Blog

A boutique Toronto law firm serving
clients across Canada since 1987

Jan 11, 2017

Greater deposit protection to weather real estate disputes

Purchasing a home can be a challenging process with many financial risks. Warranties on home deposits have caused many real estate disputes in Ontario. Tarion Warranty Corporation, which provides these protections, has announced that new regulations will give home buyers more protection on these deposit amounts. The regulations are expected to come into force next year.

Currently, deposit protection is capped at $40,000. Tario Warranty Corp. wishes to increase this protection to 10 per cent of the purchase price, with a minimum of $60,000 and a maximum of $100,000. They say this expanded coverage will be better aligned to the increasing prices of Ontario property. This will help protect consumers and weather real estate disputes around deposit amounts and coverage.

The average selling price in the Greater Toronto Area was $775,546 in September. Currently, deposits are around five per cent of the selling price but can increase with competitive markets. Tarion Warranty Corp. expected the proposed policy to be in place January 2018. It will affect all purchasing homes with the exception of condominiums, which already have significant protection's.

This change stems from a provincial bill that required the Ontario warranty corporation to reform its structure and mandate. The bill also requires warranty programs and home builder regulations to be provided by separate bodies. Provincial and municipal laws often undergo regulation changes, so it is important that those looking to purchase or sell property remain aware of the current system. The best way to avoid or navigate real estate disputes in Ontario is to speak with a lawyer.

Source: bnn.ca, "Greater deposit protection coming for new Ontario homebuyers in 2018: Tarion", Oct. 24, 2017