10-day cooling-off period10일 숙려 기간 (취소 기간)

What is it?

The 10-day cooling-off period is the time the law gives a buyer of a new condo unit from the builder to change their mind. Section 73 of the Condominium Act calls it "rescission" of the agreement. You do not need a reason, there is no penalty, and your money comes back with interest.

The CAO guide describes it as "10 calendar days" and says you cancel for any reason whatsoever simply by notifying the developer in writing. The statute itself says "10 days" and does not say business days. One Tarion web page refers to "10 business day", but it is safest to count calendar days as the Act and the CAO guide do, and to confirm the exact last day with your lawyer.

The right exists only when you buy from the builder (the "declarant") or someone acting for it. When you buy a resale condo from an owner, a resale house, or a new freehold home, there is no such statutory period.

When does it start and end?

The 10 days run from the latest of these three dates:

• The day you receive the disclosure statement
• The day you receive the CAO condo buyers’ guide (Ontario’s Residential Condominium Buyers’ Guide)
• The day you receive a copy of the agreement signed by both the builder and you

The clock starts not when you sign at the sales office, but when the copy signed by the builder is in your hands too. If the documents arrive separately, count from the last one. Record the date and the method (email, paper) for each.

How do you cancel?

1. Once you decide, tell your lawyer. The law allows either you or your lawyer to send the notice.
2. Write a written notice of rescission. A phone call or telling the sales staff in person does not count.
3. The builder (declarant) or its lawyer must receive the notice within the 10 days. It is the date received, not the date sent, so use a method that leaves proof of receipt before the deadline (email plus registered mail, or whatever method the agreement specifies).
4. The builder must "promptly" refund all money paid toward the price, without any penalty or charge, together with interest (s. 73 (3)).
5. If the money does not come, have your lawyer press for it, and if that fails, claim under Tarion deposit protection (up to $20,000 for a condo). Using a statutory right to rescind is one of the situations Tarion covers.

How much interest?

Section 19 (3) of the regulation (O. Reg. 48/01) sets it. Money refunded on rescission earns interest at 2% a year below the Bank of Canada "bank rate": for April to September, the bank rate as of March 31, and for October to March, the bank rate as of September 30. For projects where no units were sold before January 1, 2023 and the builder terminates the agreement, a different rate applies (based on the policy interest rate, s. 19.1), but the CAO says the "bank rate minus 2%" rate still applies to a 10-day cooling-off cancellation.

The bank rate changes over time, so check the actual rate on the Bank of Canada website and with your lawyer. Because the money comes back within days, the interest itself is small.

What to do during the 10 days

• Have a real estate lawyer experienced in pre-construction review the agreement, the Addendum and the whole disclosure statement. The lawyer can ask for changes to the cap on adjustments, the deposit schedule, assignment terms and early termination conditions, and if the builder refuses you can cancel.
• Talk to a mortgage professional about whether you can fund the balance at a closing years away, and what happens if rates rise in the meantime.
• Check the builder’s licence, cancellation history and discipline in the HCRA Ontario Builder Directory.
• Read the first-year budget in the disclosure statement (projected fees, reserve fund), the rules (pets, short-term rentals) and the share of units the builder plans to lease.
• Talk it over with your family and add up the full cost: deposits, occupancy fees, closing adjustments, HST and land transfer tax.
• If you are going to cancel, do not wait until the last day. Send the notice with a few days to spare.

Can you cancel after the period ends?

As a rule, no. After the 10 days the agreement is firm, and if you change your mind and do not close, you can lose your deposit and be sued for the seller’s losses.

There are a few exceptions. If there is a "material change" to the disclosure statement, section 74 of the Act gives you a new 10-day right to rescind. If the builder misses the outside occupancy date in the Addendum, you have 30 days to terminate. And if the builder ends the agreement because an early termination condition was not met, you get your money back with interest.

One more thing: section 80 (3) of the Act lets you elect, before the cooling-off period ends, to pay the full balance when you take interim occupancy. You then avoid the interest portion of the interim occupancy fee. If you have the cash, it is worth discussing with your lawyer within the 10 days.

What about houses and resale homes?

There is no cooling-off period when you buy a resale home. The moment your offer is accepted it is a contract, and the only ways out are the conditions you put in the offer (financing, home inspection, status certificate review). That is why conditional offers matter in resale.

The 10-day rule in the Condominium Act also does not apply when you buy a new freehold home from a builder. Instead, under the Tarion Addendum, if the builder puts "early termination conditions" in the agreement you get a short 3-business-day cooling-off period to review them, and if project viability conditions (for example, a minimum number of sales) are included you get a 10-day review period. These rights exist only when such conditions are present, so check with your lawyer what conditions your Addendum contains.

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