- Your rights after a delayed closing depend first on whether you bought a new build from a builder or a resale home.
- On a new freehold home, Tarion delay compensation is $150 per day for living expenses plus receipted costs, capped at $7,500 in total.
- New-build closing dates generally need at least 90 days' written notice to change.
- For resale homes, extensions and what happens if a date is missed turn on the wording of your signed agreement, so have your lawyer read it before you reply.
Few things shake a home purchase like a call saying the closing date will not work. You may have movers booked, a lease ending and a mortgage rate hold ticking down. The seller, the builder or your lender may be the one who needs more time.
This article explains how delays are generally handled in Ontario. The rules are quite specific for new builds covered by Tarion and much more dependent on the contract for resale homes. It is general information, not legal advice, and your own agreement of purchase and sale controls.
Start by working out who is delayed and why
Before you agree to anything, pin down the facts. The answers shape what you can ask for and what you might lose by agreeing too quickly.
- Is this a new build from a builder, or a resale from an individual seller?
- Is the seller or builder delayed, or is it your lender or your own funds?
- Is the delay a few days or several months?
- What does your signed agreement say about closing, extensions and notice?
- Has anyone put the new date in writing?
Keep every message. A delay discussed only by phone is hard to prove later, and a written record helps your lawyer advise you.
New builds: Tarion sets specific delay rules
If you bought a new freehold home from a builder, Tarion's rules on closing dates and delays apply. Closing-date changes generally need at least 90 days' written notice. A tentative closing date can be extended twice, by up to 120 days each time. The Firm Closing Date can be no later than 240 days after the First Tentative Closing Date.
If the home is not complete by the Outside Closing Date, which is 365 days after the Firm Closing Date, you have a 30-day termination period and get a full refund plus interest.
| Delay topic | What the Tarion rules say |
|---|---|
| Notice of a change | Generally at least 90 days' written notice |
| Tentative date extensions | Two extensions of up to 120 days each |
| Latest Firm Closing Date | No later than 240 days after the First Tentative Closing Date |
| Outside Closing Date | 365 days after the Firm Closing Date; then a 30-day termination period with full refund plus interest |
| Daily living expenses | $150 per day with no receipts needed |
| Other costs and cap | Receipted costs are also covered, capped at $7,500 in total |
| Very short notice | Less than 10 days' notice of a delay gives $1,500 |
Claiming delayed closing compensation
Compensation is not automatic. You claim to the builder within 180 days, and then to Tarion within the first year of possession, or within 365 days after termination if the agreement ends. Missing these windows can cost you the compensation, so note the dates as soon as a delay is announced.
The amounts above are for new freehold homes. Condo units and other situations may have different details, and the exact rules can depend on when your agreement was signed. Ask your lawyer to confirm which version applies to you.
Resale homes: the contract does most of the work
For a resale purchase, the rules on extensions, delay and what happens if a party misses the closing date come mainly from the signed agreement of purchase and sale. You may hear the phrase "time is of the essence." Whether and how it applies to you depends on the exact wording of your agreement, so have a lawyer read it before you agree to or refuse a new date.
If you are asked to agree to an extension, how it should be recorded depends on your agreement, so ask your lawyer. Ask what the new date is, whether anything else changes, and whether the extension affects your mortgage, your moving plans or your deposit. Do not assume that a friendly email is enough.
If your lender or financing is the problem
A mortgage pre-approval is an estimate of the maximum mortgage and likely rate, and it does not guarantee approval. Lenders can lock the rate for roughly 60 to 130 days depending on the lender. If closing moves past that window, ask the lender what happens to your rate.
Before final approval, the lender verifies that the property meets its standards, and the final amount depends on the property's value and your down payment. The lender may offer a smaller mortgage, a higher rate, a larger down payment requirement or ask for a co-signer. Even with a pre-approval certificate, you must get final lender approval during the conditional offer period.
If the delay is on your side, speak to your lawyer early. What the agreement allows, and what a missed date could mean, depend on its wording.
What to do next
- Get the delay and the proposed new date in writing.
- Find your signed agreement and any amendments, and note the closing date, notice and extension terms.
- For a new build, write down the dates of every notice you received and count 90 days, 180 days and the first year of possession.
- Tell your lender and ask about your rate hold and approval timing.
- Check movers, rental end dates and insurance, and keep receipts for extra costs.
- Ask your lawyer to review before you sign any extension or amendment. They will also prepare the statement of adjustments, which credits the vendor with the price and you with deposits, so the final numbers reflect the actual closing date.
Frequently asked questions
Can the builder keep pushing back my closing date?
Not without limit. For new freehold homes, changes generally need at least 90 days' written notice, and the Firm Closing Date can be no later than 240 days after the First Tentative Closing Date. If the home is not complete by the Outside Closing Date, you have a 30-day termination period with a full refund plus interest.
How much compensation do I get for a delayed new-home closing?
For new freehold homes it is $150 per day for living expenses with no receipts, plus other receipted costs, capped at $7,500 in total. Less than 10 days' notice of a delay gives $1,500.
Does "time is of the essence" mean I lose my deposit if I am late?
Not automatically. The effect depends on the wording of your agreement and the facts, so it is worth having a lawyer read the contract before you respond to any delay.
Do I have to agree to an extension on a resale purchase?
Whether you must agree depends on what your signed agreement says. Do not sign an extension until a lawyer has looked at it, because it can change your rights and your financing timeline.
Sources
- FCAC – Getting preapproved for a mortgage — canada.ca
- CMHC – Making an offer to purchase a home — cmhc-schl.gc.ca
- Tarion – Freehold & Contract: coverage for closing dates & delays — tarion.com
- Law Society of Ontario – Residential Real Estate Transactions Practice Guidelines — lso.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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