What is a Tarion Warranty Bond?
The Tarion Warranty Bond, also known as a Tarion Marketing Bond, is a type of surety bond that provides financial security for the development of condominiums.
The Ontario government legislation requires developers of new condominium projects to provide the Tarion Warranty Corporation with security to protect the purchasers’ interests.
Usually in the amount of $20,000 per unit, this security is provided to protect purchasers’ deposits as well as to ensure the warranty protection required is adhered to.
Tarion Bond Timeline
Tarion in each stages of Condominium Development:
Prior to the commencement of sales, security must be provided to Tarion either in the form of cash, a letter of credit or a Tarion Marketing Bond.
The bond once posted remains in place throughout the duration of the project. All purchaser deposit must legally be held in trust for the benefit of the purchaser in the event of a project default by the developer. However, FCA offers Condominium Deposit Insurance for our developers allowing you to access these deposits for the purchase of funding soft and hard costs.
Once a condominium is registered, Tarion will typically hold $20,000 per unit as security for the warranty period for a minium of 1- 2 years. Should a registered condominium owner submit a claim under Tarion, the developer will still be required to respond to the claim and if it fails to respond Tarion can make a claim against this bond.
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Frequently Asked Questions
Who are the Tarion Warranty Corporation?
Tarion Warranty Corporation is a non-profit organization that was established in 1976 by the Ontario New Home Warranties Plan Act. It ensures that builders abide by the act and steps in to protect consumers when developers fail to perform their obligations.
Is a Tarion Bond mandatory?
A Tarion Bond is not mandatory, but developers benefit from this type of bond because it eliminates the need to post a letter of credit or cash security.
How do I apply for a Tarion Warranty Bond?
Please go to our Contact-us page for a free consultation.