Pre-Construction Condo Cooling-Off Period: Your 10 Days in Ontario

You have just signed an agreement to buy a pre-construction condo from a developer, and now the doubts are setting in. Maybe the numbers look tighter than they did at the sales centre, or you want someone to read the documents properly. Ontario gives you a short window to change your mind.

This article explains how the cooling-off period works, when the clock starts and what happens to your deposit. The window is short, so if you are inside it, speak to a lawyer straight away.

What the cooling-off right is

A buyer of a new (pre-construction) 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. Rescinding means cancelling the agreement as though the deal had not been made.

The agreement is also not binding until the buyer has received both the disclosure statement and Ontario's Residential Condominium Buyers' Guide from the builder.

When the 10 days start

The period starts once the buyer has the purchase agreement, the disclosure statement and the Condo Buyers' Guide. If you signed first and received the disclosure statement or Guide later, your start date may be later than the day you signed. Because the start date depends on when you actually received each document, keep a record of when each one reached you.

Because the exact way days are counted can matter, do not leave this to the last day. A lawyer can confirm your deadline from the dates on your documents and the wording of the Act.

Other rights and your deposit

• Material change. A buyer 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.
• Deposits in trust. Money a condo builder receives, including deposits, must generally be held in trust under the Condominium Act.
• Interest. 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. That two-per-cent-below rate still applies when the buyer rescinds during the cooling-off period or after a material change.

Since January 1, 2023, a different rate applies in one situation: where no units were sold before that date and the developer terminates the agreement, interest is paid at the Bank of Canada policy interest rate.

How to cancel properly

The way notice must be given, and to whom, is set by the Act and your agreement, so confirm both before you act. Do not rely on a phone call or a chat with a sales representative.

• Find the date you received the purchase agreement, the disclosure statement and the Condo Buyers' Guide.
• Read the rescission wording in your agreement and the disclosure statement.
• Get legal advice early, ideally in the first few days.
• Give written notice in the form and manner the documents require, and keep proof of when and how it was sent.
• Keep copies of everything, including your deposit receipts.

After the cooling-off period ends

Once your window closes, you are generally bound, but other protections may still matter. A builder can cancel only under early termination conditions listed in Schedule A of the Tarion Addendum, each clearly described in the agreement with a date by which it must be met. Conditions of a type not permitted by the Addendum are unenforceable. If a builder terminates, it must return your deposit in full within 10 days.

If the builder does not refund a condo deposit, Tarion's deposit protection covers up to $20,000 plus a limited amount of accrued interest. You call Tarion at 1-877-982-7466 for a Deposit Refund Claim Form and submit it with the purchase agreement and cancelled deposit cheques. Occupancy delays have their own rules in the Tarion Addendum, which a lawyer can review against your own agreement.

What to do next

• Count your days from the date you had all three documents, not just the signing date.
• Book a lawyer review right away if you are still inside the window.
• Decide early whether you want to keep the deal, so you are not rushed on the last day.

Frequently asked questions