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Get My Free Estimate →Tarion protects a condominium deposit to $20,000, not $100,000. The $100,000 figure is freehold, and even then it is 10 per cent of the price to that maximum, with $60,000 on homes priced at $600,000 or less. Separately, and more importantly for condominium buyers, s. 81 of the Condominium Act, 1998 requires deposits to be held in trust by a prescribed trustee or the declarant’s solicitor. Delayed occupancy compensation is $150 a day to a maximum of $7,500. Tarion lists 18 builders or projects in insolvency proceedings but states the list “may not be complete”. Since 1 April 2026 purchasers must notify Tarion of a purchase within 45 days.
The single most important number in Ontario pre-construction is the one most buyers have wrong. If you are buying a condominium unit, Tarion’s deposit protection is $20,000. Not $100,000. The $100,000 figure is freehold. Getting that wrong changes how you think about a $150,000 deposit entirely.
Deposit protection limits
| Type of home | Tarion deposit protection |
|---|---|
| Condominium unit | $20,000, plus a limited amount of accrued interest |
| Freehold, price $600,000 or less | Up to $60,000 |
| Freehold, price above $600,000 | 10 per cent of the purchase price, to a maximum of $100,000 |
| Freehold, agreement signed before 1 January 2018 | Maximum $40,000 |
Since January 2018, deposit protection also covers other payments made by the purchaser, such as those for upgrades and extras.
The other protection, which is the bigger one for condos
Condominium deposits do not rest on Tarion alone. Under s. 81 of the Condominium Act, 1998, a declarant must ensure that a trustee of a prescribed class, or the declarant’s solicitor, receives and holds in trust all money paid on account of an agreement of purchase and sale of a proposed unit, together with interest earned on it.
So a condominium buyer has two distinct things: statutory trust protection for the deposit under the Condominium Act, and Tarion warranty coverage of $20,000 on top. They are separate mechanisms and they fail in different ways. Trust money that is properly held and properly traced comes back. Tarion’s $20,000 is the warranty backstop.
Section 81(2)(b) expressly excludes occupancy fees from the trust requirement. Money paid as an occupancy fee during interim occupancy is not held in trust and is not recoverable as a deposit. See the separate page on interim occupancy.
What Tarion says it does when a builder fails
Quoted: “If an insolvent builder is unable to continue its operations and meet its obligations to purchasers/owners of new homes, consumers can have confidence that the pre-possession and post-possession warranties will be backstopped by Tarion.” Deposit protection applies where the builder goes bankrupt or fundamentally breaches the agreement.
The claim process
| Step | What happens | Timing |
|---|---|---|
| 1 | A claim is started through Tarion’s Deposit Claim Portal. | — |
| 2 | Tarion assesses the claim and issues a Conciliation Assessment Report. | — |
| 3 | Tarion sends the settlement package. | Within 7 business days of the Conciliation Assessment Report |
| 4 | All purchasers named on the agreement of purchase and sale sign the Claim Resolution and Release. | — |
| 5 | Cheque issued. | Within 15 business days of Tarion receiving the properly executed release |
Documents Tarion asks for: the completed agreement of purchase and sale with all schedules and amendments; copies of the cashed cheques paid to the builder, front and back; and correspondence from the receiver or trustee.
Timing caveat. Tarion states that if it is too early in the builder’s receivership to submit a deposit claim, the form will not open. Claims are gated on the stage of the insolvency proceeding, which means there can be a long period during which nothing can be done and nothing is wrong. Keep every document from day one.
Delayed occupancy compensation
| Item | Amount |
|---|---|
| Compensation for delay | $150 per day for direct living expenses such as accommodation and meals |
| Maximum | $7,500 |
| If the builder fails to give 10 days’ notice of a delay | $1,500 — that is $150 multiplied by 10 days |
| Notice required to change a closing date | At least 90 days in writing |
| On termination | Full refund of all monies paid — deposits, extras and upgrades — plus interest, in addition to delayed occupancy compensation |
Additional costs such as moving and storage are recoverable with receipts. Unavoidable delay — strikes, acts of God, pandemics — is excluded.
Tarion publishes a list, and it tells you the list is incomplete
Tarion maintains a page titled “Bankruptcies, Insolvencies, and Receiverships”. As at 30 August 2026 it lists 18 builders or projects. Tarion’s own wording on that page:
“Below you can find more information about some of the insolvency situations that Tarion is monitoring. Please note that this may not be a complete list of current insolvency situations.”
So 18 is what is published, not the total. Do not read the absence of a builder from that page as evidence of anything, and do not read a builder’s presence on it as the whole story either — a project in receivership can still complete.
A change that catches people out, starting now
Purchasers must give notice of their new home purchase to Tarion within 45 days of entering the agreement of purchase and sale. The requirement took effect 1 April 2026. Tarion has a transition period and has deferred the deposit-coverage consequences until 1 January 2027.
