Skip to main content

Main navigation

Delayed Occupancy Warranty & what it covers

You’ve made the purchase and you’re ready to move in. Make sure you understand the next steps in your journey, as well as your rights as a new home buyer in Ontario.

Every builder of a new condominium in Ontario must provide the delayed occupancy warranty to buyers at the time the purchase agreement is signed. Through this warranty your builder is guaranteeing that your condominium unit will be ready for occupancy by a mutually agreed upon Occupancy Date, or by an Occupancy Date that has been properly extended. 

Details about the delayed occupancy warranty are provided in the Addendum attached to your purchase agreement. If you are unsure about your rights regarding occupancy delays you may​ wish to seek the advice of a lawyer. Your builder has the option of providing one of two types of Occupancy Dates: Firm & Tentative. Below is an outline of each.

Firm Occupancy Dates

When your builder is confident your condominium unit can be ready for occupancy by a specified date. If the date is not met, your builder is required to provide delayed occupancy compensation.

What it is & how it works

Details about the delayed occupancy warranty are provided in the Addendum, which your builder is required to attach to your purchase agreement. 

The first page of the Addendum is a Statement of Critical Dates which must be signed by both you and your builder. It clearly indicates the date when your builder expects to finish your condominium unit and the latest possible date for permitted extensions. 

The following key dates are provided:

The Firm Occupancy Date

The date that you and your builder agreed your condominium unit will be ready for you to move in. If this date is not met, your builder must set a Delayed Occupancy Date and you are entitled to delayed occupancy compensation.

 

The Outside Occupancy Date

This is the latest date that your builder agreed to provide you with occupancy of your condominium unit. You and your builder agree upon this date at the time of signing the purchase agreement. 


The above dates must fall on a business day as defined in the Addendum.

The Purchaser’s Termination Period

If your condominium unit is not ready for occupancy by the Outside Occupancy Date, you have a 30-day period in which to terminate the agreement.


You may wish to use the Critical Dates calculator to help you determine the various dates related to your home’s occupancy. 

Occupancy dates must not be “floating dates” dependent on some other event. They must be calendar dates or you may be entitled to terminate your purchase agreement.

 

Early termination conditions of sale & acceptable conditions

Early Termination Conditions

Under the Condominium Act you are entitled to a 10 business day ‘cooling off’ period to review your purchase agreement. You may choose to terminate the agreement during this period if you wish. 

The Addendum contains a section which explains any Early Termination Conditions that apply to your deal. Such conditions may be included if some external approval or event is required before the transaction can be finalized, however only the types of conditions listed in the Addendum are permitted. Conditions which are not permitted are not enforceable. You should review these conditions during the ‘cooling off’ period.

Any condition that is included must be accompanied by a date by which it will be satisfied. If the condition is not satisfied by that date, the purchase agreement may be terminated. Your builder is required to provide you with confirmation of if and when each Early Termination Condition is satisfied.

Acceptable Early Termination Conditions

Most allowable Early Termination Conditions are related to approvals to allow the condominium project to be built and occupied. Examples of such conditions include:

  • Minimum sales threshold for the project
  • Confirmation of project financing
  • Approval of site plan or other development agreement 
  • Easements or similar rights serving the property or surrounding area
  • Completion of hard services such as roads, water and sewer lines, and other utilities


Each condition must be set out separately, be specific as to the type of approval needed, and identify the approving authority.

Unavoidable Delays & Occupancy Dates

An unavoidable delay is an extraordinary circumstance where an Occupancy Date may need to be delayed through no fault of the builder or purchaser. This may be a strike, fire, explosion, ‘act of God’, civil insurrection, act of war or terrorism, or a pandemic. If such a delay occurs, your builder is permitted to extend all deadlines by up to the length of the unavoidable delay period without paying you delayed occupancy compensation. Your builder must inform you at the outset of the delay, provide an estimate of how long it will last and give you written notice as soon as the delay has ended.

Changing dates by mutual agreement

If your builder asks you to change a date related to the closing of your new home, you should review the provisions of the Addendum. There are special rules for changing dates by mutual agreement and an amendment may result in your waiving compensation that would otherwise be available to you.

