Tarion Delayed Closing & Occupancy Compensation in Ontario: What Buyers Should Know
When a builder misses a firm closing or occupancy date, Ontario buyers may have compensation rights. The notice rules and exceptions decide what is payable.
If you’re buying a new freehold home from a builder in Ontario in 2027, plan to have the agreement reviewed before you sign. The province’s new 10-day statutory cooling-off period for eligible new freehold purchases was scheduled to start on January 1, 2027. It is now scheduled to start on January 1, 2028.
The new freehold right will apply only to qualifying purchase agreements entered into on or after January 1, 2028. If you enter into your agreement in 2027, you will not gain this right when 2028 begins. The rule excludes homes on units in vacant land condominium corporations, homes on parcels of tied land for common elements condominium corporations, and construction contracts. Separate condominium cooling-off rules may apply.
What changed for agreements signed in 2027?
The Home Construction Regulatory Authority also confirmed that the new information sheets and addendum are postponed to January 1, 2028. Builders should continue using the applicable current forms in 2027. If you’re reviewing an agreement, check the date and version of the addendum as well as the type of home you’re buying.
Freehold and condo buyers have different rights
If you’re signing a new freehold agreement in 2027, ask your lawyer what review or cancellation rights apply to your purchase. A review condition in the agreement may give you time to obtain legal advice, depending on its wording and deadline. Ask the builder whether it will agree to that condition before you sign.
Buyers of new condominiums continue to have a separate 10-day cooling-off period under the Condominium Act, 1998. The deadline generally runs from the latest date you receive the signed purchase agreement, the disclosure statement or Ontario’s Residential Condominium Buyers’ Guide. If you’re considering cancelling, have your lawyer confirm the deadline and the steps for giving written notice.
What to do before you sign a builder agreement
- Send the full package to your lawyer. Include the agreement, addendum, schedules, and any incentives or upgrades the sales team has offered.
- Confirm what you’re buying. A townhouse can be freehold, a condominium, or a freehold home tied to a common-elements condominium. The legal structure matters more than the label in the brochure.
- Ask for time to review. If you need a lawyer-review condition, ask the builder to put it in the agreement. Confirm the exact deadline and how any notice must be given.
- Review the costs and dates. Ask your lawyer to identify builder adjustments, any caps, deposit deadlines and the provisions that govern changes to closing or occupancy.
