TORONTO — The company that administer Ontario’s home warranty program says buyers of new homes will soon have greater deposit protection with a new policy and regulation expected to come into force next year.
Tarion Warranty Corp. is proposing to increase deposit protection for houses from the current $40,000 to 10 per cent of the purchase price, from a minimum of $60,000 to a maximum of $100,000.
This means that houses with a purchase price below $600,000 will have up to $60,000 in coverage.
Deposits are typically around five per cent of the selling price of a home, although they can range higher in hot real estate markets.
The changes will bring the amount covered into better alignment with the province’s home prices.
According to the Toronto Real Estate Board, the average selling price in the Greater Toronto Area in September was $775,546.
Tarion says deposits for condominium dwelling units are not part of the proposed changes because condominium dwelling units already enjoy significant protection.
The company says the new deposit protection coverage is expected to be in place in January 2018.
The proposed policy and draft regulation, which will be considered on Dec. 14, is posted on Ontario’s Regulatory Registry for 45 days.
The proposed changes stem from a provincial omnibus bill that legislated reforms in Tarion’s structure and mandate, including separating the provider of Ontario’s warranty program for new homes from the body regulating new home builders.
The Canadian Press