Buying pre-construction condos in Ontario is an exciting opportunity, but it comes with unique risks and considerations. Before signing any agreement, it’s crucial to ask the right questions to ensure your investment is secure and your expectations are realistic.
Why Buy Pre-Construction Condos in Ontario?
Pre-construction condos in Ontario offer buyers the chance to own a brand-new home, often at a lower price than resale units. They provide flexibility in payment schedules and the ability to customize finishes. However, the process is more complex than buying a resale condo, so thorough due diligence is essential .
1. Who Is the Builder and What Is Their Track Record?
Before anything else, research the developer’s reputation. A reputable builder reduces the risk of construction delays, financial issues, or poor-quality workmanship. Use resources like the Ontario Builder Directory to check the builder’s license, claims history, and completed projects. Look for red flags such as frequent project delays or legal issues.
2. What Is the Deposit Structure?
Deposit structures for pre-construction condos in Ontario are usually staggered. Typically, you’ll pay 20% of the purchase price, split into several payments over a year or more. Make sure you understand the payment schedule and ask if there are any incentives or flexibility in the structure.
5% at signing (cashed after the cooling-off period)
5% in 30 days
5% in 60 or 90 days
5% in 120/240/365 days or at occupancy
Knowing the deposit structure helps you plan your finances and avoid surprises.
3. What Are the Total Closing Costs?
Closing costs can add up quickly. Besides the purchase price, you’ll need to budget for:
Land transfer taxes
Legal fees
Development charges
Utility hook-up fees
HST (if applicable)
Ask for a detailed breakdown of all closing costs. Have your lawyer review the purchase agreement to identify any hidden fees.
4. What Is the 10-Day Cooling-Off Period?
Ontario law provides a 10-day “cooling-off” period for all new condo purchases. This gives you time to review the agreement, consult a lawyer, and secure financing without penalty. If you change your mind within these 10 days, you can cancel the contract and get your deposit back.
Use this period to:
Review the Agreement of Purchase and Sale with a real estate lawyer
Compare other projects and incentives
Confirm your mortgage pre-approval
5. What Are the Risks of Delays or Cancellations?
Construction delays are common in pre-construction condos. Ask about the builder’s history with project timelines and what compensation is available if your unit is delayed. Under Tarion Warranty Corporation regulations, you may be eligible for up to $7,500 if occupancy is delayed beyond the agreed date.
Also, inquire about the process if the project is canceled. Make sure your deposit is protected and refundable.
6. What Warranty Coverage Is Included?
All new condos in Ontario come with warranty coverage under the Ontario new home warranty program. This covers:
One-year warranty for defects in workmanship and materials
Two-year warranty for major systems and water penetration
Seven-year warranty for structural defects
Understand what is and isn’t covered, and ask how to file claims if issues arise.
7. What Are the Interim Occupancy Fees and Rules?
Before the building is fully registered, you may move in during the interim occupancy period. During this time, you’ll pay “occupancy fees,” which are similar to rent but do not count toward your mortgage principal.
Ask:
How long is the expected interim occupancy period?
What are the monthly fees?
What are your rights and responsibilities during this time?
This will help you budget and avoid surprises before final closing.
Additional Tips for Buying Pre-Construction Condos in Ontario
Always have a real estate lawyer review all documents before signing.
Research the neighborhood and future development plans.
Check if parking and locker are included or cost extra.
Review the condo corporation’s rules and anticipated maintenance fees.
For more in-depth guidance, visit the Condominium Authority of Ontario’s official guide and Tarion’s tips for buying pre-construction homes .
Ready to Buy Pre-Construction Condos in Ontario?
Buying pre-construction condos in Ontario can be a smart investment when you ask the right questions and work with experienced professionals. If you’re ready to take the next step, contact the Bridge team for expert advice and personalized guidance.
