Preconstruction is a different transaction from resale. You are buying a contract, not a home — the home does not exist yet. The agreement is written by the builder’s lawyers, the timeline is measured in years, and you pay for the unit in stages before you ever own it. Here is the mechanical reality, Ontario-specific.
Deposits come in stages
Resale purchases usually involve one deposit. Preconstruction deposits arrive as a schedule of instalments spread across months or years — a structure set by each builder in each project, commonly tied to signing, fixed calendar dates, and construction or occupancy milestones. Total deposits on preconstruction typically run higher than a resale deposit, and the schedule is negotiable less often than buyers hope. Read the schedule before signing, and map every instalment against your actual cash flow, because missing one is a default under the agreement.
Ontario law requires condo deposits to be held in trust, and Tarion — the province’s new-home warranty administrator — provides deposit protection up to prescribed limits. Your lawyer verifies both for your specific agreement.
The 10-day cooling-off period
Ontario gives buyers of new condominiums a 10-day cooling-off period under the Condominium Act. From the later of receiving the signed agreement or the current disclosure statement, you have 10 days to rescind in writing, for any reason, with your deposit returned. This is the single most valuable consumer protection in the transaction, and it has one correct use: legal review. Get the agreement and disclosure statement to a lawyer immediately — not on day eight. The review covers the deposit schedule, the builder’s unilateral rights, adjustments charged on closing, and what happens if the project is delayed or cancelled. Note that this cooling-off period applies to new condos; freehold new builds do not get the same statutory window.
Interim occupancy: living there before you own it
A condo building finishes floor by floor, but ownership cannot transfer until the condominium corporation is legally registered. The gap between the two is interim occupancy: you get keys and move in, but the builder still owns the unit. During this period you pay the builder a monthly occupancy fee, generally composed of interest on the unpaid purchase balance, an estimate of property taxes, and a projected common-expense contribution.
Two things about that fee. It is not rent you can offset, and it is not mortgage principal — it builds no equity. And its duration is not fully predictable, because registration timing depends on the municipality and the builder. Interim occupancy can run months. Budget for it as a real carrying cost with an uncertain end date.
Final closing
Final closing happens after registration. This is when title transfers, your mortgage actually funds, and land transfer tax is paid. It is also when the builder’s statement of adjustments arrives — development charges, utility connections, Tarion enrolment, and other amounts the agreement allows the builder to pass through. Some of these can be capped by negotiation during the cooling-off period, which is one more reason the legal review matters at the start, not the end. The GST/HST new housing rebate is usually assigned to the builder and reflected in the price, provided you qualify; if you do not, the agreement typically lets the builder charge it back to you.
Tarion warranty coverage
New homes in Ontario carry a statutory warranty administered by Tarion and backed by the builder. Coverage runs in tiers — one-year, two-year, and seven-year — covering defects in work and materials, water penetration, building-system failures, and major structural defects, each with defined claim windows. Preconstruction condo buyers also get delayed-occupancy protection, with compensation rules when a builder misses properly noticed dates. Keep every notice the builder sends; the warranty runs on deadlines.
The honest risk summary
Preconstruction trades certainty for time. Prices are set today for delivery years out — which can work for you or against you, and nobody can honestly tell you which in advance. Delays are common. Fees and adjustments arrive at closing. Financing approved today is not guaranteed at final closing years later. None of this makes preconstruction a mistake; it makes it a contract purchase that rewards buyers who read, budget, and lawyer up inside the 10 days.
If selling your current home funds the deposit schedule, know your number first at /home-value/. Estimates are ranges. A licensed District agent delivers the real number within 24 hours.