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It is important that you consult an Ontario real estate lawyer, as Ontario real estate laws and regulations change frequently. Buying a new home/condominium in Ontario, Canada can be a challenge.
You should consider many factors at this time, including the stage of the condominium development and the level of experience and knowledge of the builder you choose. Things to consider are outlined below:
When you enter into an agreement of purchase and sale with the builder of a newly built home/condominium, a cooling-off period of 10 days applies if you are buying a condominium unit. During this period you may cancel the agreement by giving written notice. The 10 days start once you have received the disclosure statement, the Condo Buyers’ Guide and a copy of the agreement signed by both parties. A similar 10-day cooling-off period for newly built freehold homes is scheduled to apply to agreements signed on or after January 1, 2027. Any caps on charges should be negotiated during this period. If no action is taken to cancel the contract during the cooling-off period, the agreement of purchase and sale becomes a binding agreement. It is recommended that the agreement be reviewed by an Ontario real estate lawyer to confirm when the cooling-off period will begin.
When purchasing a home/condominium in the pre-construction phase, it may be many years before you move into it. Even after you move in, you may not yet be the owner of your new home. The time between the date you take occupancy of a condominium unit and the date ownership is actually transferred to the buyer is the interim occupancy period. Ownership of a new condominium unit can only be transferred after the condominium corporation has been registered with the Land Registry Office. During this period you pay the builder a monthly interim occupancy fee, which cannot be more than the total of interest on the unpaid balance of the purchase price, the estimated municipal taxes for the unit and the projected common expenses. A shorter interim occupancy period is more favourable for the buyer, as the amount remaining on the new condominium purchase is not reduced by the interim occupancy fees paid.
Before the project is completed, many investors end up selling their interest in the property they bought from the builder. An assignment is the process by which the interest of the purchaser-investor in the agreement of purchase and sale with the builder is transferred to a new buyer, called the assignee. The written consent of the builder is usually required under the agreement before an assignment can be made by the buyer-investor. Many builders also include a clause in their contract that restricts assignment or charges a fee for it.
Whether you are moving into the property or buying it as an investment, it is best to have the agreement reviewed by an Ontario real estate lawyer, who can explain your options and request any amendment needed to allow a future assignment.
When you buy a new home from a builder, the builder agreement probably has many clauses that differ from one builder to another. There are many adjustments that are added to the cost of the property on the closing of the transaction. Typically, closing costs include land transfer taxes, legal fees, legal disbursements and any upgrades ordered during colour selection.
A few builders also add charges for items such as sewer and utility connections, a bulk hydro meter, property taxes, education levies and development charges, which increase the amount you pay for the property. Estimated closing costs can range from a few hundred to many thousands of dollars. In condominium agreements, these charges are often left open-ended, with no specific amounts provided. It is important to limit these costs and other charges, such as closing adjustments, by placing caps on them. It is recommended that you contact your Real Estate attorney to make sure caps are in place for each of these charges.
The Ontario New Home Warranties Plan Act requires all builders to provide warranty coverage on new homes in Ontario. Tarion administers the new home warranty coverage, which applies to newly built homes, including detached, semi-detached and townhouse homes and condo units. For a freehold home, warranty coverage starts on the date of possession. In the case of a condo unit, coverage starts on the date of occupancy. The shared areas (common elements) of a condo are covered from the date of registration of the condominium corporation.
Check how your deposit with the builder is protected. New buildings are normally covered by the Tarion warranty, which includes deposit protection. For a freehold home, Tarion currently protects up to $60,000 if the price is $600,000 or less, or 10% of the price, to a maximum of $100,000, if the price is higher. For a condo unit, Tarion protects up to $20,000, and the deposit must also be held in trust under the Condominium Act. If you sign an agreement for a new freehold home on or after April 1, 2026, notify Tarion of your purchase within 45 days so that you qualify for the maximum deposit coverage. You need to ensure that your deposit will be protected in the event that the builder becomes bankrupt.
Leased equipment costs, interest on deposit amount, HST for new home/condominium purchase, accessibility & amenities, upgrades and finishes, protection for buyers against delayed occupancy, pre-delivery inspections and complaints.
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