Tarion Warranty Bonds

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What is a Tarion Warranty Bond?

The Tarion Warranty Corporation (“Tarion”) is a not for profit corporation 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 under the Act. All residential developers must be registered with Tarion to build and sell condominiums in Ontario.

Tarion requires that all condominium developers post security in order to protect the purchaser’s interests prior to the sale of condominium units for all projects. A minimum amount of $20,000 per unit must be provided to Tarion to protect purchaser’s deposits as well as provide the warranty protection required by Tarion; however, Tarion will often require a higher per unit amount from newer or less experienced developers.

To put it into context, if you are building a 200-unit condominium, at a $20,000 per unit risk assessment, you would be required to post $4 million dollars in security to Tarion.

Tarion Bond Timeline


  • Marketing Stage

    Prior to the commencement of sales for all condominium project, security must be provided to Tarion either in the form of cash, a letter of credit or a Tarion Marketing Bond.

  • Construction Stage

    The bond once posted remains in place throughout the duration of the construction of the project.

  • Warranty Stage

    Once a condominium is registered, Tarion will typically hold the full amount of $20,000 per unit as security for the warranty period for a minimum of 1- 2 years.

How much does a Tarion Marketing & Warranty Bond Cost?

The cost of a Tarion Bond depends on multiple factors including but not limited to:

  • the size of the project
  • the experience of the developer
  • the team supporting the project including the builder, lender, cost consultant and lawyer
  • the deemed viability of the project

Generally speaking though, Tarion Bond rates can be as low as 0.5% up 1.25% annually for newer or less experienced developers on smaller projects. As an example, for a 100 unit condominium with a $20,000 per unit Tarion risk assessment, the developer would be required to a post s surety bond in the amount of $2,000,000 (100 units * $20,000). At a rate of 0.75% annually the annual surety bond cost would be $15,000. There is also commonly a one-time commitment fee ranging from $2500 to $10000. The bond will be required by Tarion prior to the commencement of sales, will remain in place during construction and will often be held for 1-2 years post registration of the project.

FCA is Canada’s Tarion Bond Expert

FCA has been providing Canadian companies with tarion bonds for the past two decades. We have set the industry standard for turnaround time for both new and existing clients. We pride ourselves in ensuring our clients never miss a sales launch date.


The 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. All residential developers in Ontario with active projects must be registered with Tarion.

In April 2018, the Home Construction Regulatory Authority (HCRA) was incorporated as a not-for-profit corporation. HCRA is expected to regulate builders and vendors of new homes if it is designated as the regulatory authority under the New Home Construction Licensing Act, 2017 (NHCLA). Tarion will continue to be the warranties and protections administrator for new homes in Ontario under the Ontario New Homes Warranties Plan Act. If passed, these changes are expected to take effect on February 1, 2021, at which time HCRA would begin its regulatory operations.

Applying for a Tarion bond is quite similar to applying to development financing company for project funding. The documents required are as follows:

  • Most recent year-end financial statements for the development company
  • Standard form condominium docs (should include a copy of the Standard Purchase & Sale Agreement including Completed Tarion Statement of Critical Dates and Disclosure Statement)
  • A copy of the project budget including hard and soft costs
  • A copy of the construction financing agreement or letter of intent
  • A copy of the Tarion Terms and Conditions of Registration letter, also known as a Tarion Risk Assessment letter
  • Land title details and appraisal if available
  • Any Environmental Audits and Geotechnical Report
  • A completed Developer Surety Application
  • A completed Personal Net Worth statement for each of the project shareholders

We highly recommend you work with an experienced Developer Surety brokerage such as FCA to ensure you are receiving the possible best terms for your project.

Yes we do. All of our projects are offered this product in conjunction with their Tarion Marketing & Warranty bond. Please visit our Deposit Financing page to learn more.

As a long-standing surety brokerage we have excellent working relationships with all of the surety companies currently writing developer surety business in Canada. Our key partners include:

  • Intact
  • The Guarantee Company of Canada (GCNA)
  • Trisura Guarantee
  • Travelers
  • Sovereign Insurance
  • Berkely

We know these companies well and understand their underwriting philosophies and principles. This is very important as no two sureties are alike. By understanding the appetites of each company, we are able to place our developer clients with the right surety partner. This ensures not only excellent terms but also a long-standing relationship that supports the growth and flexibility that our developers demand.

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 Tarion.

Why Choose FCA Surety?

Ease of Doing Business

We set the industry standard for turnaround time for both new and existing construction bond clients, you can expect excellence.

Trusted by Surety Markets

Outstanding relationships with all of the most reputable construction surety bond markets in the industry, giving you the power of choice.

Surety is What We Do

Our industry-leading team boasts seven full time dedicated surety professionals with a combined 80+ years of construction surety bond experience.


Our organization has been working with FCA Surety Bonds and Insurance for over 2 years. The team, led by Jamie Collum and Warren Griffiths, exceeds expectation in service, responsiveness and knowledge.


Jamie and Mike from FCA did a great job in assisting me throughout the process. Not only from the bonding requirement with Tarion but also other aspects relating to obtaining project approvals and project insurance. Would definitely highly recommend them.


FCA is one of the best companies we have had the pleasure of working with so far. Very professional, fast and always on time. Looking forward to continue working with them.


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It all starts with a conversation today with one of our surety bonding experts. Once we determine which type of surety bonds you require, we will work tirelessly to expedite these bonds for you.

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