A homeowner in Kanata called us last fall, panicked. Her contractor had vanished mid-project after collecting a large deposit. She wanted to file a Tarion claim. The unfortunate answer: Tarion does not cover renovations of existing dwellings. She had spent the deposit, and that money was gone unless she could chase the contractor in Small Claims.
Most Ontario homeowners assume Tarion covers any home. It does not. The rules are specific, and getting them wrong before you sign a contract can leave you completely exposed.
What Tarion Actually Is
Tarion (officially the Ontario New Home Warranties Plan Corporation) is the not-for-profit administrator of Ontario's statutory new-home warranty under the Ontario New Home Warranties Plan Act. Every new home built in Ontario by a registered builder is covered by Tarion.
Tarion is funded by builder enrolment fees, not by tax dollars. Tarion handles claims when builders default and pursues defective builders for repayment. As of 2021, Tarion's regulatory function was split out into the Home Construction Regulatory Authority (HCRA), which licenses builders. Tarion now focuses on warranty administration.
The Default Rule: Renovations Are Not Covered
Section 1 of the Ontario New Home Warranties Plan Act defines a "home" for warranty purposes. The Act applies to:
- A new self-contained one-family dwelling
- A new building containing not more than two self-contained dwelling units used for residential occupancy by the owners
- A condominium dwelling unit
The key word is new. A kitchen renovation, a bathroom remodel, a basement finish, or even a sizeable rear addition on an existing house is not a "new home" under the Act. Tarion does not cover it. The contractor doing the work is not required to be Tarion-registered.
If your contractor disappears mid-project, your remedies are:
- Civil suit (Small Claims Court up to its monetary limit, Superior Court above)
- Lien claim against the property under the Construction Act
- Insurance if your contractor carried surety or completion bonds (most do not on residential)
- WSIB and CRA reporting if appropriate
The Exceptions: When a Renovation Triggers Tarion
Two scenarios pull a renovation back under Tarion's umbrella.
1. Substantial Reconstruction (the 50% Rule)
If you remove and rebuild more than 50% of an existing dwelling, the result may be deemed a "new home" under the Act. The threshold the regulator applies looks at:
- Percentage of structural framing replaced
- Percentage of foundation replaced or new
- Whether the result is materially a new building on the same footprint
A typical second-storey addition on a bungalow that adds 90 m² to a 100 m² ground floor often hits this threshold, especially when combined with foundation underpinning, wall reframing, and a new roof. Your builder needs to be Tarion-registered for that scope.
2. Major Additions (the Addition Rule)
Section 13 of the Act extends warranty to additions to existing homes when:
- The addition adds new habitable floor area
- The addition is built by a vendor who agrees to enrol the work with Tarion
This second condition is key. The builder must opt in. Most renovation contractors are not Tarion-registered and will not enrol additions. A few specialty design-builders do offer Tarion-enrolled additions, and they price the enrolment fee into the contract.
The honest renovation contractor's position
If your project is a kitchen, bathroom, basement, single-room addition, or any work where the original structure remains, Tarion does not apply. Anyone who tells you otherwise is misinformed or selling fiction. Ask the contractor for their HCRA licence number and Tarion enrolment number. If they cannot produce both, the project is unenrolled.
What Tarion Covers When It Does Apply
For a Tarion-enrolled new home or major addition, the warranty has four layers:
Deposit Protection
Deposits paid to a builder are protected up to Tarion's statutory limit if the builder defaults before closing. Coverage is automatic on enrolled builds; confirm the current cap on tarion.com.
One-Year Warranty
From the date of possession, the builder warrants:
- Construction is free from defects in material and workmanship
- Construction is fit for habitation
- The home complies with the Ontario Building Code
- No unauthorized substitutions of finishes or fixtures
Two-Year Warranty
From possession, two years on:
- Water penetration through the basement or foundation walls
- Defects in materials or work that result in detachment, displacement, or deterioration of exterior cladding
- Defects in plumbing, electrical, or heating delivery and distribution systems
- Major structural defects (also covered under year-7 warranty)
- Health and safety violations of OBC
Seven-Year Warranty
From possession, seven years on major structural defects: defects in load-bearing portions of the home that affect its load-bearing function or that materially affect the use of the home for the purpose intended.
This is the long-tail coverage that justifies Tarion enrolment fees on new builds. Foundation cracks, structural framing failures, and major settlement issues are covered for seven years.
How a Tarion Claim Actually Works
If you have a covered defect, the process is:
- Notify the builder. Always start here. Most defects are resolved between owner and builder without involving Tarion.
- Submit a Statutory Warranty Form. Tarion provides forms at 30-day, 1-year, and 2-year milestones for you to list defects.
