TARION - Delayed Closing

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Delayed Closing Protection for Freehold Homes

If a freehold home is delayed beyond five days without the builder providing proper written notice to the purchaser, or if the delay is beyond 120 days for any reason, the homeowner may be entitled to compensation.

If the homeowner submits a Delayed Closing Form together with all receipts, he/she may be able to claim up to $100 per day in living expenses (such as temporary accommodation costs), plus other direct costs caused by the delay (such as extra moving and storage costs), up to a maximum of $5,000.

Without supporting receipts or other proof of expenses, the maxium amount a homeowner may claim per day for living expenses depends on the date of possession of their new home.

Homeowners with a date of possession of May 1, 2004 to December 31, 2004 may claim up to $60 per day for living expenses; homeowners with a date of possession of January 1, 2005 to December 31, 2005 may claim up to $80 per day for living expenses; and homeowners with a date of possession on or after January 1, 2006 may claim up to $100 per day for living expenses.

In all cases, the maximum amount that can be claimed for living expenses and other direct costs caused by the delay (such as extra moving and storage costs, and receipts are required for these costs) remains at $5,000. Homeowners who choose the "no receipts" option for living expenses are advised to keep a copy of any relevant receipts you may have or any other proof of claim as these may be required to support a claim if the builder requests a re-assessment.

When and for how long can a builder delay closing?

The Ontario New Home Warranties Plan Act specifies that if a builder requires additional time for construction, they may extend your closing date, without paying compensation, under the following circumstances:

Major Delay (of more than 15 days)
The builder must notify the purchaser in writing at least 65 days prior to the original closing date in the purchase agreement in order to delay your closing up to a maximum of 120 days. As part of this notification, the builder must also set a new closing date which will be referred to as the �extended� closing date.
Minor Delay (of 15 days or less)
The builder must notify the purchaser in writing at least 35 days prior to the original or extended closing date in the purchase agreement in order to delay closing up to 15 days. The builder must also set a new closing date at that time. However, if there has already been a major delay, the combined delay cannot exceed 120 days.

A builder can delay possession of a new freehold home for up to five days without giving notice or compensation. Also, please note there is no compensation for delays caused by events beyond the builder's control, such as strikes or floods, or delays which the purchaser causes.

When can a purchaser claim compensation?

The homeowner will have one year from the date of possession to make a claim for compensation by submitting to both Tarion and the builder, a completed Delayed Closing Form with copies of all documents required by this Form. In order to be compensated, homeowners must first close the sale. If the builder refuses to close, homeowners should call 1-877-9TARION (1-877-982-7466) for information on how this will affect coverage.

Making a Claim for Delayed Closing

Homeowners who have not received proper notice of a delay, or where the delay exceeds the maximum permitted, should contact their builder and use their best efforts to resolve the delayed closing claim directly with the builder.
If the builder fails to resolve the delayed closing claim, the homeowner should request a Delayed Closing Form package by calling 1-877-9TARION (1-877-982-7466).

IMPORTANT
The homeowner must submit the delayed closing claim according to the service rules described in the Delayed Closing Form package and in the Delayed Closing/Delayed Occupancy section of the Homeowner Information Package.

Without supporting receipts or other proof of expenses, the maximum amount a homeowner may claim per day for living expenses depends on the date of possession of their new home. Homeowners with a date of possession of May 1, 2004 to December 31, 2004 may claim up to $60 per day for living expenses; homeowners with a date of possession of January 1, 2005 to December 31, 2005 may claim up to $80 per day for living expenses; and homeowners with a date of possession on or after January 1, 2006 may claim up to $100 per day for living expenses. In all cases, the maximum amount that can be claimed for living expenses and other direct costs caused by the delay (such as extra moving and storage costs, and receipts are required for these costs) remains at $5,000.