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Buying a pre-construction home: Why legal advice and researching your builder are key

Being an informed buyer means taking steps early on to fully understand the details of your purchase.

When shopping for a new home, why consider one that only exists on paper?   

Recent research shows that Ontario’s home shoppers prefer pre-construction because they want a home with brand new materials and appliances, greater energy efficiency, and the chance to choose from different styles and upgrades.  

But a new home’s journey from floor plan to finished product can be complex, and buying pre-construction does involve some risks.  That’s why, in Ontario, most new homes come with a warranty that’s provided by the builder and supported by Tarion, a consumer protection organization established by the provincial government.   

A home is one of life’s biggest purchases, and navigating the process can be easier when you know your rights and responsibilities. Being aware of the warranty is a good start, but being an informed buyer means taking steps early on to fully understand the details of your purchase.  

To protect yourself in the home buying journey, start with these key steps:  

1. Make sure you’re buying from a licensed builder  

Buying a pre-construction home can be intimidating, so it’s critical to choose a builder you can trust. After all, it’s not just their job to deliver the well-built home you were promised – they’re also responsible for meeting their warranty commitments in case of delays, cancellations, or construction defects. 

When doing your research, it’s a great idea to look at many different options, read online reviews, visit showrooms or model suites for samples of the builder’s workmanship. You can also consider asking a builder for references from other customers to get their perspectives.  When you find a development or builder that you like, it’s essential to confirm that the builder is licensed to build and sell in Ontario by checking the Ontario Builder Directory. 

The online directory lists important information about the builder’s history, including how many homes or condos they’ve built, any projects currently underway, past cancelled projects and whether they have any illegal building convictions. If you don’t see your builder’s name listed, this means they are not licensed to build and sell in Ontario so you should consider finding a different builder.   

2. Know exactly what you’re buying, with help from a lawyer  

When you finalize your new home purchase, you’ll sign a legal and binding contract called an Agreement of Purchase and Sale, which outlines in detail everything that’s included in the price of your home. This includes terms and conditions of the sale and any upgrades or customizations, and it serves as the written record for what the builder’s warranty will cover.  

Before you sign, it’s a good idea to review the purchase agreement with a real estate or condo lawyer so that you clearly understand the details and potential risks of your purchase.  


Your purchase agreement can vary from builder to builder, but your lawyer will know what to look for so that you can make an informed purchase. Although this step requires extra time and money, it’s a worthwhile investment in your peace of mind.   

Your lawyer will help you review other important documents included with the agreement, like: 

  • the Addendum, which outlines the home’s expected completion date and specific extended dates in case of a delay, along with conditions that entitle you or the builder to terminate the purchase agreement;  

  • a Warranty Information Sheet, which provides an overview of the builder’s warranty coverage; and  

  • a Condominium Information Sheet for condo buyers that outlines the risks of construction cancellations, expected occupancy date and other important details.  

3. Know how the builder’s warranty protects you as a homeowner - and its limits  

Leading up to your move-in date, your coverage includes deposit protection up to certain limits in the rare case that a builder goes into bankruptcy or fundamentally breaches your purchase agreement, as well as coverage against cancellations and delays. Once your home is delivered, the builder’s warranty also provides coverage against a number of potential construction issues for up to seven years. 

It’s also important to know the warranty’s limits.  Because its coverage decreases over time, the first year of the warranty is the most important time to identify and manage any issues in your home. And, although Tarion can provide some financial support in the rare event that your builder does not live up to their warranty commitments, certain limits apply.  

So, as you get ready to sign your purchase agreement, get familiar with the coverage you’re entitled to and how to make a claim should you ever need to. More details, tips and helpful resources are available at