How to Build a Custom Home in Ontario

Guide · Custom homes in Ontario · Toronto, Vaughan, Markham, Brampton and the GTA · Reading time about 8 minutes

Two regulators, two jobs. Knowing which is which protects you before you sign.

Building a custom home in Ontario involves two provincial bodies and your municipality. The Home Construction Regulatory Authority (HCRA) licenses and regulates new home builders and sellers. Tarion provides the new home warranty coverage and enrolment. Your municipality issues the building permit. This guide explains what each one does, what to check before you sign, and where to find the official information.

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Who regulates a custom home in Ontario?

HCRA’s own description is that it licenses and regulates new home builders and sellers in Ontario. Its website also points people to its Builder Directory, so you can check a builder’s licence before you commit. Tarion’s homeowner pages describe its role as providing warranty coverage for new homes, and they list deposit protection and warranty coverage before you take possession.

Tarion’s Qualification for Enrolment page says that anyone who plans to build and/or sell a new home in Ontario must be licensed by HCRA and must apply to Tarion to enrol the home in the warranty plan. It also says you must obtain an Enrolment Confirmation from Tarion for every new home you intend to build.

These are different jobs. A licence tells you the builder is regulated. The warranty tells you what happens if the home has defects after you move in. You need both, and you need to check both. Ask for both numbers early in the conversation. If a builder cannot give you either one, that is information in itself, and it is worth knowing before any money changes hands.

Next step: check the builder’s licence in the HCRA Builder Directory before you go any further.

What are the steps to build a custom home in Ontario?

A custom home has a clear order of steps. The diagram below shows where the regulators fit. It is a process diagram, not a timeline. Each project sets its own schedule.

How do I check a builder’s licence?

1. Find the builder’s name as it appears on the contract. Use the exact legal name, not only the brand name.
2. Search the HCRA Builder Directory. HCRA states that it licenses and regulates new home builders and sellers. Confirm the licence is current.
3. Note the licence number. Put it in the contract, so both of you refer to the same record.

HCRA also publishes a page titled “Do I Need a Licence?”, which answers whether a licence is needed in a given situation. Read it before you assume a licence is not required for your project.

What should a custom home contract include?

The contract is where most surprises start. Read the scope, the exclusions, the payment schedule, and the process for changes. A clear scope is the best protection you have.

1. Scope. What the home includes, room by room, and what it does not include.
2. Deposit. How much, when, and how it is protected. Tarion’s pages describe deposit protection before possession.
3. Changes. How a change is requested, priced and approved, in writing, before the work changes.
4. Permits. Who applies for the building permit, and what happens if it is delayed.

Is a custom home covered by a Tarion warranty?

Tarion’s Qualification for Enrolment page says that you must obtain an Enrolment Confirmation from Tarion for every new home you intend to build. Ask the builder for that confirmation, in writing, for your home. Ask the builder which warranty applies to your home, and read the coverage page for the details that matter to you.

Warranty coverage before possession is a separate protection. Tarion’s pages describe deposit protection, delayed closing or occupancy compensation, and financial loss compensation for contract homes. Ask how each one applies to your contract.

Next step: ask the builder for the Enrolment Confirmation for your home, in writing.

What affects the cost and the timeline?

The cost and the timeline depend on the design, the lot and its site conditions, the finishes you choose, and how many changes are made after the design is set. Each of these is a factor you can ask the builder to price in writing. This guide does not publish a price range, because we do not yet have a sourced figure to show you.

For the stages and where time is usually lost, read our guide on how long a custom home takes to build.

Ask your insurer and your lender what they require during construction, and ask the builder for proof of its insurance in writing before work starts.

What should I ask a custom home builder before I sign?

Before you sign, put these questions to the builder and keep the answers in writing. A builder who is licensed and registered will have the answers ready.

1. What is your HCRA licence number, and is it current? Check the answer in the HCRA Builder Directory yourself.
2. Is my home registered with Tarion, and where is the registration? Ask for the document, not only a yes.
3. What is included in the base scope, and what is an allowance? Allowances are amounts set aside for items you choose later. Ask how they are reconciled.
4. How are deposits held, and how does deposit protection apply to my contract? Ask for the terms before you pay.
5. Who applies for the building permit, and what happens if it is delayed? Ask for the permit number once it is issued.
6. How are changes priced and approved, and how do they affect the schedule? Ask for a written change order for every change.
7. Who is my point of contact during the build, and how often will I receive updates? Write down the answer and the method, such as email or a weekly call.

If a builder avoids these questions, or will only answer by phone, treat that as a reason to slow down.

What happens at handover and after?

Handover is not the end of the record-keeping. Walk through the home with the builder and note every item that needs attention, in writing, with dates and photos. Keep the handover documents, the warranty paperwork, and any correspondence about defects.

Tarion’s homeowner pages describe a claims process for new home warranty issues. Read it before you need it, so you know what to submit, where, and within what time. A written, dated record is the most useful thing you can bring to that process.

What documents should I keep?

Keep a single folder with the records that matter. You will need them if a question comes up during the build, at handover, or during the warranty period.

Which myths about custom home builders should I ignore?