Note: As a general rule at least 90 days written notice is required to change a closing date.
 

Delayed occupancy compensation & making a claim

Delayed Occupancy Compensation
Delayed occupancy compensation up to a maximum of $7,500 is payable:

  • If occupancy occurs on a date after the Firm Occupancy Date; or
  • If you exercised your right to terminate the purchase agreement due to delay as permitted by the Addendum (e.g., as per the Purchaser’s Termination Period). In this case you are also entitled to a full refund of all monies paid (i.e., deposits, extras and upgrades) plus interest.


Delayed occupancy compensation for living expenses (meals and accommodation) is payable based on a fixed amount of $150 a day for each day of delay until the Delayed Occupancy Date or the date that the purchase agreement is terminated. Receipts for living expenses are not required. 

Compensation is also payable for costs incurred by you as a result of the delay (for example, additional moving and storage costs). Receipts for these costs must be provided. 

In addition, if your builder fails to give you 10 days notice of an occupancy delay, you will be compensated in the amount of $1,500 ($150 x 10 days).

Making a Delayed Occupancy Claim
If you are entitled to delayed occupancy compensation, you may make a claim to your builder within 180 days of your occupancy date or the date on which you terminate your purchase agreement. If your builder does not pay your claim, or if you and your builder are unable to agree on the amount of compensation payable, you may make a claim to Tarion during the first year of possession (or up to 365 days after you terminate your purchase agreement). To do so, please complete the Delayed Closing/Occupanc​y Claim Form, available through MyHome​.

Occupancy certificate & receipts

Occupancy Certificate

At the time of closing, new home builders are required to provide either a municipal Occupancy Certificate; or a written statement from the builder confirming that all Building Code conditions of occupancy have been satisfied.

Receipts
If you make a claim to your builder, be sure to provide all receipts and other supporting documents for direct costs incurred as a result of the delay. Keep copies of your receipts and other documents as these will be needed if you make a claim to Tarion. Note: Receipts relating to living expenses are not required.

 

Tentative occupancy dates

When your builder is less able to determine a precise date that your condominium unit can be ready for occupancy. For example, if construction has not yet started, or if there are unpredictable obstacles which could slow completion.

What it is & how it works

Details about the delayed occupancy warranty are provided in the Tarion Addendum, which your builder is required to attach to your purchase agreement. 

The first page of the Addendum to your purchase agreement is a Statement of Critical Dates which must be signed by both you and your builder. It clearly indicates when your builder expects to finish the home and the latest possible dates for permitted extensions.

It provides the following key dates:

The First Tentative Occupancy Date 

The anticipated date that your condominium unit will be ready for you to move in, as agreed upon by you and your builder. Your builder can set one or more Tentative Occupancy Dates.


Final Tentative Occupancy Date

If the current Tentative Occupancy Date cannot be met, a Final Tentative Occupancy Date must be set within 30 days of roof completion. If the Final Tentative Occupancy Date cannot be met, with 90 days written notice, the builder can extend the Occupancy Date one more time for up to 120 days by setting a Firm Occupancy Date


Firm Occupancy Date

A date set by the builder with 90 days prior notice if an existing Tentative Occupancy Date cannot be met. This date may be set within 30 days of the roof assembly date, as an alternative to setting a Final Tentative Occupancy Date. The Firm Occupancy Date cannot occur after the outside Occupancy Date. Once a Firm Occupancy Date has been set, if your builder extends occupancy by setting a Delayed Occupancy Date, delayed occupancy compensation is payable to you

The Outside Occupancy Date

This is the latest date that your builder agreed to provide you with occupancy of your condominium unit. You and your builder agree upon this date at the time of signing the purchase agreement. 
Your builder may extend the Occupancy Date multiple times without paying compensation to you, however you must be given 90 days notice of each extension. Your builder must follow specific rules for setting a new occupancy date (More information is available on this topic below, under the heading: Rules for Setting a New Occupancy Date).

The above dates must fall on a business day as defined in the Addendum.

  • Notice of a Delay Beyond the First Tentative Occupancy Date –This date is 90 days before the First Tentative Occupancy Date and is the last day by which notice must be given if a delay beyond the First Tentative Occupancy Date is expected.


