Tarion expands deposit coverage for new homebuyers in 2018
Enhanced deposit coverage and new warranty protection for condo conversions
Ontarians hoping to take the leap into homeownership can buy with added confidence thanks to expanded consumer protection measures coming into force on January 1, 2018.
Purchasers placing deposits on new freehold homes will now have increased deposit coverage of 10 per cent of the purchase price, up to a maximum coverage of $100,000 with minimum coverage of $60,000. Previously, these buyers were only eligible for a maximum of $40,000 in deposit protection.
New homebuyers will also benefit from the recent passage of the Strengthening Protection for Ontario Consumers Act, 2017, which extends the deposit protection provisions to include other payments, such as those made for upgrades and extras.
Following extensive public feedback earlier this year, these changes will help bring deposit coverage in line with today’s new home market.
Coverage for down payments on condominium dwelling units will remain unchanged since these units benefit from significant protection under the trust provisions of the Condominium Act, which require all monies paid towards the purchase price to be held in trust. Additionally, deposits made for condominium purchases are protected up to $20,000 by Tarion.
For those looking to purchase converted condominiums, changes to the Ontario New Home Warranties Program mean that their units will now have warranty coverage. These developments, referred to as residential condominium conversion projects, or RCCPs, turn existing buildings into condos that incorporate some of the existing building’s more interesting features (e.g., large windows, framing, brick walls) into the design.
RCCPs will benefit from the same statutory warranty coverage extended to all condominium projects, including deposit protection, delayed occupancy coverage and the one-, two- and seven-year warranties. There is one exception: the first year warranty on work and materials will not apply to pre-existing elements (e.g., a foundation or exterior cladding). Under the new regulations, builders of condominium conversion projects and vendors selling units in these projects must also be registered with Tarion.
To learn more about the expanded protections, new homebuyers are encouraged to visit Tarion.com