The ten-day rescission right, the disclosure statement, deposits, interim occupancy, and what changes when you buy by assignment instead of from the builder.
⚖️ This is general information, not legal advice. It can't account for your specific situation. Use it to get oriented, then confirm the details with a licensed Ontario lawyer.
Pre-construction means signing today for a home that will be built over the next several years. You are buying a contract, and everything about the purchase, from the price to the closing date, depends on that contract's terms and on the statutory protections around it. An assignment purchase adds a second contract: you buy the original purchaser's rights under the builder agreement, and you inherit its obligations. This guide explains both, points to the sections of the Condominium Act, 1998 and the Excise Tax Act that matter most, and lists the questions we ask before you commit.
Ten days to change your mind (condominiums only)
Section 73 of the Condominium Act lets a purchaser rescind an agreement with the declarant by written notice that the declarant receives within ten days of the latest of three events: receipt of the disclosure statement, receipt of the condominium guide, and receipt of the agreement signed by both sides. The declarant must then promptly refund every payment with interest at the prescribed rate. Under section 74, a later material change to the disclosure statement opens a fresh rescission window. This is the period in which we read the agreement; the disclosure statement alone can run to hundreds of pages. Freehold pre-construction homes have no statutory cooling-off period.
What the disclosure statement tells you
- The proposed declaration, by-laws and rules, which will govern your use of the unit.
- The first-year budget and the reserve fund plan, including whether the declarant must top up a first-year deficit.
- Whether amenities are shared with other buildings, and any agreements the corporation will be bound by.
- Whether parking and lockers are units or common elements, and how many are for sale.
- Any phased development, and what the declarant may change without your consent.
Deposits and the builder's licence
Deposit schedules in pre-construction are long and large. Confirm that the builder is licensed by the HCRA and the project enrolled with Tarion, because Tarion's deposit protection and the Act's trust requirements only help you if they are. The Tarion addendum attached to the agreement sets the critical dates and the compensation for delay, and it cannot be waived.
Interim occupancy
You may be required to move in before the condominium is registered. During that period you pay a monthly occupancy fee, capped by section 80(4) at interest on the unpaid balance, an estimate of taxes and the projected common expenses. You do not own the unit yet, cannot register a mortgage on it and may be restricted from renting it. Final closing comes after registration, which can be months later.
Buying by assignment
- Builder consent is almost always required, usually with a fee and sometimes only after a stated percentage of units are sold. No consent, no assignment.
- The assignee steps into every obligation: remaining deposits, occupancy fees, adjustments, levies and the closing itself. Ask for the full builder agreement, all amendments and every deposit receipt.
- HST applies to the assignment. Since 2022, section 192.1 of the Excise Tax Act treats assignment sales of new housing as taxable supplies, so the assignor collects HST on the assignment consideration, with specific rules for the portion that reimburses deposits. Budget for it and get the treatment in writing.
- The GST/HST new housing rebate is available to the assignee only if the assignee will occupy the unit as a primary residence; an investor looks to the rental rebate instead.
- Land transfer tax is assessed on the value of the consideration you give for the property, which in an assignment includes what you pay the assignor. Check the province's guidance with your lawyer.
- Two closings and two sets of legal fees: the assignment itself and the final closing with the builder.
Questions to ask before you commit
- Are the levies and adjustments capped in the agreement, and at what amount?
- What can the builder change (finishes, layout, unit size) without compensation?
- What are the tentative, firm and outside occupancy dates, and what happens at each?
- Is there a right to assign, and on what terms?
- How is the HST rebate handled in the price, and what triggers repayment?
- Who pays the occupancy fee if registration is delayed for a year?
How Treadstone Law can help
Pre-construction contracts reward a careful first reading more than any other purchase. We review builder and assignment agreements inside the rescission window and explain the numbers before your deposit becomes non-refundable.
Treadstone Law handles real estate matters on a transparent flat fee, with online intake and a real lawyer on your file, across Ontario.
- Start your file online at treadstonelaw.ca/start-file
- See flat-fee pricing at treadstonelaw.ca/pricing
- Learn more about our real estate services at treadstonelaw.ca/real-estate
- Or call us: 1-844-900-1070
This is not legal advice
This guide is general information, not legal advice. Reading it does not create a lawyer-client relationship. Ontario laws and government programs change, and how the law applies depends on your specific facts. For advice about your situation, speak with a licensed Ontario lawyer. Treadstone Law is licensed by the Law Society of Ontario — reach us at 1-844-900-1070 or start a file online.