Tarion Warranty Coverage: 1, 2 and 7 Years on a New Custom Home

Updated October 26, 2026, by Building Dreams

Tarion warranty coverage is the new home warranty your builder must provide in Ontario, backed by Tarion. It covers work and materials for one year, water penetration and core systems for two, and major structural defects for seven. A home on your own lot qualifies when a licensed builder builds it; an owner-built home doesn't.

Tarion warranty coverage is the protection the Ontario New Home Warranties Plan Act attaches to a newly built home. Your builder provides the warranty, and if the builder doesn't resolve a covered problem, you can claim with Tarion [1]. Three clocks start on the same day, the day you take possession. Year one covers defects in work and materials. Year two adds water penetration and the electrical, plumbing and heating systems. Major structural defects stay covered for seven years [2]. The coverage stays with the home if you sell it [1].

A custom home on a lot you already own is covered too. Tarion calls it a contract home: a licensed builder does all the work and supplies the materials under a contract with you [1][3]. Manage the trades yourself, or supply a key part of the build, and the home may count as owner-built. An owner-built home has no Tarion warranty [3].

What is Tarion warranty coverage?

In short: Your builder owes you the warranty, Tarion backs it, and HCRA licenses who can build.

Think of a Tarion warranty as a promise with a safety net. Your builder makes the promise and handles warranty repairs directly. Tarion is the net: if the builder fails to fix a covered defect or disputes it, you claim with Tarion, which assesses it and sees that warranted items get resolved [1].

Protection starts before move-in. Coverage begins when you sign your purchase agreement or construction contract [1][3]. That means financial protection while the builder works, then defect coverage once you take possession. It runs for up to seven years.

A third body controls who can offer it. The Home Construction Regulatory Authority (HCRA) licenses the people and companies that build new homes in Ontario [4]. A licensed builder can't start construction until it has enrolled the home with Tarion [5]. You can check both the licence and the enrolment before you sign [6].

Does Tarion cover a custom home built on your own lot?

In short: Yes, when one licensed builder does all the work; an owner-built home has no Tarion warranty.

Yes, as long as a licensed builder builds it for you. Tarion warranty coverage applies to a home on land you already own, with one exception: Delayed Closing Coverage doesn't apply [3]. An owner-built home is a different case. It isn't exempt from the warranty. It has no statutory warranty at all [6].

The line between the two comes down to control. Tarion treats a home as a contract home when the builder performs all of the work and supplies all of the materials under a contract with you [3]. Three things can change that: exercising significant control over the build, supplying an essential element, or hiring separate contractors for different stages [3]. Any one of them may get the home classed as owner-built. HCRA adds that an owner-builder takes on the builder's role and manages the entire project [6]. A builder doing contract work on your land must hold an HCRA licence as both a builder and a vendor [6].

Contract home vs owner-built home

Here's the same lot and the same house plan, built two ways.

Even on a contract home, anything you supply sits outside the warranty. HCRA's guidance gives a pre-existing foundation as the example: if it proves deficient, coverage doesn't extend to it [5]. Tarion recommends having a lawyer review your construction contract [3]. When you meet a custom home builder in Hamilton, ask whether the contract puts all of the work and materials with the builder.

What does Tarion warranty cover in years 1, 2 and 7?

In short: Work and materials for one year, water and core systems for two, major structural defects for seven.

Each period covers a different kind of problem, and all three run from your date of possession [2].

Year one also protects your selections. If you chose a finish or fixture from the builder's options, the builder can't substitute it without your written consent [3].

Timing decides which warranty applies. A leak through a basement wall at month 18 sits inside the two-year warranty. The same leak in year three falls under the seven-year warranty only if it comes from the failure of a load-bearing part of the home [2].

Tarion warranty coverage 7 years: what counts as a major structural defect

The seven-year warranty ends on the seventh anniversary of your possession date [2]. It covers one thing, a major structural defect. Tarion defines that as a defect in work or materials that does at least one of three things [2]:

• Causes a structural load-bearing element of the home to fail.

• Materially and adversely affects a load-bearing element's ability to carry its loads over its normal service life.

• Materially and adversely affects the use of a significant portion of the home as a residence.

In practice, Tarion lists significant damage from soil movement and major cracks in basement walls [2]. It also lists chemical failure of materials, environmentally harmful substances such as excessive radon, and collapse or serious distortion of joints or the roof structure. Three things stay outside the seven-year warranty: damage to drains or services, dampness that doesn't come from a load-bearing failure, and damage to finishes [2].

What is not covered?

In short: Anything you supply or alter, normal wear, and true acts of God, but not normal Ontario weather.

The Act sets out what the Tarion warranty leaves out for freehold and contract homes. The items most likely to matter on a custom build are these [7]:

• Defects in materials, design or work you supply yourself.

• Alterations, deletions or additions you make.

