Can You Cancel a New Condo Purchase in Nova Scotia? The 10-Day Rule

You have signed, or are about to sign, an agreement to buy a brand-new condo unit from the developer. The paperwork is thick, the unit may not even be built yet, and you are wondering what happens if you read the fine print and do not like what you find.

In Nova Scotia there is a short window that can help in this situation, but it is narrower than many buyers assume. This article explains when the ten days apply, how to cancel properly, what to look at while the clock is running, and why resale condos are different.

This article covers the law of Nova Scotia.

What the 10-day cooling-off period is

For new condo units bought from the declarant (the developer), the buyer has ten days to rescind, meaning to cancel the agreement. It is not a general right to change your mind. The right applies if the condo documents materially affect your enjoyment of the property and the vendor will not fix or waive the issue.

In plain words, there are three things that have to line up: the problem is in the condo documents, it is serious enough to materially affect how you would enjoy the property, and the vendor has refused to correct it or let you out of the problem. Whether a particular problem is serious enough is a question of fact, and a lawyer can help you assess it.

How to cancel the right way

Rescission must be in writing, and it must be in the vendor's hands within the ten-day cooling-off period. That last part matters. Sending a notice on day ten that arrives on day eleven may not meet the requirement as it is described.

• Put your notice in writing; a phone call or casual conversation is not enough.
• Make sure the vendor actually receives it within the ten days, not merely that you sent it.
• Keep proof of how and when it was delivered.
• Raise the problem with the vendor early so there is time to see whether they will fix or waive it.
• Get legal advice before relying on the right, because the details of your agreement matter.

What to review during the ten days

Before buying, you should get the declaration, the bylaws, the rules for common elements, the reserve fund status certificate and the audited financial statements. Ask whether the declaration prohibits any use that matters to you, such as keeping pets or running a business from the unit.

The reserve fund deserves particular attention. Ask whether a reserve fund study has been done, whether the corporation's finances match its recommendations, what the reserve fund balance is, and whether major repairs are expected.

• Declaration and bylaws: the rules you will live under, including use restrictions.
• Common element rules: how shared spaces can be used.
• Reserve fund status certificate and study: whether money is being set aside for major repairs.
• Audited financial statements: the corporation's financial health.
• Any limit on pets or on running a business.

Reserve funds and the developer's trust money

Reserve fund rules help you judge what you read. Corporations with fewer than 10 units must keep the reserve fund at 100 percent of the amount assessed annually. Those with 10 or more units base contributions on a reserve fund study covering at least 20 years, and the fund must be fully funded within five years of creation. Reserve fund requirements can change over time, so it is worth having a lawyer confirm the current ones.

For new developments, the developer's lawyer holds in trust money equal to 10 percent of the budget from the first unit's sale. The corporation can claim against it if first-year costs exceed the budget by more than 10 percent.

A new home warranty is not required by law in Nova Scotia, although some builders offer a warranty or provide one through a third-party home warranty program. If a warranty matters to you, ask what the builder is offering and get it in writing.

Resale units are different

The ten-day right is described for new units bought from the developer. A resale unit should not be assumed to come with a cooling-off period. For a resale unit, the province advises making your offer conditional upon receiving an estoppel certificate. That certificate must state the corporation's insurance coverage: fire insurance, public liability and directors' liability insurance, and the amount or value of each policy.

Because the protection can be limited, the province advises having a lawyer review the agreement before you sign. Doing it before signing is far easier than trying to get out afterward.

What to do next

• Ask a lawyer to confirm when your ten-day cooling-off period starts and the last day your written notice can reach the vendor.
• Gather the declaration, bylaws, common element rules, reserve fund status certificate and audited financial statements, and read them promptly.
• Ask about reserve fund studies, balances and expected major repairs.
• Check use restrictions that affect your plans, such as pets or a home business.
• If something looks wrong, tell the vendor in writing and ask them to fix or waive it.
• Speak with a Nova Scotia real estate lawyer before the ten days run out.

Frequently asked questions