If a notice period begins on a non-business day, notice must then be given on the prior business day to ensure the homeowner receives a full 90 days notice of a delay.

  • The Purchaser’s Termination Period – If the home is not complete by the Outside Date for Occupancy, you have a 30-day period in which to terminate the agreement.


You may wish to use this Statement of Critical Dates calculator to help you determine the various dates related to your home’s occupancy.

Rules for setting a new occupancy date

As long as the Outside Occupancy Date is not exceeded, your builder can extend your Occupancy Date as described below without paying you delayed occupancy compensation. 

To set a subsequent Tentative Occupancy Date you builder must give you written notice at least 90 days before the First Tentative Occupancy Date and choose a subsequent Tentative Occupancy Date or set a Firm Occupancy Date*. 

If your builder extends the First Tentative Occupancy Date, but fails to give you a full 90 days written, then the First Tentative Occupancy Date becomes the Firm Occupancy Date. In addition, if your builder exercises the first extension properly, but fails to provide you with a full 90 days written notice of a subsequent extension, then the current Tentative Occupancy Date becomes the Firm Occupancy Date.

* The subsequent Tentative Occupancy Date can be any business day, provided it is prior to the Outside Occupancy Date.

Occupancy dates must not be “floating dates” dependent on some other event. They must be calendar dates or you may be entitled to terminate your purchase agreement.

Early termination conditions of sale & acceptable conditions

Early Termination Conditions of Sale

Under the Condominium Act you are entitled to a 10 business day ‘cooling off’ period to review your purchase agreement. You may choose to terminate the agreement during this period if you wish.

The Addendum contains a section which explains any Early Termination Conditions that apply to your deal. Such conditions may be included if some external approval or event is required before the transaction can be finalized, however only the types of conditions listed in the Addendum are permitted. Conditions which are not permitted are not enforceable. You should review these conditions the ‘cooling off’ period.

Any condition that is included must be accompanied by a date by which it will be satisfied. If the condition is not satisfied by that date, the purchase agreement may be terminated. Your builder is required to provide you with confirmation of if and when each Early Termination Condition is satisfied.

Acceptable Early Termination Conditions

Most allowable Early Termination Conditions are related to approvals to allow the condominium project to be built and occupied. Examples of such conditions include:

  • Minimum sales threshold for the project
  • Confirmation of project financing
  • Approval of site plan or other development agreement
  • Easements or similar rights serving the property or surrounding area
  • Completion of hard services such as roads, water and sewer lines, and other utilities

    Each condition must be set out separately, be specific as to the type of approval needed, and identify the approving authority.

     
Waivable conditions

Your builder is also entitled to make the purchase agreement conditional upon specific ‘waivable conditions’ for which no proof is needed from a specified approving authority. These include:

  • Receipt by the builder that unit sales have exceeded a threshold amount by a specified date
  • Receipt by the builder that satisfactory project financing has been arranged.
  • Confirmation that the condominium purchaser has adequate financial resources to complete the transaction.

     
Unavoidable delays & occupancy dates

An unavoidable delay is an extraordinary circumstance where an Occupancy Date may need to be delayed through no fault of the builder or purchaser. This may be a strike, fire, explosion, ‘act of God’ civil insurrection, act of war or terrorism, or a pandemic. If such a delay occurs, your builder is permitted to extend all deadlines and Occupancy Dates by up to the length of the unavoidable delay period without paying you delayed occupancy compensation. Your builder must inform you at the outset of the delay, provide an estimate of how long it will last and give you written notice as soon as the delay has ended.

Changing dates by mutual agreement

If your builder asks you to change a date related to the closing of your new home, you should review the provisions of the Addendum. There are special rules for changing dates by mutual agreement and an amendment may result in your waiving compensation that would otherwise be available to you.

Note: As a general rule at least 90 days written notice is required to change a closing date.
 

