- A pre-construction condo purchase agreement is not binding until you have received both the disclosure statement and the Buyers' Guide.
- You have a 10-day cooling-off period to rescind, and it starts once you have the agreement, the disclosure statement and the Condo Buyers' Guide.
- A material change in the disclosure statement gives a separate right to rescind.
A disclosure statement can run to many pages, and it arrives alongside a purchase agreement you may feel pressure to sign. Knowing where to look makes the document far more useful.
This article explains why the disclosure statement matters in Ontario, which areas buyers typically focus on, and how your cancellation rights work. Have a lawyer review the full document, because what it says about your building is specific to that project.
Why the disclosure statement matters
The disclosure statement is the builder's description of the project you are buying into. A pre-construction condo purchase agreement is not binding until you have received both the disclosure statement and Ontario's Residential Condominium Buyers' Guide from the builder.
You can compare what the statement says with what the salesperson told you. If the two differ, the written document is what to raise with your lawyer.
The parts most buyers focus on
- The budget and your fees: condo fees cover maintaining the common elements, reserve fund contributions, and services such as cleaning, building maintenance and condo management. Your share is a percentage set in the declaration and may vary with unit size.
- Interim occupancy: if you move in early, the interim occupancy fee cannot exceed the total of monthly interest on the unpaid balance at the prescribed rate, estimated monthly municipal taxes, and projected common expenses for the unit.
- Unit boundaries and governing documents: condos are governed in this order: the Condo Act, then the declaration, then the by-laws, then the rules. Each corporation defines its own standard unit in its governing documents.
- Cancellation conditions: a builder can cancel only under the early termination conditions in Schedule A of the Tarion Addendum, each clearly described with a date by which it must be met.
Typical permitted cancellation conditions include failing to sell enough units, being unable to secure project financing, and delays in getting building or planning approvals. A condition of a type the Addendum does not permit is unenforceable.
Your right to cancel
As a buyer of a new condo from a builder, you have a 10-day cooling-off period to rescind the agreement of purchase and sale under s. 73 of the Condominium Act, 1998. It starts once you have the purchase agreement, the disclosure statement and the Condo Buyers' Guide.
You may also rescind after a material change in the information in the disclosure statement. This is a separate right from the initial cooling-off period. Whether a particular change counts as material depends on the facts, so ask a lawyer promptly.
| Right | When it applies |
|---|---|
| Cooling-off period | 10 days, starting once you have the agreement, disclosure statement and Buyers' Guide |
| Rescission for material change | After a material change in the disclosure statement information, separate from cooling-off |
Your money if you rescind
Money a builder receives, including deposits, must generally be held in trust. The interest rate of two per cent below the Bank of Canada bank rate still applies when you rescind during the cooling-off period or after a material change.
What to do next
- Note the date you received the agreement, the disclosure statement and the Buyers' Guide, since the cooling-off period starts once you have all three.
- Have a lawyer review the disclosure statement before the cooling-off period ends.
- Check the budget, your fee share and the interim occupancy terms.
- Read the cancellation conditions and their dates.
- Keep every amended version of the statement you receive and show it to your lawyer.
Frequently asked questions
How long do I have to cancel after receiving the disclosure statement?
You have a 10-day cooling-off period, which starts once you have the purchase agreement, the disclosure statement and the Condo Buyers' Guide. Because timing matters, speak to a lawyer as soon as you receive the documents.
Can I cancel later if the project changes?
A buyer may rescind after a material change in the information in the disclosure statement. This is separate from the cooling-off period. Whether a change is material depends on the facts.
Is my agreement binding before I get the Buyers' Guide?
A pre-construction condo purchase agreement is not binding until you have received both the disclosure statement and Ontario's Residential Condominium Buyers' Guide from the builder.
Where is my deposit held?
Money a condo builder receives, including deposits, must generally be held in trust under the Condominium Act. If the builder does not refund a deposit, Tarion's deposit protection may apply.
Sources
- Condominium Authority of Ontario – Common Expenses — condoauthorityontario.ca
- Condominium Authority of Ontario – Insurance — condoauthorityontario.ca
- Condominium Authority of Ontario – What are governing documents? — condoauthorityontario.ca
- Condominium Authority of Ontario – Condo Buyers' Guide — condoauthorityontario.ca
- Condominium Authority of Ontario – Pre-construction Condos — condoauthorityontario.ca
- Tarion – Condominium deposits (builders) — tarion.com
- Tarion – Condo Units: coverage for occupancy dates, delays & cancellations — 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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