- Builder repair window. The builder has a defined period (usually 120 days from receipt) to repair listed items.
- Tarion conciliation. If the builder does not repair, Tarion sends a conciliator to inspect. The conciliator's decision is binding subject to dispute.
- Tarion repairs. If the builder still refuses, Tarion repairs and bills the builder.
- License Appeal Tribunal. Either party can appeal Tarion's conciliation findings to the LAT.
Vendor Registration: How to Verify Yours
Before signing any new-home or Tarion-applicable contract:
- Go to tarion.com and click "Find My Builder"
- Search by builder name or registration number
- The page shows licence status, history of homes enrolled, and any past claims or chargebacks
- Cross-reference with the HCRA Public Registry for licence standing
An unregistered builder cannot legally sell a new home in Ontario. If a "builder" offers to sell you a new home without Tarion enrolment, that is illegal under Section 6 of the Act and exposes you to losing your deposit with no protection.
"The most painful Tarion calls we field are from people who paid a large deposit on a 'new home' to someone who turned out to be unregistered. The deposit was lost the moment it was paid."
What This Means for Your Ottawa Project
If you are planning:
- Kitchen, bathroom, or basement renovation: Tarion does not apply. Your protection is the contract, deposit terms, lien rights, and your contractor's reputation. Ask for references and verify HCRA licence even though Tarion does not enrol the work.
- Rear addition under 30 m², second-storey under 50% rebuild: Tarion likely does not apply. Same protections as above.
- Major addition over 50% rebuild, new coach house, or new infill build: Tarion may apply, and you should require it. The builder must be Tarion-registered before you sign.
- Buying a brand-new home or condo: Tarion is mandatory. Verify the enrolment certificate before closing.
Our Position on Tarion
Dream Touch Renovations is a renovation specialist (kitchens, bathrooms, basements, additions). The vast majority of our work is on existing dwellings and is not Tarion-eligible. We are transparent about this in every contract.
What we do offer:
- One-year written workmanship warranty on every project
- Commercial liability insurance and WSIB coverage
- Itemized fixed-price contracts with milestone deposits, not lump-sum-up-front
- HCRA licence verification on file
- BCIN-certified design oversight
If your project crosses the 50% rebuild threshold or involves new coach-house construction where Tarion does apply, we will tell you up front and route the build to a Tarion-registered partner. Contact us at 613-862-4555 for a feasibility review and an honest assessment of which warranty framework applies.
Frequently asked questions
Does Tarion cover home renovations in Ontario?
No. Tarion does not cover renovations of existing dwellings. The Ontario New Home Warranties Plan Act applies to new homes: a new one-family dwelling, a new building with no more than two units occupied by the owners, or a condominium unit.
A kitchen, bathroom, basement finish, or even a sizeable rear addition on an existing house is not a new home under the Act, and the contractor doing that work does not have to be Tarion-registered.
What can I do if my renovation contractor disappears with the deposit?
When a renovation contractor disappears mid-project, Tarion cannot help, because work on an existing home is not covered.
The remedies are a civil suit, in Small Claims Court up to its monetary limit or Superior Court above it, a lien claim against the property under the Construction Act, a claim on surety or completion bonds if the contractor carried them, which most residential contractors do not, and WSIB and CRA reporting where appropriate. For renovations, the real protection is the contract and its deposit terms.
When does a renovation or addition fall under Tarion?
A renovation falls under Tarion in two cases. The first is substantial reconstruction: removing and rebuilding more than 50 percent of an existing dwelling may make the result a new home under the Act, judged on how much framing and foundation is replaced.
A second-storey addition on a bungalow with underpinning, reframing and a new roof often crosses that line. The second is an addition that adds habitable floor area, built by a vendor who agrees to enrol it with Tarion.
What does the Tarion warranty cover, and for how long?
A Tarion-enrolled new home or major addition carries four layers of coverage. Deposit protection covers deposits up to the statutory limit if the builder defaults before closing. The one-year warranty covers defects in materials and workmanship, fitness for habitation and Building Code compliance.
The two-year warranty covers basement water penetration, cladding defects, and plumbing, electrical and heating system defects. The seven-year warranty covers major structural defects such as foundation cracks and framing failures.
How do I file a Tarion warranty claim?
A Tarion claim starts with the builder, since most defects are settled between owner and builder. Next, list the defects on a Statutory Warranty Form, which Tarion provides at 30 days, one year and two years. The builder then has a set window, usually 120 days from receipt, to repair the listed items.
If repairs do not happen, Tarion sends a conciliator whose decision is binding subject to dispute, and either party can appeal to the License Appeal Tribunal.
Official references
- Who can do electrical work at my property?, Electrical Safety Authority