For purchase agreements signed on or before June 30, 2008
Under the Delayed Closing Warranty, the builder guarantees that the home will be ready by the closing date specified in the purchase agreement or by a date that has been properly extended. If the closing date is delayed beyond the original closing date or properly extended date (as described below), then compensation may be payable for such delay.
If the homeowner submits a Delayed Closing/Occupancy 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 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) remains at $5,000. Homeowners who choose the "no receipts" option are advised to keep a copy of any relevant receipts they may have or any other proof of claim as these may be required to support a claim.
When and for how long can my 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:
1. Major Delay (of more than 15 days)
Your builder must notify you in writing at least 65 days prior to the original closing date in your 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.
2. Minor Delay (of 15 days or less)
Your builder must notify in writing at least 35 days prior to the original or extended closing date in your purchase agreement in order to delay your 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.
Please note there is no compensation for delays caused by events beyond the builder's control, such as strikes or floods, or delays which you cause.
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/Occupancy Form, which can be obtained here. In order to be compensated, homeowners must first close the sale of their home. If the builder refuses to close, homeowners should contact Tarion.
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 best efforts to resolve the delayed closing claim directly with them.
- If the builder fails to resolve the delayed closing claim, the homeowner should obtain a Delayed Closing/Occupancy Homeowner Instruction Guide and Form.
The homeowner must submit the delayed closing claim according to the service rules that are described in the Delayed Closing/Occupancy Homeowner Instruction Guide and in the Delayed Closing/ Occupancy section of the Homeowner Information Package
If the closing date in your purchase agreement is delayed beyond a total of 120 days, you have the right to terminate the purchase agreement between day 121 and day 130. For example, if your original closing date is February 1, 2009, it can be extended until June 1, 2009. If the purchase is not completed by then, you would have from June 1 to June 10, 2009 to terminate the agreement.
If you don’t terminate the agreement by day 130 (June 10 in the example), the builder is entitled to additional delays of up to 120 days total.
If the further 120 days expire (on October 9, 2009 in the example) without the purchase being completed and you cannot agree with your builder to a new closing date, under the terms of your purchase agreement the agreement may automatically terminate and, if so, the builder must return your deposit with interest.
Please note, if you sign an agreement to amend or change your closing date, this may affect your right to compensation and you may face fresh delays as described on this page.
If you are unsure about your rights regarding delayed closing, you may wish to seek the advice of a lawyer.