Buying pre-construction means buying from a builder before the home is built, often years ahead of closing. The price is set today, deposits are spread out, and you choose finishes.
It also comes with risks: closing delays, development charges, assignment rules and HST on new homes. We walk you through the agreement before you sign.
What to know before you sign
You have 10 days to change your mind on a new condo. Under section 73 of Ontario’s Condominium Act, buyers of a new condo from a builder can cancel within 10 calendar days of receiving the signed agreement and the disclosure documents, and get their deposit back. This does not apply to resale homes or assignments.Deposits are protected, up to a limit. Tarion protects deposits on new condos up to $20,000, and the Condominium Act requires deposits above that to be held in trust or secured. Freehold homes have their own Tarion deposit protection limits.Check the builder. Every new-home builder in Ontario must be licensed by the Home Construction Regulatory Authority (HCRA). You can look them up in the Ontario Builder Directory before you sign.Watch the closing costs. New homes can add development charges, utility hook-ups and HST adjustments at closing. We read the agreement with you and your lawyer so there are no surprises.