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

You have signed to buy a brand-new condo unit, and then the stack of condominium documents arrives. Maybe a rule surprises you, or a restriction clashes with how you plan to live. You want to know whether you can still back out.

In Nova Scotia there is a short window that can help, but it is narrow. This article explains who it covers, when it applies, how to use it, and what to read carefully while the clock is running.

This article covers the law of Nova Scotia.

What the 10-day cooling-off right is

For a new condo unit bought from the declarant (the developer who created the condominium), the buyer has ten days to rescind, meaning to cancel the purchase, in certain situations.

It is not a general change-of-mind right. It applies if the condominium documents materially affect enjoyment of the property and the vendor will not fix or waive the issue. In plain words, the problem has to be significant, and the developer has to refuse to correct it or give it up.

When it applies, and when it may not

The right is described for new units bought from the declarant. The provincial guidance does not describe a cooling-off period for resale units, so if you are buying from an existing owner you should not assume you have one.

How this applies to your particular problem depends on your documents and your situation. If you are unsure whether your issue qualifies, ask a lawyer before the ten days run out.

How to use the right: in writing, and on time

Rescission must be in writing, and it must be in the vendor's hands within the ten-day cooling-off period. Two points follow from that.

• A phone call or casual message is not enough; put it in writing.
• It is not enough to send it on day ten. It has to reach the vendor within the period.
• Keep proof of how and when it was delivered.
• How your agreement and delivery methods work together, and when the ten days start counting, depends on your documents, so have a lawyer confirm the timing.

Before you rescind, you can also raise the issue with the developer. The right is tied to the vendor refusing to fix or waive the problem, so a written request to fix it or waive it can be part of the process. Do not let that conversation use up your window.

What to review inside the ten days

Buyers should get and read the declaration, the bylaws, the common elements rules, the reserve fund status certificate and the audited financial statements before buying. You should also ask whether the declaration prohibits any use, such as keeping pets or running a business.

• Declaration: read it for use restrictions.
• Bylaws and common elements rules.
• Reserve fund status certificate and audited financial statements.
• Whether a reserve fund study has been done, whether finances match its recommendations, the reserve fund balance, and whether major repairs are expected.
• Any rule that conflicts with your plans, such as pets or a home business.

For context, corporations with fewer than 10 units must keep the reserve fund at 100 percent of the amount assessed annually, while those with 10 or more units base contributions on a reserve fund study covering at least 20 years. Reserve fund rules can change over time, so how they apply to your building is worth confirming with a lawyer.

Other points that are specific to new units

• HST: buyers pay HST on new units but not on previously owned units, although resale buyers may owe the federal portion in some cases, such as when the seller used the unit mainly for business.
• First-year costs: on new developments, the developer's lawyer holds in trust money equal to 10 percent of the budget from the first unit's sale, so the corporation can claim if first-year costs exceed the budget by more than 10 percent.
• Warranty: a new home warranty is not required by law in Nova Scotia. Some builders offer a warranty or provide one through a third-party home warranty program. Ask what your builder is offering and get it in writing.

What to do next

The ten-day window is short, so act early. The province also advises having a lawyer review the agreement before you sign.

• Note the date you received the condo documents and the date your agreement was signed.
• Read the documents listed above right away rather than at the end of the period.
• Write down every issue that affects how you want to use the unit.
• Ask the developer in writing to fix or waive anything serious.
• If it is not resolved, have a lawyer help you prepare written notice that reaches the vendor within the ten days.
• If you are buying a resale unit instead, ask a lawyer about making the offer conditional on an estoppel certificate.

Frequently asked questions