Glossary for Builders

Application for QFE and/or Enrolment: The application that a licensed Vendor submits to Tarion outlining information about their proposed sales and construction plans. Tarion generally responds to the application with a Notice of Proposal (NOP) of Conditions, which outlines Terms and Conditions that must be satisfied by the applicant to obtain QFE Confirmation and Enrolment Confirmation. Note that where a Vendor is working in partnership with a separate Builder to Sell/build homes, the Vendor is responsible for submitting the application.
 

Builder: A person who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home whether for the purpose of sale by the person or under a contract with a vendor or owner. 

BuilderLink: Tarion’s online portal where licensed Vendors can submit an Application for QFE and/or Enrolment.
 

Builder Agreement: The Builder Agreement sets out the obligations of the Builder – the person who will be building homes under a contract either with a licensed vendor or with a consumer landowner wanting to have a contract home built on their land.
 

Commence Construction: The commencement of construction of foundation components or elements (such as footings, rafts or piles) for the home.

Condominium: Sales and construction plans that, generally speaking, involve the Condominium Act or a Condominium corporation. Subtypes include: high-rise Condominiums with Part 3 Ontario Building Code requirements; low-rise Condominiums without any Part 3 Ontario Building Code requirements; vacant land Condominiums, and common element / parcel of tied land Condominiums.
 

Condominium Project Profile Form: If you are proposing to build or sell a condominium project, you are required to submit a Condominium Project Profile Form with the Application for Qualification for Enrolment and/or Enrolment. 
 

Contract Home: A single-family home built under Part 9 of the Ontario Building Code that is not tied to a Condominium (vacant land or a common elements corporation), where the purchaser owns the land, and contracts with a Vendor/Builder to construct the home under a freehold contract.
 

Deposit Trust Agreement: The Deposit Trust Agreement applies if you are: (1) proposing to sell or build three or more freehold homes in a single location, either at the same time or consecutively, as a single coordinated undertaking; and (2) the purchase agreement for any of the homes includes an early termination condition premised on either or both of (i) the vendor reaching a specific sales threshold or (ii) the vendor receiving satisfactory financing to sell/build the home. Refer to section 1 (c) of Schedule “A” in the following versions of the Addendum for more details: Freehold Form (Tentative Closing Date), Freehold Form (Firm Closing Date), Limited Use Freehold Form (Tentative Occupancy Date – POTL/CEC), Limited Use Freehold Form (Firm Occupancy Date – POTL/CEC).

Enrolment Confirmation:The written authorization that a Builder must obtain from Tarion for each home before the Builder is permitted to Commence Construction of the home.
 

Freehold Home: A single-family home built under Part 9 of the Ontario Building Code that is not tied to a vacant land Condominium or a common elements Condominium corporation, where the Vendor owns the land, constructs the home and Sells the home via a freehold Agreement of Purchase and Sale.
 

Guarantee and Indemnity: The Guarantee and Indemnity is a binding contract between you and Tarion. By signing the Guarantee and Indemnity you agree to guarantee the payment and performance of a vendor/builder's obligations to Tarion for homes covered by the warranties.
 

Interested Persons: An individual, corporation, or other entity who may exercise control over the operations of a licensed Vendor or Builder, or who has a beneficial interest in the operations of the licensee (in terms of beneficial ownership, or that they stand to benefit from the profits of the licensee). The Interested Person’s influence may be the result of direct or indirect authority and/or financial control over the business. Examples include but are not limited to directors, officers, principals, or partners of a licensee.
 

Notice of Proposal (NOP) of Conditions: The written document that Tarion sends a Vendor outlining the proposed Terms and Conditions that they must satisfy to proceed with their construction and sales plans.
 

Personal Net Worth Statement: An individual who signs a Guarantee and Indemnity is required to provide a Personal Net Worth Statement with supporting documentation. By signing the Personal Net Worth Statement, you declare that the information provided is true and correct.
 

Project: In the freehold context, “Project” is a term that Tarion may use in discussions with you to refer to a grouping of homes that you seek to Sell and build.

Qualification for Enrolment (QFE) Confirmation: The written authorization that a Vendor must obtain from Tarion for each home before the Vendor is permitted to offer or agree to Sell the home.
 

Registrar Bulletins: Policies published by Tarion containing information and rules about various matters related to the statutory warranty program. Compliance with these Bulletins is a legislated requirement, and a requirement under the Vendor Agreement and Builder Agreement. The Registrar Bulletins also form part of the Terms and Conditions outlined within the Notice of Proposal (NOP) of Conditions.
 

Risk Assessment: A profile that Tarion develops for a Vendor after reviewing their Application for QFE and/or Enrolment. The profile is used for underwriting purposes to determine whether, and on which Terms and Conditions, a Vendor/Builder’s proposed sales and construction plans should be authorized. A Risk Assessment considers factors relating to the Vendor/Builder and their Interested Persons, including their past and present conduct and financial status (eg. financial equity, experience, and Tarion history). The security-related aspects of the Risk Assessment are outlined in Registrar Bulletin 11-FH.
 

Sell: Includes entering into an agreement to Sell.
 

Tarion Application Process: The process whereby a Vendor applies to Tarion to Sell a home (Qualification for Enrolment (QFE) Confirmation), or to build a home (Enrolment Confirmation).
 

Terms and Conditions: Requirements that a Vendor and/or Builder must satisfy in order to obtain, and continue to maintain, QFE and Enrolment Confirmation from Tarion. Some Terms and Conditions are legislated under the Ontario New Home Warranties Plan Act and apply equally to all Vendors and Builders. Some Terms and Conditions are proposed by Tarion on a case-by-case basis for a given Vendor or Builder.
 

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

Vendor Agreement: The Vendor Agreement sets out the obligations of the Vendor – the person who will be entering into sales of homes (land and dwelling) or agreeing to build a home on a person’s land under a construction contract. The Vendor is primarily liable for performance of the deemed statutory warranties provided by the vendor to homebuyers under the New Home Warranties Plan Act.
 

Vendor and Builder Agreement: The Vendor and Builder Agreement sets out in one document the obligations of the Vendor and of the Builder. This can be used where the person signing the document is either: i) a vendor who proposes to offer to sell, agree to sell or sell one or more new homes and is also the person who proposes to build such homes; or ii) a contract home builder who proposes to enter into a construction contract with an owner to build a new home (and as such is also a vendor).