Quick answer: Every pre-construction buyer in Ontario should have a real estate lawyer review the agreement before the 10-day cooling-off period ends. The clauses that matter most are:
- Deposits
- Caps on development charges and closing costs
- The HST rebate clause
- Occupancy and outside dates
- Assignment and leasing rights
- The builder's right to change the unit or terminate
Your key protections come from the Condominium Act, the New Home Construction Licensing Act and Tarion.
Part of our Pre-Construction Investing & Buying Guide.
Lawyers and agreements
Do I need a lawyer to buy pre-construction?
You'll need one to close, and you should use one before you're committed. Builders' agreements are written by their lawyers to protect them. A lawyer who regularly handles new construction can flag risky clauses and suggest amendments during your cooling-off period.
What does a pre-construction lawyer review?
- Deposit schedule and who holds the deposit
- HST clause and rebate assignment
- Development charge and levy caps
- Closing adjustments and fees
- Occupancy, firm and outside dates (the Tarion Addendum)
- Assignment and leasing rights
- The builder's right to change the unit, layout or materials
- Termination conditions
- For condos, the disclosure statement, declaration and budget
Can I negotiate changes to the builder's agreement?
Often, yes, especially in a slow market. Builders commonly agree to caps on levies, better assignment terms, extended deposit schedules or a lawyer's review condition. Put every change in a signed amendment.
What is the Tarion Addendum?
A mandatory part of every new home agreement in Ontario. It sets the rules for occupancy and closing dates, delays, compensation and early termination conditions. It overrides anything in the agreement that conflicts with it.
Condo-specific questions
What is a disclosure statement?
A document the builder must give condo buyers. It describes the project, unit, common elements, budget for the first year, and other key details. Your 10-day cooling-off period doesn't start until you receive it.
What if the builder makes a material change?
Under the Condominium Act, a builder must tell you about material changes to the disclosure statement. If a change is material, you have 10 days after receiving notice to cancel and get your deposit back. Whether a change is "material" is a legal question, so ask your lawyer.
Can a condo builder cancel my purchase?
Yes, under conditions in the agreement and the Tarion Addendum, such as not meeting financing or sales thresholds by a set date. If the builder terminates, your deposit must be returned with interest.
Deposits and protection
Is my deposit protected if the builder goes bankrupt?
For condos, deposits must be held in trust or secured by deposit insurance, and Tarion covers up to $20,000 if a deposit wasn't held in trust. For freehold homes, Tarion covers up to $60,000 on homes priced $600,000 or less, and up to 10% (maximum $100,000) on more expensive homes. Read our deposit guide.
How do I check if a builder is licensed?
Search the Ontario Builder Directory, run by the Home Construction Regulatory Authority. Only licensed builders and vendors can legally sell new homes in Ontario.
Ownership and title
Can I add someone to my agreement later?
Usually, but builders often charge a fee and require their consent. Adding a spouse may be treated differently from adding an investor. Removing or adding names may affect HST rebate eligibility.
Can I buy through a corporation?
You can, but corporations generally don't qualify for the 2026 expanded HST rebate for owner-occupiers, and lending terms differ. Get legal and tax advice before buying this way.
What happens if I can't close?
The builder can keep your deposit and may sue for additional losses, such as the difference if it resells the unit for less. Speak to a lawyer early. Options can include an assignment, a negotiated extension or a mutual release.
Buyers from outside Canada
Can foreign buyers purchase pre-construction in Ontario?
Canada's federal ban on non-Canadians buying residential property is in effect until January 1, 2027, with some exemptions. Ontario also charges a 25% Non-Resident Speculation Tax on homes bought by foreign nationals and foreign corporations anywhere in the province. Confirm the current rules with a lawyer before buying.
Do these rules apply to permanent residents?
Canadian citizens and permanent residents are not affected by the federal ban or the NRST.
Assignments and resale
Can I sell my contract before closing?
Only if your agreement allows assignments. Most require the builder's consent and a fee. HST and income tax may apply. See our assignment sales guide.
Can I list my assignment on MLS?
Many builders restrict or prohibit MLS listings until the project is sold out. Check your agreement first.
More FAQs: Buying Process · Financing · Occupancy & Closing
About the author: Ola Otubu is a REALTOR® with Realty ONE Group Reveal, Real Estate Brokerage, and the founder of Buyprecon.ca. He represents buyers of new construction homes and condos across Ontario, from the first deposit through PDI, closing and warranty claims.
This article is general information, not legal advice. Laws change and every agreement is different. Speak with a real estate lawyer about your purchase. Sources: Condominium Act, 1998; New Home Construction Licensing Act, 2017; Tarion; Government of Ontario; Government of Canada.
Need a pre-construction lawyer?
I can refer you to real estate lawyers who review builder agreements every week, so your review happens inside the cooling-off period. There's no cost to you as a buyer.