Tarion Tips on Buying a Pre-Construction Home or Condominium in Ontario

Tarion is a not-for-profit consumer protection organization established by the Ontario
government to administer the province’s new home warranty program. Its role is to ensure that
buyers of new homes receive the coverage they are entitled to under their builder’s warranty.
Tarion has published a number of resources, tools and guides published on its website to
ensure that new home buyers have peace of mind that they are getting the home they were
Buying a pre-construction home or condominium can be both challenging and overwhelming.
Tarion has published the following tips on buying a pre-construction home or condominium to
assist new home buyers navigate this process:

  1. Research your builder
    The Ontario Builder Directory (OBD) is an online resource that can help new home buyers
    confirm if their builder is licensed to build new homes in Ontario. It also provides more
    information about the builder. For example, how many homes they have built, what their claims
    history is and, in the case of condominiums, what projects are underway or have been
    completed. Most recently, OBD introduced a new feature called Conviction Search, which
    allows new home buyers to see whether a particular company or individual has been associated
    with any illegal building convictions during the past 10 years.
  2. Understand your purchase agreement before you sign
    The purchase agreement is one of the most important documents in the new home buying
    process. It is a legal and binding contract between the new home buyer(s) and the vendor, so it
    is important that new home buyers have a lawyer review the document before signing.
    A lawyer can also help new home buyers understand the Addendum attached to the purchase
    agreement, which includes closing dates and potential delays, closing fees and other possible
    additional costs. A lawyer can also explain when the purchase agreement may be terminated
    and, if that happens, how the deposit will be protected under the Addendum.
  3. Learn about your warranty coverage
    Under the Ontario new home warranty and protection plan, all new homes have a warranty for,
    among other things, workmanship, materials, Ontario Building Code violations, water
    penetration and defects in the home’s structure and systems. The warranty coverage is broken
    into one-year, two-year and seven-year warranties, and it is important to understand what types
    of defects and conditions are covered during each warranty period.
    Effective February 1, 2021, a Warranty Information Sheet must be attached to every new home
    Agreement of Purchase and Sale (APS). The Warranty Information Sheets vary based on new
    home types and can be found on Tarion’s website.
  4. Prepare for your Pre-Delivery Inspection (PDI)
    Before new home buyers take possession, they will have an opportunity to walk through their
    new home with the builder to make sure that nothing is missing, damaged or incomplete. New
    home buyers are encouraged to review of Tarion’s PDI Checklist before the walk-through and
    reminded to add their own checkpoints based on their property and its unique details.
  5. Special considerations for condominium buyers
    Buying a pre-construction condominium is slightly different from purchasing a new house. New
    condominium buyers should ask their real estate lawyer to inform them about their rights and
    responsibilities outlined in the purchase agreement, including the following:
    a. Cooling off period
    New condominium buyers have an initial 10 days under the Condominium Act to cancel
    a sales agreement. During this time, new condominium buyers should be sure to review
    their purchase agreement and the disclosure statement.
    b. Interim occupancy
    New condominium buyers might move into their unit before the project is completed and
    registered. This is called interim occupancy. It is important to ask a real estate lawyer
    about the following:
     condominium ownership;
     monthly payment of interim occupancy fees;
     duration of interim occupancy; and
     other rights and responsibilities during the interim occupancy period.

Still have questions about purchasing a pre-construction home or condominium? Contact
Malorie Mosher, Associate Lawyer at Lockyer + Hein LLP to learn more: mmosher@lhlaw.ca /


Lockyer Hein Blogs