Condo deposit protection — held in trust under Condominium Act s.81; Tarion backs up $20K if trust fails

Claim: Condominium deposits are protected differently from freehold deposits. Under s. 81 of the Condominium Act, 1998, condo deposits up to a defined project threshold must be held in trust by the builder. Amounts above that threshold must be covered by a Tarion deposit-insurance certificate. If a deposit that should have been in trust was not, Tarion provides up to $20,000 of backup protection.

Source: https://www.tarion.com/homeowners/pre-possession-coverage

Confidence: Verified.

If the APS is terminated: the deposit must be returned in full within 10 days.

No change in April 2026: the upcoming O. Reg. 17/25 deposit changes apply to freehold only. Condo deposit protection is unchanged. See O. Reg. 17/25 freehold deposit change — from April 1, 2026, buyers must notify Tarion within 45 days of signing to qualify for full coverage; tier change deferred to Jan 1, 2027 for context.

Why this matters for buyer-facing content: Many pre-construction condo buyers assume Tarion fully protects their entire deposit. The truth is more nuanced — most of the deposit is protected by the trust mechanism (which Tarion does not administer), with Tarion as a $20K backup. Strong marketing copy distinguishes the two.