The 10 days after you sign a pre-construction condo: what to do, and how your deposit is protected

Sales offices for pre-construction condos (new homes sold before they are built) can make you feel you should sign on the spot. Fortunately, Ontario’s Condominium Act gives buyers of new condo units a 10-day cancellation period. This post explains when those 10 days start, what to check in the meantime, and how your deposit is protected, based on the text of the Act and Tarion’s guidance. It is general information, not legal advice; review your actual agreement with a lawyer.

When the 10 days start

Section 73 of the Condominium Act says a written notice of rescission must reach the declarant (the developer) or the declarant’s lawyer “within 10 days of the latest of” three dates.

• 10 daysTime you have to cancel (Condominium Act s. 73)
• 3 datesStart dates — the clock runs from the latest one
• $20,000Tarion’s condo deposit protection limit (with the s. 81 trust duty on top)

If any one of the three arrives late, the 10 days start that much later. Write down the date you received each one. What counts is the day your notice is received, not the day you send it.

What happens if you cancel

• The developer must “promptly refund, without penalty or charge” all the money you paid, plus interest at the prescribed rate from the day they received it to the day they refund it (s. 73 (3)).
• You do not have to give a reason. Changing your mind is enough.
• The notice must be in writing and must be received by the developer or their lawyer within the 10 days. Usually your lawyer sends it and keeps proof of receipt.
• This right applies when you buy a new condo unit from a developer. There is no such statutory period when you buy a resale home, and new freehold homes (houses or towns where you own the land) follow the terms of the agreement, so ask your lawyer.

What to do during the 10 days

1. Give the whole agreement and disclosure statement to a lawyer, ideally one with pre-construction experience. In particular, check whether the extra amounts charged at closing (adjustments such as development charges, education levies, meter installation and Tarion enrolment fees) are capped, and if not, whether you can ask for a cap.
2. Line up the deposit schedule with your cash plan. Deposits of 15% to 20% are usually spread over a few years, with more due at occupancy. Put every date and amount in your calendar.
3. Think about whether you can get a mortgage at occupancy, not just today. Occupancy is years away and no one knows the rates then. Talk to a bank or mortgage broker early.
4. Read the occupancy date and the delay clauses. The Tarion documents attached to the agreement list critical dates such as the tentative and firm occupancy dates. The developer can move the date by following set rules.
5. Check whether assignment (selling your agreement to someone else before occupancy) is allowed and what it costs. This matters most if you are buying as an investment.
6. If there is any chance you will cancel, tell your lawyer early, not on day nine. If the notice arrives late, the right is gone.

How your deposit is protected

Section 81 of the Condominium Act says that money paid for a proposed unit must be received and held in trust, with interest, by a prescribed trustee or the developer’s lawyer, so the developer cannot simply spend it. That is why deposit cheques are usually made out to a law firm “in trust”, not to the developer. Always check the payee name.

Tarion (Ontario’s new home warranty body) also protects deposits. According to Tarion, if the builder terminates the agreement your deposit must be returned in full within 10 days, and if the builder does not return it, Tarion provides deposit protection of up to $20,000 for a condo unit. It applies when the builder goes bankrupt, fundamentally breaches the agreement, or you have a statutory right to treat the agreement as terminated.

New freehold homes are different. Tarion says coverage is up to $100,000, and from April 1, 2026 purchasers must give Tarion notice of the purchase within 45 days of signing to qualify for the maximum coverage (the change to coverage amounts is deferred to January 1, 2027). If you sign for a new house or town, do not forget to register within 45 days.

The Tarion limit for condo deposits ($20,000) looks small, but the trust duty in s. 81 sits on top of it. Which protection applies, and how far, depends on your agreement and disclosure statement, and your lawyer should judge it. Tarion itself says to consult a lawyer before treating your agreement as terminated.

Common misunderstandings

• “Ten days from the day I signed” — no. It is from the latest of receiving the disclosure statement, the guide and the fully signed copy of the agreement.
• “I can cancel by phone” — no. A written notice must be received.
• “If the terms do not work out later, I can still cancel” — after the 10 days, you can only cancel in the situations your agreement or the Act allows (for example, a material change in the disclosure, or failure to complete by a set date), and that needs a lawyer’s judgment.
• “I can send the deposit to the developer’s account” — check that it goes to a trust account (a law firm, in trust).