty Program — British Columbia requires new homes to be enrolled in a third-party warranty programme approved by the Homeowner Protection Office. The standard coverage is 2 years for defects in materials and labour, 5 years for the building envelope, and 10 years for structural defects. Unlike Ontario, BC uses licensed third-party warranty providers (not a single administrator like Tarion).

Alberta New Home Warranty — Alberta operates a mandatory new home warranty scheme under the New Home Buyer Protection Act, administered through approved warranty providers. Coverage follows a similar structure: 1 year for labour and materials, 2 years for heating/electrical/plumbing, 5 years for the building envelope, and 10 years for structural defects.

National Building Code of Canada — All provinces and territories adopt the National Building Code of Canada as a baseline for construction standards. Compliance with the NBC is a legal requirement, and violations of the Code that affect health and safety can form the basis of warranty claims in most provinces.

The Australian equivalent

In Australia, builder warranties are established through state legislation rather than a single national scheme. New South Wales provides a 6-year statutory warranty for major defects and a 2-year warranty for non-structural major defects under the Home Building Act 1989. Victoria and Queensland provide 10-year coverage for structural defects. Each state requires builders to hold home warranty insurance that protects the owner if the builder becomes insolvent, similar in intent to Tarion’s backstop role in Ontario — but administered through private insurance rather than a statutory corporation.

Key takeaways

• Tarion administers Ontario’s mandatory new home warranty under the Ontario New Home Warranties Plan Act — all registered builders must comply, and the coverage cannot be excluded by contract
• The three-tier structure covers Year 1 (all defects in work and materials), Year 2 (water penetration, major systems, Building Code violations affecting health and safety), and Years 1–7 (major structural defects)
• Exclusions include cosmetic defects after Year 1, homeowner-caused damage, normal wear and tear, and appliance failures
• The three key claim forms are the PDI form (at pre-delivery inspection), the 30-Day Form (within 30 days of possession), and the Year-End Form (before your first anniversary) — missing these deadlines can cost you coverage
• Tarion is the backstop, not the first responder — your builder must have the opportunity to repair before Tarion steps in
• BC and Alberta have their own mandatory new home warranty programmes with broadly similar coverage structures but different administration models