What is a pre-delivery inspection and what does Tarion actually cover?

The pre-delivery inspection, or PDI, happens shortly before you take possession. You walk through the home or unit with a builder representative and record every deficiency you see: missing fixtures, damaged surfaces, doors that don't close right, anything not finished or not working. This becomes your official record for warranty purposes, so be thorough and get a copy before you leave. Items you don't note at the PDI can still sometimes be claimed later, but it's harder without that first record.

Ontario's new home warranty runs in stages (as of 2026):

• Year 1: the broadest coverage. The home must be fit to live in, built to the Ontario Building Code, and free of defects in work and materials.
• Year 2: narrower coverage, focused on things like water penetration, electrical, plumbing, and heating defects, and building code violations affecting health and safety.
• Years 3 to 7: coverage narrows again to major structural defects only, like serious foundation or load-bearing problems.

You submit claims through Tarion's own forms within set deadlines tied to each coverage period, not whenever you happen to notice something.

Builders can push back your closing date within limits set by your agreement and Tarion's rules. If the delay goes beyond what your contract allows, or your closing is delayed without proper notice, Tarion's delayed closing coverage includes compensation of up to $7,500 in total, including $150 a day for living expenses, on top of any deposit protection. The exact compensation depends on your specific agreement and notice given, so keep every piece of paperwork from the builder about your closing date.

With a pre-construction condo, you often move in before the building is legally registered as a condominium. During this interim occupancy period, sometimes called phantom rent, you pay the builder a monthly occupancy fee covering estimated property taxes, common expenses, and interest on your unpaid balance, but you don't hold title yet. You start paying your mortgage and actually close, transferring title into your name, only once the building registers.

Tarion protects new home deposits up to set limits (as of 2026): freehold homes up to $60,000, or 10% of the price to a maximum of $100,000 on homes over $600,000; condo units up to $20,000. For now (September 2026), registering with Tarion doesn't change your deposit coverage: Tarion has deferred that effect to January 1, 2027. From then, freehold buyers who registered within 45 days of signing their agreement keep the maximum deposit coverage; later or unregistered purchases are covered through a separate fund with an annual cap. Tarion has asked freehold buyers to register since April 1, 2026, so it's worth doing now. Condo purchases aren't affected by the registration requirement.