A website created by Ontario consumer protection non-profit Tarion will allow new homebuyers to verify if they are dealing with builders in good standing and alert Tarion to potentially illegal activity.

After buying a new freehold home, Ontarians can register their agreement of purchase and sale for no cost with Tarion and submit information including the name of the builder and whether they are making a deposit on the home. Next, Tarion will cross-reference its directory of licensed builders to check if the builder is authorized to sell homes.

If red flags are raised, Tarion can swiftly respond with its law enforcement partner and inform the buyer about their coverage.

“Bringing the consumer into the picture, engaging them in this way with what I think is a very common sense step to take, I think is going to be a game changer,” Peter Balasubramanian, president and CEO of Tarion, told RENX Homes in an interview.

To incentivize prompt registration, homebuyers may not be eligible for maximum deposit coverage if they do not register their purchase with Tarion within 45 days, effective in January 2026. The law will apply to all purchase agreements signed on or after July 1, 2025.

A grace period will take place from July to December so the market can adjust to the new rule.

Tarion is an independent organization that administers the Ontario New Home Warranties Act & Regulations, the province's mandatory builder’s warranty.

Illegal home buying, selling important to address

Though it is difficult to place numbers on the frequency of the practice because so much of it is done underground, Balasubramanian said building and selling homes illegally is a serious problem with significant consequences.

Buyers can lose tens of thousands of dollars in deposits if an unlicensed builder goes bankrupt. It also undermines the integrity of the homebuilding industry with shoddily constructed, unsafe projects and creates an uneven playing field, as illegally operating builders avoid the carrying costs of complying with the law.

A notable recent case involves Woodbridge, Ont.-based StateView Homes, which has been charged by the Home Construction Regulatory Authority (HCRA) for illegally selling 453 homes, exceeding the amount it was authorized to sell.

Another instance involves Sunrise Homes, which went into bankruptcy leaving over 100 Central Ontario homebuyers facing the loss of their deposits for new homes.

The traditional approach to tackling unlawful home building is enforcement and deterrence, Balasubramanian said, with actions like the HCRA investigating cases and laying charges, and informing the public about the allegations.

But the ability to preemptively catch illegal activity is limited through these means, a gap which Tarion is looking to cover with its online portal.

“If there’s anything that raises any red flags, we can act on it immediately. We also have the ability to reach out to you, and let you know exactly what your coverage is,” Balasubramanian said. Tarion can then inform the HCRA to investigate the builder and prosecute if necessary.

If even one buyer had registered their purchase from StateView Homes, he believes the alleged misconduct could have been caught much sooner.

Other advice on avoiding illegal activity

An easy way to check if home builders and sellers are operating within the law is for Ontarians to search for their builder on the Ontario Builder Directory to ensure the company is licensed, Balasubramanian said.

Other tips include getting all commitments in writing and consulting with lawyers and real estate professionals throughout the homebuying process.

If asked by the builder to put in a deposit, Balasubramanian advises homebuyers to ask how much of the deposit is covered by a warranty program. For extra protection, he recommends discussing if the deposit could be paid into a trust or doled out in instalments.