How is my deposit protected when I buy a pre-construction home in Ontario?

When you buy a new home or condo from a registered builder in Ontario, your deposit is protected under the New Home Warranties Plan Act through Tarion. Tarion provides deposit protection up to prescribed limits — currently up to $60,000 for freehold homes and up to $60,000 for condominium units (confirm current limits at tarion.com, as they can be updated).

This protection applies if the builder fails to complete the home, fails to deliver possession, or becomes insolvent. You must have purchased from a builder who is registered with Tarion; buying from an unregistered builder disqualifies you from this protection, which is one reason to verify builder registration before signing anything.

For condo purchases specifically, the Condominium Act also requires deposits to be held in trust until occupancy or return, providing an additional layer of security.

To make a deposit protection claim, you file with Tarion within specified limitation periods. Keep all receipts and records of every deposit payment made. If you're purchasing at the higher end of the market or paying deposits above the protection limits, discuss additional strategies — such as escrow arrangements or staged payments — with your lawyer before signing.