Can a Buyer Do a Final Walkthrough Before Closing in Ontario and What if the Home Is Damaged?

Buyers commonly arrange a final walkthrough shortly before closing. If you find damage, you may have options, but whether you can refuse to close depends on how serious the damage is. Under the standard Ontario Real Estate Association (OREA) insurance clause, the property stays at the seller's risk until completion, with any insurance proceeds held in trust.

If there is substantial damage, the buyer may either terminate and recover the money paid or take the insurance proceeds and complete the purchase. A court has suggested the buyer is entitled to timely notice of the damage and a meaningful chance to inspect. If the damage is not substantial, the buyer has no right to terminate under that clause, and trying to terminate anyway can be treated as a repudiation of the agreement.

Missing items or minor problems are different from substantial damage, and the wording can vary between versions of the form. Take dated photos and tell your lawyer right away, before you close. A buyer who repudiates and fails to close forfeits the deposit to the seller without proof of damage, although a court may grant relief against forfeiture in some cases. Get advice before you refuse to close.