Tarion offers up to $100,000 buyer protection
November 1, 2017
Starting in January 2018, Ontario buyers of new detached houses—and other non-condominium freehold homes—will have greater deposit protection as a new policy proposed by Tarion comes into force.
Based on extensive public feedback, Tarion is proposing to increase deposit protection for non-condominium freehold homes from the current $40,000 to a maximum coverage of $100,000 and a minimum of $60,000.
The minimum threshold of $60,000 coverage ensures that all non-condominium freehold homes will have increased coverage under this proposal; this means that non-condominium freehold homes with a purchase price below $600,000 will have up to $60,000 in coverage.
The new deposit protection coverage is expected to be in place in January, and it could be extended to include other payments, such as for upgrades and extras, if the Strengthening Protection for Ontario Consumers Act, 2017 is passed by then.
Deposits with respect to condominium dwelling units are not part of the proposed changes because condominium deposits are protected by the trust provisions of the Condominium Act, 1998 as well as by coverage under Ontario New Home Warranties Plan Act (ONHWPA) of up to $20,000.
Deposit protection levels under ONHWPA for non-condominium freehold homes and condominium dwelling units were last changed in 2003 and the Ontario housing marketplace has changed dramatically since then with the escalation of new homes prices across the province, Tarion noted.