- A buyer has a 10-day cooling-off period to rescind, and a separate right to rescind after a material change in the disclosure statement.
- Deposits received by a builder must generally be held in trust, and a cancelled project generally means the deposit comes back with interest.
- A builder can cancel only under early termination conditions allowed by Schedule A of the Tarion Addendum.
You signed for a pre-construction condo and now you have doubts. Maybe your finances changed, or the project looks different from what you pictured. The key questions are whether you can still get out and how much of your deposit is at risk.
Your options depend on timing and on why the deal is ending. This article walks through the rights Ontario buyers have, and the limits on them.
Your right to rescind in the first days
A buyer of a new condo from a builder has a 10-day cooling-off period to rescind the agreement of purchase and sale under the Condominium Act, 1998, s. 73. It starts once the buyer has the purchase agreement, the disclosure statement and the Condo Buyers' Guide.
A pre-construction purchase agreement is not binding until the buyer has received both the disclosure statement and Ontario's Residential Condominium Buyers' Guide from the builder.
Rescinding after a material change
A buyer may also rescind after a material change in the information in the disclosure statement, which is a separate right from the initial cooling-off period. If you think the project has changed in an important way, ask a lawyer whether the change counts as material for your agreement.
What happens to your deposit
Money a condo builder receives, including deposits, must generally be held in trust under the Condominium Act. If a project is cancelled, buyers are generally entitled to their deposit back plus accrued interest at two per cent below the Bank of Canada bank rate.
Since January 1, 2023, interest is paid at the Bank of Canada policy interest rate where no units were sold before that date and the developer terminates the agreement. The two-per-cent-below rate still applies when the buyer rescinds during the cooling-off period or after a material change.
If a builder terminates a condo purchase agreement, it must return the deposit in full within 10 days. If it does not, Tarion's deposit protection covers up to $20,000 plus a limited amount of accrued interest.
Other situations: builder cancels, delays, or the window has passed
| Situation | What to know |
|---|---|
| Within the cooling-off period | You can rescind under s. 73. |
| After a material change | A separate right to rescind exists. |
| Builder cancels | Only under early termination conditions in Schedule A of the Tarion Addendum, clearly described with a date to be met. |
| Occupancy badly delayed | If the unit is not ready by the Outside Occupancy Date, you have 30 days to terminate and get a full refund plus interest. |
| Cooling-off period over, no other right | The outcome depends on your agreement, so speak to a lawyer before acting. |
Typical permitted cancellation conditions include failing to sell enough units, being unable to secure project financing, and delays in getting building or planning approvals. Conditions of a type not permitted by the Addendum are unenforceable.
If you simply change your mind after the cooling-off period, the rescission rights described above may not help you, and your deposit could be at risk. How much depends on the wording of your agreement, so get advice before you stop paying or send any notice.
What to do next
- Find the date you received the agreement, disclosure statement and Condo Buyers' Guide.
- Read the early termination and occupancy sections of your Tarion Addendum.
- Gather your deposit receipts and cancelled cheques.
- Do not stop paying or send notices before getting legal advice.
- Ask a lawyer to confirm which rights apply to your agreement and how to use them.
Frequently asked questions
Can I cancel a pre-construction condo in Ontario after the cooling-off period?
You may still have a right in some cases, such as a material change in the disclosure statement or a missed Outside Occupancy Date. Otherwise it depends on your agreement, so a lawyer should review it before you act.
Will I lose my deposit if I cancel?
If you rescind in the cooling-off period or after a material change, interest is still paid at two per cent below the Bank of Canada bank rate, and deposits are generally held in trust under the Condominium Act. Outside those rights, the risk depends on your agreement.
What if the builder cancels the project?
A builder can cancel only under conditions listed in Schedule A of the Tarion Addendum. It must return the deposit in full within 10 days, and Tarion's deposit protection may apply if it does not.
How do I claim from Tarion?
Call Tarion at 1-877-982-7466 for a Deposit Refund Claim Form and submit it with the purchase agreement and cancelled deposit cheques. Assessment can take up to six months.
Sources
- Condominium Authority of Ontario – Condo Buyers' Guide — condoauthorityontario.ca
- Condominium Authority of Ontario – Pre-construction Condos — condoauthorityontario.ca
- Tarion – Deposit Protection — tarion.com
- Tarion – Condominium deposits (builders) — tarion.com
- Tarion – Condo Units: coverage for occupancy dates, delays & cancellations — tarion.com
- Tarion – Condominium delayed occupancy — tarion.com
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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