Pre-Construction Condominiums and Cancellations

When purchasing a pre-construction condominium, there is always a risk that the project could be delayed or cancelled.

Condominium projects can sometimes be cancelled due to unforeseen circumstances even after you’ve made a deposit on your unit. This is because there are many stages in building a condominium that may remain after you’ve made a deposit. 
Purchase agreements commonly contain a list of the potential conditions that may result in the development not proceeding and therefore the termination of the purchase agreement. This may include: 
  • a failure to sell enough units 
  • an inability to secure financing for the project or 
  • delays in obtaining the required building or planning approvals.  
It’s important for you to be aware of and agree on the potential conditions when you sign the purchase agreement. These conditions are to be identified in an addendum to the agreement. 
Tarion strengthens protections for buyers of cancelled condominiums through the following:
  • updating the Ontario Builder Directory to include information about developers with a history of condominium project cancellations.
  • developing options to require developers to post information about their condominium development projects on their websites (e.g. information about outstanding approvals or other matters that could cause a project to get cancelled)
  • working with the Condominium Authority of Ontario to educate prospective buyers about the condominium purchase process
  • improving information collection on new home construction projects
  • making changes to its addenda to agreements of purchase and sale for condominium buyers within the next 12 months to enhance disclosures for consumers about the risks of buying a pre-construction condominium. This would include matters that could cause a project to get cancelled, such as outstanding approvals and project financing. The addendum is attached to the agreement of purchase and sale of a condominium.