Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
What's Your Unit Worth Right Now?
Get a free AI-powered price range for your condo in under 90 seconds — floor, exposure, view, parking and locker included. No name or address required.
Get My Free Estimate →The numbers matter more than the reassurance. Deposit protection on freehold homes is up to $100,000; condominium deposits are separately protected by the requirement under the Condominium Act that they be held in trust. Delayed closing or occupancy compensation is $150 per day for living expenses, to a maximum of $7,500.
The figure that surprises people is the aggregate warranty cap. For agreements signed on or after 1 July 2023: $400,000 for a freehold home, $300,000 for a condominium unit, and up to $3.5 million for common elements. On a $6 million custom house, $400,000 is under 7% of the purchase price.
The numbers
| Protection | Amount |
|---|---|
| Deposit protection, freehold | Up to $100,000 |
| Deposit protection, condominium | Held in trust under the Condominium Act |
| Delayed closing or occupancy compensation | $150 per day, maximum $7,500 |
| Aggregate warranty cap, freehold, agreements on or after 1 Jul 2023 | $400,000 |
| Aggregate warranty cap, condominium unit, agreements on or after 1 Jul 2023 | $300,000 |
| Common elements | Up to $3.5 million |
| Aggregate cap, agreements 1 Feb 2021 – 30 Jun 2023 | $300,000 freehold and condominium, $3.5M common elements |
What the caps mean at luxury price points
| Purchase price | $400,000 freehold cap as % of price |
|---|---|
| $2,000,000 | 20% |
| $4,000,000 | 10% |
| $6,000,000 | 6.7% |
| $10,000,000 | 4% |
What has changed recently
- 14 July 2025: a Tarion Warranty Information Sheet became mandatory, carrying a unique Home ID and registration code so purchasers can verify that a builder is registered. It exists in part to curb deposit-taking by unregistered builders.
- 6 August 2025: an expanded Condominium Buyer’s Guide became mandatory to attach to pre-construction condominium purchase agreements.
- 1 January 2026: a 10-day rescission right on new freehold home purchase agreements was proclaimed into effect under Homeowner Protection Act, 2024 amendments.
What buyers of expensive new builds should actually do
- Verify the builder’s registration using the Warranty Information Sheet and the Home ID.
- Have a lawyer review the agreement inside the rescission window — 10 days for a pre-construction condominium, and 10 days for a new freehold home under the provisions proclaimed effective 1 January 2026.
- Negotiate contract protections beyond Tarion. Holdbacks, specified materials and finishes rather than allowances, defined tolerances, and clear delay provisions.
- Retain your own professional oversight during construction rather than relying on statutory warranty to catch problems afterwards.
- Understand the claim deadlines. Warranty coverage is time-limited and procedural — missing a submission window can end a valid claim.
- Confirm coverage for your agreement date directly with Tarion, since caps changed on 1 February 2021 and again on 1 July 2023.
The practical takeaway
Read Tarion as a baseline consumer protection that scales badly with price. On an expensive new build the real protection comes from the builder you choose, the contract you sign and the oversight you pay for — and the statutory warranty is what remains if all three fail.
Frequently asked questions
How much deposit does Tarion protect?
Up to $100,000 on freehold homes through the guarantee fund. Condominium deposits are protected differently — builders and vendors are required under the Condominium Act to hold them in trust.
What is delayed closing compensation?
$150 per day for living expenses such as meals and accommodation, to a maximum of $7,500, payable in defined circumstances where a builder delays a closing or occupancy date.
What is the maximum Tarion warranty coverage?
For agreements signed on or after 1 July 2023, the aggregate maximum is $400,000 for a freehold home, $300,000 for a condominium unit, and up to $3.5 million for common elements. Agreements signed between 1 February 2021 and 30 June 2023 carry $300,000 for both freehold and condominium with the same $3.5 million common element cap.
Is that enough on a multi-million dollar home?
It is a floor rather than full protection. On a $6 million custom build, a $400,000 aggregate cap covers under 7% of the price. Tarion is not a substitute for choosing the builder carefully and structuring the contract properly.
What is the Tarion Warranty Information Sheet?
A document carrying a unique Home ID and registration code that allows a purchaser to verify a builder’s registration. It has been mandatory since 14 July 2025, and it exists partly to curb deposit-taking by unregistered builders.
What changed for pre-construction condo buyers in 2025?
An expanded Condominium Buyer’s Guide became mandatory to attach to pre-construction condominium purchase agreements executed on or after 6 August 2025.
Thinking about buying or selling at the top end?
Send me the address, or the shortlist you are considering. I will tell you what the property is actually worth today, what the land is worth without the house, what the transfer tax and carrying costs will be, and whether the deal makes sense. Confidential, always.
connect@jatindua.com · 437-987-1925 · Book a free consultation
Confidential. Read personally and answered within 24 hours. I never share, sell or distribute your information.
Related reading
- Building a custom home in Toronto: the real timeline and the real costs
- Pre-construction luxury condos: the risks nobody puts in the brochure
- Your 10-day rescission right on a pre-construction purchase
- There is no cooling-off period on a resale home in Ontario
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
- Tarion — Coverage for closing dates and delays
- Tarion — Post-possession coverage
- Tarion — Deposit protection
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke, and I work with buyers, sellers and investors across Toronto and the west GTA. A large part of my work sits in the upper end of the market, where the comparables are thin, the rules are heavier and the cost of a wrong number is measured in hundreds of thousands of dollars.
The free estimators on this site are mine. I built them because the first question every owner asks is “what is it worth?” and the honest answer starts with a number you can check yourself. connect@jatindua.com or 437-987-1925.