Freehold Homes
Illegal and unlicensed building activity is becoming a growing concern in Ontario’s pre-construction freehold housing market. Buyers are increasingly exposed to the risk of losing their entire deposits when projects are delayed, cancelled, or found to be illegally sold.
To address this issue, Tarion has introduced a new buyer notice requirement designed to improve transparency and protect purchasers earlier in the process.
What’s Changing as of July 1, 2025
Under Ontario Regulation 17/25, buyers of newly built freehold homes are encouraged to register their purchase agreement with Tarion within 45 days of signing.
This early notice allows Tarion to:
- Confirm that the builder is properly licensed
- Work with the Home Construction Regulatory Authority (HCRA) to detect illegal activity sooner
- Help ensure buyers qualify for maximum deposit protection
Registration can be completed online in just a few minutes.
Why Registration Matters
Beginning January 1, 2026:
- Buyers who register within 45 days will qualify for the full deposit protection limits
- Buyers who do not register on time will still have protection, but it will be subject to a $10 million annual sub-limit shared among all late registrants
If claims in a given year exceed that sub-limit, compensation for late registrants may be reduced proportionally.
Current Deposit Protection for Freehold Homes
Tarion’s deposit protection currently provides:
- Up to $40,000 for agreements signed before January 1, 2018
- For agreements signed on or after January 1, 2018:
- Up to $60,000 for homes priced at $600,000 or less
- 10% of the purchase price, up to $100,000, for homes over $600,000
Why This Change Was Needed
Unlike condominium purchases where deposits are held in trust, freehold home deposits are paid directly to builders, with no automatic third-party oversight. If a builder is unlicensed, becomes insolvent, or breaches the agreement, buyers face significant risk.
Requiring early registration helps regulators:
- Identify illegal builders sooner
- Protect buyers before deposits are lost
- Level the playing field for legitimate, licensed builders
Register within 45 days
If you are buying a newly built freehold home after July 1, 2025, registering your purchase agreement with Tarion within 45 days is a simple step that can make a significant difference in protecting your deposit.
This change does not affect condominium buyers or post-possession warranty coverage, but it represents a meaningful improvement in consumer protection for freehold purchasers.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com