• Normal wear and tear, and normal shrinkage as materials dry after construction.

• Damage from dampness or condensation when ventilation isn't kept adequate or a humidifier is misused.

• Damage caused by you or your visitors.

• Secondary damage, such as damage to belongings or personal injury.

• Settling of land around the home or along utility lines, other than beneath the footings.

• Surface defects you accepted in writing at possession.

Weather damage isn't excluded across the board. The act of God exclusion covers only extraordinary events, such as tornadoes, earthquakes and extreme winds. Ice, snow, high winds and heavy rain are normal for Ontario, and a home built to code should withstand them [7]. Tarion's example: if badly installed shingles blow off on a windy day, the builder replaces them unless it can show the wind was extraordinary [7].

Renovations sit outside the new home warranty too. Renovating or upgrading an existing home typically doesn't make it a new home [6]. Protection for renovation work comes from your contractor's written contract and warranty.

How much does Tarion cover?

In short: Up to $400,000 for agreements signed on or after July 1, 2023, plus up to $40,000 financial loss for contract homes.

Tarion warranty coverage has dollar caps, and the cap that applies depends on when your agreement was signed. For a new freehold home signed on or after July 1, 2023, the maximum is $400,000, up from $300,000 before that date [8].

Tarion's warranty information sheet for contract homes confirms the same $400,000 maximum for a home built on land you own [9]. Contract homes also get a separate protection during construction. If your builder fails to substantially perform the contract, you may be entitled to compensation [3]. It covers the difference between what you paid and the value of the work and materials supplied, up to $40,000. Deposit protection covers deposits paid under a purchase agreement for a new home bought from a builder [3].

Is Tarion warranty mandatory?

In short: Yes, for every new home a builder builds; only owner-built homes fall outside it.

Yes. By law, every new home built in Ontario comes with a warranty from its builder [1]. You don't buy it separately or choose to opt in, and a licensed builder can't leave it out. That includes smaller dwellings: coach houses, laneway homes and tiny homes generally need a licensed builder and warranty coverage too [6].

The one exception is the owner-built home. If you build for your own use on land you own, you may not need a licence if you don't sell it [6]. That home won't carry statutory warranty coverage, though. A builder who isn't listed in the Ontario Builder Directory is building illegally [10]. If you're unsure whether a particular home qualifies, Tarion can advise; send the question to [email protected] [7].

How do you check a builder's licence and Tarion enrolment?

In short: Search the builder in the Ontario Builder Directory and confirm Tarion enrolment before you sign.

HCRA's advice is to confirm both the licence and the Tarion enrolment before you sign a contract [6].

1. Go to the Ontario Builder Directory at obd.hcraontario.ca [10].

2. Search by the builder's name. Filters such as insolvency status or the name of a company director or officer narrow the results [11].

3. Read the profile. It shows licensing status, years active, number of homes built, and any HCRA regulatory action, charges or convictions [11].

4. Review the warranty history. That part of the profile comes from Tarion's own data [10].

5. Ask the builder to confirm that your home is approved by Tarion and will be enrolled in the warranty plan [6].

Treat the directory as a fact check rather than a ranking. HCRA describes it as an information resource, not a rating system [12]. If a builder you're considering isn't listed, contact HCRA before going further [11]. If you're comparing design-build custom homes, run the same check on every builder on your shortlist.

How does a builder's own warranty fit alongside Tarion?

In short: It's a separate contract that sits beside Tarion's coverage, and Tarion doesn't back it.

A builder may also give its own written warranty, which runs beside the Tarion warranty as a separate contract.

Tarion's coverage doesn't extend to contractual warranties outside the Act, so those terms are between you and the builder [7].

Building Dreams, for example, gives a two-year materials and labour warranty once a custom home or renovation is complete. It covers qualifying issues beyond normal wear and tear, subject to the written warranty terms [13]. A final walkthrough and follow-up check-ins come with it.

Planning a custom home on your own lot in Hamilton, Burlington or Niagara? Start a project to talk through how both layers apply to your build.

What happens if a warranty problem isn't fixed?

In short: Claim through MyHome, give the builder its 120-day repair period, then ask Tarion for conciliation.

Start with your builder, who handles warranty repairs first. If the builder doesn't resolve a covered issue, or says it isn't covered, you can make a Tarion warranty claim [1]. Tarion's MyHome portal lets you submit a claim to your builder and Tarion at the same time. To stay eligible for Tarion's help, report each issue within its warranty timeframe [14].

Tarion's claim forms are the Initial, Mid-Year, Year-End, Second-Year and Major Structural Defect forms [14][15]. Once you submit one, the builder gets an initial 120-day repair period, which doesn't apply to major structural defects [14]. If items are still open, you can ask Tarion for conciliation, which usually means an inspection at your home with the builder's representative present. For Second-Year and Major Structural Defect claims, that request has to come within 30 days after the repair period ends [14].