Delayed occupancy compensation & making a claim

Delayed Occupancy Compensation

Delayed occupancy compensation up to a maximum of $7,500 is payable:


  • If occupancy occurs on a date after the Firm Occupancy Date; or
  • If you exercised your right to terminate the purchase agreement due to delay as permitted by the Addendum


(e.g. as per the Purchaser’s Termination Period). In this case you are also entitled to a full refund of all monies paid (i.e., deposits, extras and upgrades) plus interest.

Delayed occupancy compensation for living expenses (meals and accommodation) is payable based on a fixed amount of $150 a day for each day of delay until the Delayed Occupancy Date or the date that the purchase agreement is terminated. Receipts for living expenses are not required. 

Compensation is also payable for costs incurred by you as a result of the delay (for example, additional moving and storage costs). Receipts for these costs must be provided. 

In addition, if your builder fails to give you 10 days notice of an occupancy delay, you will be compensated in the amount of $1,500 ($150 x 10 days).


Making a Delayed Occupancy Compensation Claim
If you are entitled to delayed occupancy compensation, you may make a claim to your builder within 180 days of your occupancy date or the date on which you terminate your purchase agreement. If your builder does not pay your claim, or if you and your builder are unable to agree on the amount of compensation payable, you may make a claim to Tarion during the first year of possession (or up to 365 days after you terminate your purchase agreement). To do so, please complete the Delayed Closing/Occupancy Claim Form. You may obtain this form by contacting Tarion at 1-877-9TARION.

Occupancy certificate & receipts

Occupancy Certificate

At the time of closing, new home builders are required to provide either a municipal Occupancy Certificate; or a written statement from the builder confirming that all Building Code conditions of occupancy have been satisfied.

Receipts
If you make a claim to your builder, be sure to provide all receipts and other supporting documents for direct costs incurred as a result of the delay. Keep copies of your receipts and other documents as these will be needed if you make a claim to Tarion. Note: Receipts relating to living expenses are not required.

Condominium Cancellations

Condominiums are an increasingly popular choice for new home buyers, but they are not without certain risks. Understanding what might happen when you buy a pre-construction condominium unit will help you make a more informed decision. Below are some factors to consider before you buy.

For purchasers who are facing the cancellation of their project, the following information will help in understanding their rights and in making informed decisions.

Purchase Agreements

Purchase agreements contain important information about your rights, the vendor’s rights, the unit, and the condominium project. To ensure that you are protected and understand what you are signing up for, you should have your agreement reviewed by a lawyer who is experienced in pre-construction condominium transactions. 

You have an initial 10-day period (from the date that the purchase agreement is first signed) to cancel your purchase under the Condominium Act, 1998 (Ontario). During that 10-day “cooling off” period you can terminate your agreement and get your deposit back if you decide that you no longer wish to go through with the purchase. 

The Ontario’s Residential Condominium Buyer’s Guide issued by the Condominium Authority of Ontario (CAO) provides other helpful insights for consideration prior to your purchase. For further information, visit the Condominium Authority of Ontario (CAO) website. 

What is the Addendum

The applicable version of the Addendum, developed by Tarion and the Home Construction Regulatory Authority, must be attached to every purchase agreement. The Addendum provides:

  • Advice and cautions about rights and obligation under the New Home Warranties and Protection Plan
  • A Statement of Critical dates that sets out when the home is expected to be ready for occupancy, as well as an Outside Occupancy Date beyond which you (as the purchaser) have a right to terminate the transaction;
  • Limits on the vendor’s use of Early Termination Conditions in the purchase agreement;
  • Information about the status of development approvals and the status of construction so you can better assess the risk that a delay may occur;
  • Restrictions and processes for any occupancy delays that may occur;
  • An outline of compensation available to the purchaser for excessive delays; and
  • Summary sheets for closing costs and adjustments.

It is important to note that the Addendum supersedes any other conflicting conditions that may be found within the purchase agreement.

The condominium information sheet

All condominium purchase agreements are required to include Condominium Information Sheet as the first page of the Agreement of Purchase and Sale for buyers of new or preconstruction condominiums. This sheet highlights key potential risks of buying pre-construction condominiums, which empowers Ontario homebuyers to make more informed decisions.

