Purchasing a new build home in Ontario — whether in Barrie, Innisfil, or across Simcoe County — can be an exciting experience. You get a brand-new home, modern finishes, and often the chance to customize certain features. However, buying directly from a builder comes with unique legal considerations that differ from resale transactions.
Working with an experienced real estate lawyer ensures your rights are protected throughout the process.
Understanding Builder Agreements
Builder purchase agreements are often lengthy and complex, containing clauses that heavily favour the builder. Unlike resale homes, there is no standard form of agreement for new builds. Each builder drafts their own contract, which may include:
- Extended closing dates or delays for construction or registration
- Adjustments and extra costs for things like utility hookups, grading, or development fees
- Builder warranties and Tarion coverage details
- Conditions for upgrades, deposits, and cancellations
Before you sign, your lawyer should review the agreement during the 10-day cooling-off period (for most new condo purchases) or before finalizing a freehold purchase.
Your Rights Under Tarion Warranty Protection
All new homes in Ontario are covered by the Tarion Warranty Program, which protects buyers from major construction defects and incomplete work. Tarion coverage typically includes:
- Deposit protection (up to specific limits)
- Delayed closing and occupancy coverage
- One-year warranty for defects in materials and workmanship
- Two-year warranty for plumbing, electrical, and mechanical systems
- Seven-year warranty for major structural defects
Your lawyer will confirm that the builder is registered with Tarion and that all warranty protections apply to your purchase.
Hidden Costs in New Build Purchases
Many buyers are surprised by “adjustments” charged at closing. These can include:
- Development or education levies
- Hydro and water meter installation
- Landscaping and grading deposits
- HST on the purchase price (in some cases)
An experienced real estate lawyer can help you estimate and budget for these costs before closing, ensuring there are no last-minute surprises.
HST and Rebate Rules
Most builder prices include HST, but rebates are available for buyers who intend to use the property as their principal residence.
If you’re purchasing the property as an investment or rental, you may still qualify for the New Residential Rental Property Rebate, but it must be applied for after closing.
Your lawyer can help determine eligibility and ensure the rebate is properly claimed.
Why Legal Review Is Essential
Because new build contracts often allow the builder flexibility — such as substituting materials, changing layouts, or extending deadlines — it’s crucial to understand exactly what you’re agreeing to.
Your lawyer can:
- Identify one-sided clauses and negotiate fairer terms
- Ensure your deposit is protected
- Clarify HST and adjustment responsibilities
- Guide you through Tarion coverage and final closing steps
Final Thoughts
Buying a new build home in Ontario is a major milestone — but it also comes with unique legal and financial details that require careful attention.
Working with an experienced real estate lawyer helps ensure your investment is protected and your closing goes smoothly.
If you’re considering a new build purchase or have questions about your agreement, contact Chapman Steffler LLP for trusted legal advice tailored to your situation.
Frequently Asked Questions
Can a builder delay my closing date?
Yes, but only under specific circumstances outlined in your agreement and Tarion’s delayed closing rules.
What happens if my builder goes bankrupt?
Tarion provides some protection for deposits, but coverage limits apply — another reason why legal review is essential before signing.
Do I need a lawyer for a new condo purchase?
Absolutely. Your lawyer will review your disclosure statement, verify builder registration, and ensure your deposits and occupancy rights are protected.
What happens if I cannot close on the day of closing?
If you’re unable to close on the agreed date, the builder may charge daily interest or additional fees, and in serious cases, could terminate the agreement and keep your deposit.
It’s crucial to contact your real estate lawyer immediately — they can often negotiate extensions, help resolve financing delays, or prevent a default under the purchase agreement.
Call to Action:
For experienced guidance on buying a new build home in Barrie and Simcoe County, contact Chapman Steffler LLP today or visit our Real Estate Law page for more information.
