Consumer Protection: More Deposit Protection
Changes to act means down payment coverage has increased
When you buy a resale home, you can see what you’re getting before you sign an agreement and invest your money.
However, when purchasing a newly built home, your home may only exist as a floorplan when you put your deposit down. It’s then on your builder to bring your investment to life.
But if your home never makes it beyond the floorplan and your builder does not — or cannot — return your deposit, it’s good to know that your deposit is protected.
As of January 1, changes to regulations under the Ontario New Home Warranties Plan Act mean that new homebuyers of non-condominium freehold homes have more of their deposit money protected than ever before.
How does this work?
If you paid $600,000 for your home or less, you are eligible to receive up to $60,000 to reimburse you for amounts paid to the builder. If your home was more than $600,000, you are eligible to receive up to 10 per cent of the purchase price, to a maximum of $100,000.
In addition, the passage of the Strengthening Protection for Ontario Consumers Act, 2017, means that this deposit protection now includes other payments, such as those made for upgrades and extras.
While this enhanced coverage only applies to non-condominium freehold homes, it’s important to note that condo buyers are also protected by the Condominium Act, which requires that the full deposit be placed in trust. If, for some reason these funds are released improperly from the trust, Tarion will cover up to $20,000.
A new home is a big investment – one of the biggest of our lives. And while you can’t put a price on peace of mind, I’m pleased that we’re able to provide deposit protection that is more in line with today’s home prices.
If you’re looking to buy a new home this year, I encourage you to visit Tarion. com to learn more about Tarion’s new deposit coverage.
Howard Bogach is president and CEO of the Tarion Warranty Corporation. His column appears 10 times a year in HOMES Magazine. For more information about how Tarion helps new homebuyers, visit Tarion.com or find them on Facebook at Facebook.com/TarionWarrantyCorp