New construction is not simply “resale with a longer closing.” In Ontario, every builder and seller of a new home must hold a licence from the Home Construction Regulatory Authority (HCRA), and every new-home purchase carries statutory warranty and deposit protection through Tarion that does not exist on a resale file. You do not need either licence yourself to sell new construction as a real estate agent — but you cannot advise a client competently on the file without knowing exactly what those two regulators actually promise, and what they do not.
Key takeaways
The regulatory split in Ontario is easy to get backwards. The Home Construction Regulatory Authority states plainly that it is illegal to build or sell a new home in Ontario without a valid licence, and it licenses three categories: a builder of new homes must be licensed as a builder; a seller of new homes must be licensed as a vendor; and a builder who both builds and sells must hold a builder/vendor licence. A real estate agent representing a buyer or co-listing a project alongside a builder does not need an HCRA licence to do that job — your RECO registration governs your own conduct — but every builder or seller you deal with on a new-construction file must hold one, and it is worth confirming before you bring a client to the table. HCRA’s own FAQ page confirms the sequence explicitly: after obtaining an HCRA licence, a builder must still register with Tarion and receive its authorization before they may legally build or sell a new home. HCRA licences run for 12 months from issue, with a reminder sent 60 days before expiry and a 30-day window to submit the renewal application on the Builder Portal.
Tarion’s statutory warranty is the single biggest practical difference between a new-construction file and a resale one, and the coverage is not open-ended. On deposit protection, coverage for purchase agreements signed on or after January 1, 2018 depends on price: if the home is priced at $600,000 or less, the purchaser’s deposit is protected up to $60,000; above $600,000, protection is 10% of the purchase price to a maximum of $100,000. Since January 2018, that protection extends beyond the raw deposit to other pre-closing payments such as upgrades and extras — though not to a payment made simply to hold a unit before a purchase agreement is signed. Condominium deposits, which must be held in trust under the Condominium Act, carry Tarion protection of up to $20,000 plus a limited amount of accrued interest, and a builder who terminates a purchase agreement must return the deposit in full within 10 days. On delayed closings, the warranty caps compensation at $7,500 in total — made up of $150 per day in direct living expenses (no receipts required for that portion) plus any receipted moving or storage costs — and that clock stops only for an agreed extension or an unavoidable delay such as a strike, fire, or declared emergency, which the builder must document and disclose. None of this applies to owner-built homes: HCRA’s own guidance confirms that a person building on land they own, for their own use, may not need a builder’s licence at all — but that home carries no Tarion warranty coverage whatsoever, which is a material fact to raise with any client considering that route.
HCRA’s working definition of a new home is a self-contained dwelling that has not been previously occupied, is built for residential use, can be occupied year-round, and is affixed to a permanent foundation — and ordinary renovations or upgrades to an existing home do not turn it into a “new home” for licensing purposes. That distinction matters most at the edges of a practice: a substantially renovated resale, a custom home built on a client’s own lot, and a builder-constructed spec home on land the builder owns are not treated identically, and the licence category attached to each is different.
Before writing an offer on a new-construction file, three things are worth confirming and documenting for your own file, not just telling the client verbally: that the builder or seller holds a current HCRA licence (searchable through the Ontario Builder Directory HCRA maintains); that the specific project is registered and authorized with Tarion, which is the step that actually activates warranty and deposit protection; and, for a purchase priced above $600,000, that the client understands their deposit protection is a percentage cap rather than a full-value guarantee. None of this replaces a lawyer’s review of the purchase agreement itself — but an agent who can walk a client through these two regulators accurately, before the lawyer ever sees the file, is doing the part of the job that is genuinely yours to do.
A pre-construction deal moves on a different rhythm than a resale one. Between a signed purchase agreement and an occupancy or closing date, a client can wait months or years, during which financing conditions, personal circumstances, and even the building itself can change — an assignment clause, a spec change, or a delay notice can all surface long after your commission would ordinarily have been earned and paid on a resale file. That is not a reason to avoid the specialty; it is a reason to set expectations early, keep a client’s file organized well past the offer stage, and treat the eventual closing as the point where the relationship actually gets tested, not the point where your role ends. Agents who build a genuine new-construction practice tend to do it by staying close to two or three builder relationships over years rather than chasing every project that comes to market, precisely because the licensing and warranty landscape rewards knowing one builder’s process in depth over knowing many superficially.
Related: see adding rural and farm work, building a newcomer client base and the national licensing picture.
No. HCRA licenses the builder or vendor — the entity actually building or selling the home. Your own authority to trade in real estate comes from your RECO registration. What you do need is the discipline to confirm the builder or vendor you are working with actually holds a current HCRA licence before bringing a client to the deal.
No. Tarion's protection is capped by price band — up to $60,000 on a home priced at $600,000 or less, or 10% to a $100,000 maximum above that, and up to $20,000 on a condominium unit. A high-value freehold purchase can therefore have a meaningful gap between the deposit paid and the amount actually protected, which is worth flagging before a client wires a large deposit.
Tarion's warranty entitles the purchaser to compensation, capped at $7,500 total, made up of $150 per day in direct living expenses plus any receipted moving or storage costs — unless the delay falls under an agreed extension or a documented unavoidable delay such as a strike or declared emergency.
A short conversation can map what to verify on a builder file before your first pre-construction deal.
