Separate Vendor and Builder Process

In some cases the Vendor and Builder may be the same person or entity. In other cases the Vendor and Builder may be separate persons or entities working together.  Below is the process for separate Vendor and Builder entities who plan to work together to sell and build a home(s). See also Registrar Bulletin 10 for more detail on the application process. There are different versions of Registrar Bulletin 10 summarizing the Tarion application process to apply to sell and build Freehold Homes (Registrar Bulletin 10-FH), Contract Homes (Registrar Bulletin 10-CH), and Condominium Projects (Registrar Bulletin 10-Condo).  

It is important to understand the role of a Vendor and a Builder to ensure you are aware of the responsibilities of both.  

Vendor: A person or entity who, on their own behalf, sells a home not previously occupied to an owner. The Vendor is responsible for providing the owner with statutory warranty coverage.

Builder: A person or entity who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home.

Where the Vendor and the Builder are separate entities who plan to work together to sell and build a home(s), the Vendor (as the warranty provider) submits the application for QFE and/or Enrolment to Tarion, the Builder is NOT required to submit a separate application to Tarion for the same project.

Note: A licensee holding both Vendor and Builder licences can act as both the Vendor and Builder of the proposed project, or choose to retain a separate Builder. If a licensee holds only a Vendor licence, it must retain a separate licensed Builder for the proposed project.  

In the application for QFE submitted by the Vendor, the Vendor must indicate the name of the Builder who will build the proposed home(s). The Vendor is also required to provide a copy of the Construction Management Agreement which is executed by both the Vendor and the Builder. 

Tarion will reach out to the Builder separately to obtain a signed Builder Agreement if such agreement is not on file or has not been signed after February 1st, 2021. Tarion may also request the Builder provide a completed Guarantee & Indemnity Agreement.  

To assess the application for QFE, Tarion will consider the factors noted on different versions of Registrar Bulletin 10 under the “Application Review” subheading for both the Vendor and the Builder. If information about the Builder affects the Vendor’s application or the Terms and Conditions of QFE and/or Enrolment, Tarion will share that information with the Vendor. For example, if security is required because of the Builder’s lack of experience with the proposed type of construction or because of warranted defects in other homes built by the Builder, the reason for the required security will be explained to the Vendor. If there is any information that the Builder does not wish to be shared with the Vendor, they must let Tarion know at the time the information is provided, but this may result in the application for QFE being refused. 

After the application for QFE is finalized, the Vendor must, on behalf of the builder they have partnered with, enrol the home(s) through BuilderLink and obtain Enrolment Confirmation. The Vendor then shares the Enrolment Confirmation with the Builder to indicate that Tarion has authorized construction to commence.  The builder must not commence construction of a home before receiving enrolment confirmation for the home.  

Only the Vendor can offer or agree to sell the home(s) (i.e. offer or enter into a purchase agreement). Only the Builder can Commence Construction of the home(s) and act as the Builder throughout the course of construction. The Builder must have and maintain a licence with the Home Construction Regulatory Authority (HCRA) at the time of commencing construction of the home(s). 

Although the Vendor is the provider of the statutory warranties, the Builder’s performance in constructing the home(s) in compliance with the warranties will be tracked and considered by Tarion when assessing future QFE applications that involve the Builder.  

For additional information you can reach out to underwriting@tarion.com.