An important risk to pay attention to is whether your purchase agreement contains Early Termination Conditions, which, if not met, allow the vendor to cancel the condominium project along with your purchase agreement. Examples of Early Termination Conditions include: reaching a minimum unit sales threshold; the vendor securing necessary financing for construction and completion of the condominium project; and the vendor obtaining the required approvals from the municipality. With the purchase of any pre-construction condominium unit, it is important to remember that there is a possibility that the project may never be completed.

The Warranty Information Sheet

For purchase agreements signed on or after February 1, 2021, the purchase agreement must include a Warranty Information Sheet that provides an overview of the warranty coverage that comes with your new unit, and information about the Pre-Delivery Inspection. There are different versions of the Warranty Information Sheet depending upon the type of home or condominium unit that you purchase.

Construction Delays

Since a new condominium project typically requires more time to complete than a freehold home, the potential for construction delays is higher. You can review the Addendum attached to your purchase agreement to understand how occupancy dates may be extended, when you can terminate your agreement because of delay, and when you might be eligible under the warranty for compensation due to delay. Click here for information about Delayed Occupancy Warranty for Condominiums.

Reasons for Cancellations

There’s always a risk that a condominium project could get “cancelled”. A condominium project is “cancelled” when the vendor decides that the project will not proceed, or the project otherwise does not proceed. If this occurs, then typically the vendor will notify the purchasers that it intends to terminate the purchase agreements.

Some of the most common reasons for project cancellations include the vendor: not reaching a minimum unit sales threshold; being unable to secure satisfactory financing for construction and completion of the condominium project; and being unable to obtain the required approvals from the municipality. Review the Addendum and Condominium Information Sheet (if applicable) attached to your purchase agreement to understand the Early Termination Conditions that, if not satisfied, may result in the condominium project being cancelled. Separate and apart from Early Termination Conditions, a project may be cancelled for other reasons including a vendor’s bankruptcy or insolvency. If a project gets cancelled, you may be eligible for deposit protection from Tarion.

It is important to note that Tarion does not have authority to compel a vendor to complete a condominium project that they decide to cancel. However, if you have a complaint about the circumstances under which the project was cancelled, you may report these to the Home Construction Regulatory Authority (HCRA) by clicking here. If your purchase agreement is terminated, you are encouraged to consult with your lawyer about any other remedies that may be available to you.

Support from third Party Organizations

Below is a brief overview of organizations at arm’s length from Tarion that feature helpful information for purchasers buying a condominium in Ontario:

Condominium Authority of Ontario (CAO)

The Condominium Authority of Ontario is an organization aiming to improve condominium living by providing services and resources for condo owners, residents, and directors, including understanding their rights, director training, resources for residents and owners to resolve common issues, and an online dispute resolution service. In November 2020, the CAO launched Ontario’s Residential Condominium Buyer’s Guide, which provides condo purchasers in Ontario with information and resources to make a more informed decision when purchasing a residential condo unit (“unit”). The CAO also maintains the CAO Public Registry, which displays information displays information prescribed in the regulation that is provided by condominium corporations to the CAO through the filing of condo returns and notices of change.


Home Construction Regulatory Authority (HCRA)

The Home Construction Regulatory Authority (HCRA) is a not-for-profit corporation that is designated by the provincial government to administer and enforce the New Home Construction Licensing Act, 2017 and associated regulations. Its functions include licensing and regulating new home builders and vendors in Ontario. The HCRA also manages the Ontario Builder Directory (OBD), which provides helpful information to make an informed decision in selecting a vendor/builder prior to making a home purchase.

The OBD provides access to vendor and builder license status, address; names and phone numbers of principals, directors and officers; number and type of homes closed; regulatory actions taken against the vendor/builder; claims paid; outstanding claims; breaches of the Tarion warranty process; chargeable conciliations; past cancelled condominium projects; HCRA license conditions; and information regarding related entities also engaged in the residential construction industry in Ontario.

Questions / Contact Tarion

Questions can be directed to Tarion’s customer service team toll-free at 1-877-9-TARION (1-877-982-7466), or by email to customerservice@tarion.com.

Already have possession of your new home?

Visit our section on coverage after you have moved in, also known as post-possession.

Coverage after you move in