A pre-construction condo is sold in a sales centre, with a model suite, a rendering and a deposit schedule. It is bought in a document that can run to well over a hundred pages: the agreement of purchase and sale, the disclosure statement, the Tarion addendum and a stack of schedules. The rendering is what people remember. The schedules are what decide how much the unit actually costs and when you actually get it. Here is how to read them.
Why This Matters in York Region Right Now
Most of the pre-construction supply in the area I work in is concentrated in a few places: around the Vaughan Metropolitan Centre, along the Yonge and Highway 7 corridor at Langstaff and Richmond Hill Centre, and in Markham Centre. The Yonge North Subway Extension is planned to bring five stations and an expected 40,000-plus homes across the Bridge and High Tech station areas. That is why so many projects are marketed on transit. The subway is a public project with its own timeline; nothing in your purchase agreement ties the builder’s obligations to it, and nothing in it compensates you if the station opens later than the brochure implied.
The resale market is the other reason to read carefully. TRREB’s September 2026 figures put the GTA-wide average condo apartment price at $605,257, with the overall average price down 5.1% from a year earlier and 4.6 months of inventory. A buyer who signed a pre-construction agreement at a price set in a stronger market can reach final closing to find that the lender’s appraisal is below the contract price. The contract price does not change. The gap is the buyer’s to fund.
The Cooling-Off Period
Ontario’s Condominium Act gives the buyer of a new condominium unit from a builder a ten-day period to rescind the agreement, counted from the later of receiving the signed agreement and receiving the disclosure statement. Ten days is the most useful window in the whole transaction. Use it to have a lawyer review the agreement before you are committed, not after. Many buyers sign at the sales centre and spend the ten days celebrating.
If the builder later makes a material change to the disclosure statement, the buyer may have a further right to rescind. Whether a particular change is material is a legal question for your lawyer.
Deposits
Pre-construction deposits are usually paid in instalments over the first year or two, and they are large. The statutory protection for deposits on new condominiums has two layers: Tarion covers deposits up to a limit, and the Condominium Act requires deposits above that limit to be held in trust or secured by deposit insurance. Ask your lawyer how your specific deposits are held, and keep every receipt.
Also check what happens to interest on deposits, and whether the schedule asks for further deposits on upgrades, parking or a locker.
Occupancy Is Not Closing
This is the clause that surprises the most people. In most Ontario condo projects you move in, or take possession for a tenant, at interim occupancy, before the building is registered as a condominium. During that period you do not own the unit yet. You pay the builder a monthly occupancy fee, typically made up of interest on the unpaid balance, estimated common expenses and estimated property tax. None of it reduces the price. Final closing, when title transfers and your mortgage funds, comes after registration, which can take months.
For an investor this matters twice over: rent collected during occupancy may not cover the occupancy fee, and the mortgage does not start until final closing, which may be at a different rate from the one you assumed.
Delays and the Tarion Addendum
The Tarion addendum sets out the occupancy dates the builder can rely on: a first tentative date, the ability to set later dates with notice, a firm date, and an outside date. It also sets out when the buyer is entitled to compensation for delay and the cap on that compensation. Read the dates, write them down, and note that the builder can also extend for reasons the addendum treats as unavoidable. Separately, the addendum lists the limited early-termination conditions a builder can rely on, such as failing to obtain certain approvals or financing by a stated date. If the builder terminates on one of those conditions, you get your deposit back, but not the time or the market you lost.
The Schedule That Adds to the Price
Look for the clause, usually in a schedule, that lists adjustments charged to the purchaser on final closing. Common items are development charges and education levies above a stated amount, utility meter and connection charges, Tarion enrolment, the cost of registering the condominium documents, and a share of any increase in levies imposed after signing. Some agreements cap these; many do not. A cap is worth negotiating for, and it is easier to negotiate before signing than after.
HST is usually included in the price with the new housing rebate assigned to the builder. If you are buying to rent and will not live in the unit, that rebate may not be available to you in the normal way, which can change your closing number. That is a question for your lawyer and accountant.
What the Builder Can Change
Agreements usually let the builder substitute finishes and materials of equal or better quality, adjust ceiling heights and room dimensions within a tolerance, and add bulkheads for mechanical systems. Check how the unit size is measured: the figure on the floor plan may include walls and be calculated differently from how you would measure the space you live in. The disclosure statement explains the method.
Assignment
If you may want to sell before closing, the assignment clause matters as much as the price. Many builders prohibit assignment without consent, charge a fee, restrict marketing on MLS, or forbid assignment until a certain stage. An assignment also has its own tax consequences. Read this clause as if you will need it.
Frequently Asked Questions
Can I back out of a pre-construction condo in Ontario?
For a new unit bought from a builder, the Condominium Act gives you ten days to rescind after receiving the signed agreement and disclosure statement. After that, you are generally bound. Ask a lawyer about your specific situation.
What is an occupancy fee?
A monthly payment to the builder between interim occupancy and final closing, usually interest on the unpaid balance plus estimated common expenses and taxes. It does not reduce the purchase price.
Are my deposits safe?
Deposits on new condominiums are protected up to a limit through Tarion, and the Condominium Act requires amounts above that limit to be held in trust or insured. Confirm with your lawyer how your deposits are held.
What happens if the appraisal comes in low at closing?
The lender bases the mortgage on the appraised value. If it is below the contract price, the buyer generally has to cover the difference in cash. Speak to a mortgage professional well before closing.
Should a lawyer review the agreement before I sign?
Yes, or at the very least within the ten-day rescission period. This article is general information, not legal advice.
Looking at a project near the VMC, Langstaff or Markham Centre and want a second set of eyes before the ten days run out? Reach out for buyer representation and we can compare the agreement against what similar resale units are actually selling for, or start with how the Vaughan market is behaving.