Your Rights When a Builder Is Late Closing a New Home in Alberta

A possession date that keeps moving is stressful, especially if you have sold a home, arranged a mortgage or given notice on a rental. You may wonder whether you can claim compensation, agree to an extension or walk away.

The answer depends a lot on what you bought. New condominium units have specific protections in the Condominium Property Act. For other new homes, the contract and general contract law do most of the work.

This article covers the law of Alberta.

Start with the contract

For a freehold home, such as a detached house or townhouse that is not a condominium unit, late possession is mainly a matter of what your purchase contract says and general contract law. Look for the possession date, any provision allowing the builder to extend it, any compensation or notice terms, and any conditions on cancelling.

Do not sign an extension or amendment without understanding what rights you may be giving up. A lawyer can read the exact wording and tell you how it applies to your situation.

Separate from the closing date, the New Home Buyer Protection Act requires builders to provide home warranty coverage on all new residential homes, including condominiums. It applies to homes where the building permit was applied for on or after February 1, 2014. Warranty coverage starts at the earliest of the home being occupied, the permitting authority granting permission to occupy, or title transferring to the owner. For condominiums, coverage for units and for common property starts on the earlier of first occupancy or transfer of legal title, with separate policies for each.

New condominium units: your statutory protections

A developer shall not sell or agree to sell a unit or proposed unit unless it has delivered the listed disclosure documents to the purchaser. The purchase agreement must also include a notice of your right to rescind within 10 days.

If the developer changes disclosed information, it must give you written notice of material changes before you take possession. The regulations may set remedies if occupancy of a unit is delayed. Because those regulation details should be confirmed against the current text, ask a lawyer what applies to your delay.

Any waiver or release by a purchaser of the rights, benefits or protections under the Act is void, and your remedy under the Act is in addition to any other rights or remedies.

Cancelling and getting your money back

A purchaser of a new condominium unit may rescind by written notice to the developer within 10 days of the later of receiving the required documents or signing the agreement. The developer must return all money paid within 15 days of receiving the notice.

That 10-day window is tied to documents and signing, not to a late possession date. A delay that arises months later may therefore need to be handled through the contract or the regulations rather than this right.

Your deposit is also protected. A developer or prescribed trustee must hold purchaser money in trust until title issues, and must deposit it into a trust account within 3 days of receipt, excluding holidays and Saturdays.

When the developer breaks the rules

A developer that fails to comply with ss 12(1), 12.2 or 13(2) commits an offence. A corporation faces a fine of up to the greater of $100,000 or three times the amount obtained, and an individual up to the greater of $25,000 or three times the amount obtained. The Director can also impose administrative penalties of up to $100,000.

Those fines and administrative penalties are what the Act sets for a developer that breaks these rules. Whether you can claim damages for your own losses depends on your contract and the facts, so it is worth confirming with a lawyer.

What to do next

It also helps to check who you are dealing with. The Builder Registry can be searched by builder name, builder ID or licence ID, and it shows licence status and class and enforcement actions under the Act. A builder who does not appear is not shown as licensed. The Property Registry shows the warranty provider, the builder name, whether the home has warranty coverage and when coverage started.

• Find your purchase contract and every amendment, and note the possession date and any extension wording.
• Keep all written notices from the builder or developer, with dates received.
• Do not sign an extension or waiver until you have had it reviewed.
• For a condominium, check whether you are still within the 10-day rescission window.
• Keep receipts for extra costs such as storage, rent or mortgage rate holds.
• Speak with a lawyer before giving notice or refusing to close.

Frequently asked questions