• A male and female builder at a construction site


Condominium Cancellations

Cancelled condominium projects can result in significant purchaser impact. According to Tarion, a project is considered “cancelled” when it is determined that the project will not proceed.  

As per the Registrar’s Notice entitled Cancellation of Condominium Projects issued on April 23, 2018, a registered Vendor of a condominium project is required to notify Tarion in advance of taking steps to cancel a project, should they find themselves in a situation where they will be unable to fulfil the early termination conditions in the Addendum, or should they otherwise be unable to complete the project (e.g. due to frustration of contract). 

The Registrar’s Advisory issued October 23, 2019 entitled New Mandatory Condo Information Sheet & Upcoming Changes to the Ontario Builder Directory outlines new disclosure requirements for certain condominium purchase agreements. Effective January 1, 2020, the Information for Buyers of Pre-Construction Condominium Homes About the Possible Termination of Purchase Agreement (information sheet)*  must be attached to the front of all purchase agreements and must be signed by the purchaser to acknowledge receipt. A key purpose of the document is to highlight the potential risks of purchasing a pre-construction condominium project, namely that the project may be cancelled. The October 23, 2019 Advisory also states that information about all condominium projects cancelled as of January 1, 2018 is displayed on the Ontario Builder Directory. 

Tarion takes purchaser impact resulting from cancelled projects very seriously. As a result, it is Tarion’s mandate to conduct thorough postmortem reviews of cancelled condominium projects. Tarion’s assessment aims to determine whether commercially available steps were taken by the vendor to complete the project; whether the cancellation was in accordance with the Addendum; and whether the cancellation was conducted in good faith. As part of its review, Tarion collects information including (but not limited to) the following: 

1.  Two samples of an executed purchase agreement for the project, including the Addendum and Information Sheet; 

2.  The number of purchase agreements entered into for the project; 

3.  The number of purchase agreements that were mutually released and/or terminated (this information will be posted on the Ontario Builder Directory); 

4.  A detailed description of the reason(s) for cancelling the project, together with any supporting documents; 

5.  A copy of the notice sent to purchasers to terminate the purchase agreements (this information will be posted on the Ontario Builder Directory once purchasers are notified by the V/B); 

6.  If purchase agreements were terminated because an early termination condition in the Addendum was not satisfied, request a detailed explanation of:

  • Which condition was not satisfied; 
  • Why the condition was not satisfied, including the steps the vendor/builder took to satisfy the condition and the dates on which those  steps were taken;  
  •  Any supporting documents pertaining to the above steps taken; 
  • Why the condition was not waived; and

  7.    The total amount of deposit monies collected and held in trust as well as the current amount held in trust;

  8.    A completed statutory declaration (to be provided by Tarion);

  9.    An executed statutory declaration form the vendor’s escrow agent;

 10.  Evidence that deposit monies were returned to purchasers (e.g. copies of cheques, etc.); and

 11.  An explanation of the vendor’s plans for the site of the project after all purchase agreements have been cancelled.

In certain cases, Tarion may retain third party consultants (e.g. cost consultants, forensic accounting consultants, marketing consultants, etc.) to assist with its review. The cost associated with the engagement of such consultants may be invoiced to the registered vendor.

Further, there may be cases where Tarion requests that the vendor does not engage in additional sales and/or the re-marketing of the project until such time as the cancellation review is completed. 

Upon completion of its review, Tarion issues a letter to the vendor outlining its key findings and any potential license restrictions or additional requirements for existing and/or future registrations. These may include, but are not limited to, increased security requirements; additional proof of financing availability; the achievement of certain municipal approvals prior to entering into sales; periodic status update meetings with Tarion; or a notice of proposal to revoke a license; etc. 

For questions about a condominium project or the condominium cancellation process, please email underwriting@tarion.com or call 1-877-982-7466 ext. 3001. 


* It applies to condominium projects where the first arm’s length purchase agreement for: the project, or phase of a project is signed on or after January 1, 2020. The information sheet must be used with every Purchase Agreement for a residential unit in a standard condominium corporation and phased condominium corporation.