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
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.
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 and 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.
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.
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.
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.