Tarion’s guidance describes this as applying to freehold homes. Freehold buyers who register in time “will qualify for the maximum amount of deposit coverage currently available”. Those who miss the deadline fall under a sub-limit within a special fund of $15 million per year, with compensation “based on a proportional share of the special fund” if claims exceed it.
Read that again. Missing a 45-day administrative deadline can move you from full deposit coverage to a proportional share of a capped pool. If you signed a freehold agreement recently, check whether the notice was given.
Holding a deposit on a project that has gone quiet?
If a project has stopped communicating, missed an occupancy date, or you have seen a receiver’s notice, the first thing to do is gather every document — agreement, schedules, amendments, cashed cheques front and back. Send me what you have and I will tell you what I can see and where you need a lawyer instead of me.
connect@jatindua.com · 437-987-1925 · Book a free consultation
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Frequently asked questions
How much of my condo deposit does Tarion protect?
$20,000, plus a limited amount of accrued interest. The $100,000 figure that circulates widely applies to freehold homes, not condominium units, and even then it is 10 per cent of the purchase price to that maximum.
Is my condo deposit safe above $20,000?
Tarion’s warranty coverage stops at $20,000, but that is not the only protection. Under s. 81 of the Condominium Act, 1998 a declarant must ensure deposits are held in trust by a trustee of a prescribed class or by the declarant’s solicitor, together with interest. That trust obligation is separate from and additional to Tarion’s coverage.
What does Tarion do if the builder goes insolvent?
Tarion states that where an insolvent builder cannot meet its obligations, the pre-possession and post-possession warranties are backstopped by Tarion. Deposit protection applies where the builder goes bankrupt or fundamentally breaches the agreement.
How long does a deposit claim take?
Tarion sends the settlement package within 7 business days of issuing its Conciliation Assessment Report, and issues a cheque within 15 business days of receiving the properly executed Claim Resolution and Release. But the claim cannot be started until the insolvency proceeding has reached a stage where Tarion opens the form, and that can take a long time.
What compensation applies if occupancy is delayed?
$150 per day for direct living expenses such as accommodation and meals, to a maximum of $7,500. If the builder fails to give 10 days’ notice of a delay, compensation is $1,500. At least 90 days’ written notice is required to change a closing date. On termination, all monies paid are refunded with interest, in addition to delayed occupancy compensation.
How many builders are currently insolvent in Ontario?
Tarion’s Bankruptcies, Insolvencies and Receiverships page lists 18 builders or projects as at 30 August 2026, but Tarion states explicitly that this “may not be a complete list of current insolvency situations.” Treat 18 as what is published, not as the total.
What is the new 45-day Tarion notice rule?
Purchasers must give notice of their new home purchase to Tarion within 45 days of entering the agreement of purchase and sale. It took effect 1 April 2026, with deposit-coverage consequences deferred to 1 January 2027. Freehold buyers who miss it fall under a sub-limit within a $15 million per year special fund, with compensation based on a proportional share if claims exceed it.
Related reading
- Cancelled projects: 11,653 units and what cancellation means
- Occupancy versus final closing when the market moved against you
- Reading a builder before you sign
Sources
Every figure on this page traces to one of these, and each was read on 30 August 2026. Primary sources only — statute, regulation, and the government or agency that administers the rule. Where I could not verify something from a primary source, the page says so instead of guessing.
- Deposit protection before you close. Tarion. Freehold deposit protection to a maximum of $100,000; condominium unit deposit protection of $20,000 plus limited accrued interest. Accessed 30 August 2026.
- Pre-possession coverage. Tarion. What the warranty covers before you take possession, including deposits and delayed occupancy. Accessed 30 August 2026.
- Making a deposit claim — insolvency. Tarion. The deposit claim portal, the conciliation assessment report, and the settlement timelines. Accessed 30 August 2026.
- Condominium units: coverage for occupancy dates, delays and cancellations. Tarion. Delayed occupancy compensation of $150 per day to a maximum of $7,500, and the 90-day notice requirement to change a date. Accessed 30 August 2026.
- Bankruptcies, insolvencies and receiverships. Tarion. Tarion states this “may not be a complete list of current insolvency situations”. Accessed 30 August 2026.
- Notice of purchase requirement. Tarion. Purchasers must notify Tarion within 45 days of entering the agreement; requirement effective 1 April 2026, with deposit coverage consequences deferred to 1 January 2027. Accessed 30 August 2026.
- Condominium Act, 1998, S.O. 1998, c. 19. e-Laws. Section 73 sets the ten-day rescission right; section 80 governs interim occupancy and occupancy fees; section 81 governs money held in trust. Accessed 30 August 2026.
About the author — Jatin Dua, Etobicoke real estate agent
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke. I write these pages the same way I work a file: read the primary source, quote it, date it, and say plainly where the source is silent or where two sources disagree. If a figure on this page has no citation beside it, that is a mistake and I want to hear about it.
I work with buyers, sellers, renters and investors across Etobicoke, Mimico, Humber Bay Shores, New Toronto, Long Branch, Alderwood and Stonegate–Queensway. connect@jatindua.com or 437-987-1925.