Key points

• Every new Ontario home comes with a builder warranty by law, and Tarion steps in when a builder doesn't resolve a covered claim.

• The 1, 2 and 7 year periods all start on your date of possession and stay with the home if it's sold.

• A custom home on land you own is a contract home and gets the same coverage, except Delayed Closing Coverage.

• Manage the trades yourself or supply an essential element, and the home may become owner-built, with no Tarion warranty.

• Freehold and contract homes are covered up to $400,000 for agreements signed on or after July 1, 2023.

• Check a builder's licence and Tarion enrolment in the Ontario Builder Directory before you sign.

Hire one licensed builder to do all the work, and your new home on your own lot carries full Tarion warranty coverage.

Tarion warranty coverage FAQ

In short: Coverage starts at possession, follows the home for up to seven years, and depends on you maintaining it.

When does Tarion warranty coverage start on a contract home?

Tarion's contract home sheet says the warranty on work and materials begins when the home is substantially complete and ready for possession [9]. The one, two and seven year periods all count from your date of possession [2].

Can I do some of the work myself and keep Tarion coverage?

Anything you supply yourself, whether materials, design or work, is excluded from the warranty [7]. If you supply an essential element or take significant control of the build, the whole home may be treated as owner-built [3].

Does the Tarion warranty transfer if I sell the home?

Yes. Coverage stays with the home for up to seven years, even after a sale [1]. The next owner picks up whatever time remains.

Is a resale home still under Tarion warranty?

It can be, if the home is less than seven years old [1]. The Ontario Builder Directory lets anyone buying a resale home built in the last seven years confirm its warranty coverage [11].

What is the 45-day registration rule?

From April 1, 2026, freehold buyers who register their purchase agreement with Tarion within 45 days of signing qualify for the maximum deposit coverage. Tarion has deferred the deposit changes until January 1, 2027 [3].

Is there a pre-delivery inspection before move-in?

Yes. Tarion says the builder must walk through the completed home with you before handing over the keys and explain how its systems work [15]. The PDI Form records anything incomplete, damaged or missing. Tarion may use it if there's a dispute about whether damage happened before possession [15].

What do I have to do to keep my coverage?

Maintain the home properly, report warranty issues to your builder in writing as soon as possible, and give the builder reasonable access to investigate and repair. If you need Tarion's help, submit your claim within the set timelines [16].

Who decides whether a home qualifies?

HCRA sets which types of homes the new home warranty covers. Tarion can advise on whether a specific home is eligible [7].

Sources

1. Tarion, What is the new home warranty. https://www.tarion.com/homeowners/the-new-home-warranty (accessed October 23, 2026)

2. Tarion, Warranty coverage after you close. https://www.tarion.com/builders-guide-coverage-homes (accessed October 23, 2026)

3. Tarion, Coverage and claims before you move in. https://www.tarion.com/homeowners/pre-possession-coverage (accessed October 23, 2026)

4. HCRA, 2022 Annual Meeting summary. https://www.hcraontario.ca/?p=3328 (accessed October 23, 2026)

5. HCRA, Advisory: Common Definition of "Home". https://www.hcraontario.ca/?p=1164 (accessed October 23, 2026)

6. HCRA, Do I Need a Licence?. https://www.hcraontario.ca/do-i-need-a-licence/ (accessed October 23, 2026)

7. Tarion, What is not covered by the new home warranty. https://www.tarion.com/homeowners/what-is-not-covered (accessed October 23, 2026)

8. Tarion, Coverage and coverage limits after you move in. https://www.tarion.com/post-possession-coverage (accessed October 23, 2026)

9. Tarion, Warranty Information for Contract Homes (effective May 1, 2024). https://tarion.com/sites/default/files/Warranty%20Information%20for%20Contract%20Homes%20-%20effective%20May%201%202024.pdf (accessed October 23, 2026, effective May 1, 2024)

10. HCRA, Ontario Builder Directory backgrounder. https://hcraontario.ca/news-and-events/backgrounders/ontario-builder-directory (accessed October 23, 2026)

11. HCRA, Ontario Builder Directory resource page. https://www.hcraontario.ca/?p=5361 (accessed October 23, 2026)

12. HCRA, Your Guide to the Ontario Builder Directory. https://www.hcraontario.ca/?p=5420 (accessed October 23, 2026)

13. Building Dreams, Home Warranty and Aftercare. https://www.buildingdreamsinc.ca/our-warranty (accessed October 23, 2026)

14. Tarion, Regular claims process. https://www.tarion.com/regular-claims-process (accessed October 23, 2026)

15. Tarion, The Pre-Delivery Inspection. https://www.tarion.com/homeowners/pre-delivery-inspection (accessed October 23, 2026)

16. Tarion, Roles and Responsibilities. https://www.tarion.com/homeowner-roles-responsibilities (accessed October 23, 2026)