New Construction & Builder Agreements

Purchasing a newly built home or condominium in Ontario is an exciting milestone — but it comes with a set of legal considerations that are very different from purchasing a resale property. Builder agreements are lengthy, heavily favour the builder, and contain provisions that many purchasers do not fully understand until problems arise. At Goldstone Law Professional Corporation, we help buyers navigate the legal complexities of new construction purchases and protect their rights throughout the process. From reviewing the builder’s Agreement of Purchase and Sale before you sign, to managing the occupancy closing and final closing, our lawyers provide experienced guidance at every stage of your new home purchase.

Why New Construction Purchases Are Different

When you purchase a newly constructed home or condo unit, you are typically entering into an Agreement of Purchase and Sale months or even years before you will take possession. The builder’s standard form agreement is drafted by the builder’s lawyers to protect the builder’s interests. It contains provisions relating to construction delays, price adjustments, deposit structures, permissible changes to plans and specifications, and dispute resolution mechanisms that can significantly affect your rights as a purchaser. Unlike a resale transaction, where an agent’s standard form agreement is used and the terms are more balanced, a builder’s agreement is a take-it-or-leave-it document in many respects. Having a lawyer review it before you sign allows you to understand exactly what you are agreeing to and, in some cases, negotiate modifications or identify deal-breaking provisions.

Tarion Warranty Corporation Coverage

New homes in Ontario are covered by statutory warranties administered by Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act. These warranties include coverage for defects in materials and workmanship, water penetration, structural defects, and delayed closing compensation. Understanding what is and is not covered by Tarion — and how to properly document and assert warranty claims — is an important part of protecting your investment in a new home. Our lawyers advise new home buyers on their Tarion rights and obligations, including the proper procedure for submitting warranty claims and the time limits that apply.

Occupancy Closings vs. Final Closings

Condominium purchases in Ontario involve two distinct closing events. The occupancy closing occurs when the unit is substantially complete and the purchaser is permitted to take possession, but the condominium corporation has not yet been registered. During the occupancy period, the purchaser pays an occupancy fee (commonly called phantom rent) instead of a mortgage payment. The final closing occurs when the condominium is registered with the province, and the title is transferred to the purchaser. Both closings require legal involvement and have their own documentation and financial requirements.

Our New Construction Legal Services Include

• Pre-signing review and explanation of the builder’s Agreement of Purchase and Sale
• Advice on Tarion warranty coverage and your statutory rights as a new home buyer
• Review and negotiation of builder amendments and addenda
• Management of the occupancy closing process for condominium purchases
• Coordinating the final closing, including title registration and mortgage registration
• Reviewing Statement of Critical Dates and advising on closing delay compensation
• Advising on HST/GST rebate eligibility for new home purchases

HST New Housing Rebate

New homes purchased directly from a builder in Ontario are subject to Harmonized Sales Tax (HST). However, buyers who meet certain criteria are eligible for the Federal New Housing Rebate and the Ontario New Housing Rebate, which can reduce the net HST payable on the purchase. The rebate eligibility rules are complex and depend on the intended use of the property, the purchase price, and other factors. Our lawyers advise on rebate eligibility and ensure that the rebate is properly claimed as part of the transaction.

Can I negotiate with a builder on their Agreement of Purchase and Sale?

In some cases, particularly in slower market conditions, builders may be open to certain amendments. However, builders are generally reluctant to modify their standard form agreements significantly. The more important goal is to have a lawyer review the agreement so that you fully understand what you are signing before you commit your deposit.

What is a Statement of Critical Dates?

The Statement of Critical Dates is a mandatory Tarion form that accompanies every new home purchase agreement in Ontario. It sets out the scheduled closing date and the permitted delayed closing dates. Builders are entitled to delay closing up to the permitted date without owing compensation; beyond that date, they may owe the buyer delayed closing compensation under the Tarion warranty.

Contact Goldstone Law before you sign a builder’s agreement. Our experienced real estate lawyers will ensure you understand your rights and obligations before you commit.