Buying A New Build

Comprehensive Guide to Buying a New Build Home or Condo in Ontario

This guide is designed for buyers considering both single-family new builds and condo new builds. It provides detailed insights into the process, rights and responsibilities, potential issues, and frequently asked questions to help you navigate the complexities of purchasing a new build property.

1. Deciding to Build a New Home or Condo

Detailed Explanation

Building a new home or condo is a significant financial and lifestyle decision. Buyers need to assess their budget, timeline, and desired location to ensure their decision aligns with their needs. Budgeting is particularly important, as new builds often involve staged payments, upgrade costs, and closing fees. Condo buyers should also account for interim occupancy fees (paid before final closing) and potential condo maintenance fees.

The location of the property is critical for lifestyle and resale value. Consider proximity to work, schools, transit, and amenities, and research future development plans to understand how the area may change.

The builder’s reputation is a key factor. Use the Ontario Builder Directory to verify licensing, review complaints, and assess the builder's track record. Whether you’re buying a single-family home or a condo unit, customization options can be a deciding factor. Builders may offer personalization for finishes or layouts in single-family homes, while condo buyers may face more limitations.

Summary (Point Form)

Example

Anna and James want to build a home. They assess their finances and get pre-approved for a mortgage. They choose a location close to their workplace and check the builder’s record on the Ontario Builder Directory, finding no complaints. They budget for staged payments and decide to include an upgraded kitchen package in their plan.

2. Understanding Deposits for New Builds

Detailed Explanation

Deposits for new builds are paid in stages as outlined in the Agreement of Purchase and Sale (APS). For single-family homes, deposits are protected under TARION up to $100,000, and for condos, up to $20,000. Condo deposits may be paid into a trust account managed by a lawyer, offering additional security.

The APS should clearly outline the deposit structure, including amounts, due dates, and refund conditions. This is particularly important for condo buyers, as deposit funds may be used by the builder during the construction phase. Buyers should ensure the APS specifies how their deposits are protected and what happens in the event of a dispute.

Summary (Point Form)

Example

Tom signs an APS for a new condo and pays a $15,000 deposit into a trust account managed by the builder’s lawyer. The APS specifies that the deposit will be refunded if the builder cancels the project or delays completion beyond agreed timelines.

3. Cancelling the Agreement

Detailed Explanation

Both buyers and builders have specific rights to cancel a new build APS under certain conditions. However, all cancellation actions or intentions to cancel must first be discussed with and processed through a lawyer. Buyers should avoid directly communicating cancellations or threats to cancel to the builder, as this could complicate their legal position or weaken their case.

Buyers Can Cancel If:

Builders Can Cancel If:

Process of Cancellation:

Summary (Point Form)

Buyers Can Cancel:

Builders Can Cancel:

Cancellation Process:

Example

Scenario for a Single-Family Home:
Megan’s builder delays her home’s completion by 140 days, significantly exceeding the firm closing date. Megan consults her lawyer, who confirms her right to cancel under the APS. The lawyer drafts a formal written notice to the builder, referencing the 120-day delay clause and requesting a full refund of her deposit. Megan’s lawyer handles all communication with the builder, ensuring the cancellation is processed correctly.

Scenario for a Condo:
David’s condo was scheduled for occupancy on April 1, but the builder delays the interim occupancy date to October 15—more than 120 days after the original date. David consults his lawyer, who confirms that the delay exceeds TARION’s allowable limits. The lawyer issues a formal cancellation notice to the builder and files for a refund of David’s deposit. The lawyer also ensures David is compensated for interim occupancy delays incurred prior to cancellation.

4. Closing Dates and Delays

Detailed Explanation

Delays are a common part of the new build process for both residential homes and condos, but there are differences in how delays are managed and the additional considerations for condominium buyers. Builders must follow specific notification requirements to communicate delays and protect the rights of buyers.

Summary (Point Form):

Example:

Residential Home Scenario:
Ben’s new home is scheduled to close on March 1. On December 1 (90 days before), the builder sends written notice of a delay, revising the closing date to June 1. On March 30 (65 days before the new date), the builder issues another notice extending the closing to July 15. Ben decides to cancel the APS after consulting his lawyer, as the delays exceed 120 days, and he receives a full refund of his $50,000 deposit.

Condo Scenario:
Emily’s condo is scheduled for closing on April 1, but the builder issues a 90-day notice revising the date to September 1. On June 30, the builder sends another notice delaying interim occupancy to October 15. Emily consults her lawyer and decides to proceed, but she claims $4,500 in compensation through TARION for interim occupancy delays beyond September 1.

5. FAQ: Common Buyer Questions

General Questions About Buying a New Build










TARION Warranty Questions










Deposit and Financial Questions










Questions About Delays







Scenario-Specific Questions








Closing and Post-Closing Questions





Disclaimer

The information provided on this page is for general informational purposes only and may not be entirely accurate or up to date. All information herein is subject to change without notice. It is not intended to replace legal, financial, or professional advice and should not be solely relied upon when making decisions regarding your new build home or condo purchase. Buyers must refer to the TARION Warranty website, the Home Construction Regulatory Authority (HCRA) website, and their Offer or Agreement of Purchase and Sale for all legally binding details. For specific guidance, always consult with a real estate lawyer, new build specialist, or real estate professional to ensure your decisions are well-informed and your rights are protected.