Buying New Construction in Rosedale: What to Check in the Purchase Agreement

This is for buyers considering a boutique condominium suite or a builder-sold freehold home in Rosedale. It is a guide to reading the purchase agreement, not legal, tax or financial advice. Your own real estate lawyer should review the agreement before you sign, and your accountant should confirm your HST position.

The short answer: before a client commits, I check six things: where the deposits sit and how much Tarion actually covers, how the price treats HST and the new housing rebates, how occupancy and final closing work, which dates the Tarion Addendum fixes, whether the 10-day rescission period is still open, and whether the builder is licensed. I compare each deposit with the applicable coverage limit.

Rosedale is an established, low-rise neighbourhood with high price points. New construction here is mostly boutique buildings and infill homes. The statutory framework is the same as anywhere else in Ontario. What changes is the size of the exposure.

Where do my deposits sit, and how much is protected?

For a condominium, section 81 of the Condominium Act, 1998 requires the builder (the Act calls it the declarant) to ensure that a trustee of a prescribed class or the builder's solicitor holds in trust all money paid toward the unit, including reservation money. Reservation money must be credited to the price when you sign.

Tarion is the backstop, not the first line of protection. If a condo builder terminates and the deposit is not returned within 10 days, Tarion deposit protection is up to $20,000. For freehold homes under agreements signed on or after January 1, 2018, coverage is up to $60,000 where the price is $600,000 or less, and 10% of the price to a maximum of $100,000 above that.

Freehold buyers now have an added step. For freehold agreements signed on or after April 1, 2026, notify Tarion within 45 days of signing. Tarion's transition notice defers changes to deposit coverage until January 1, 2027. Under the changed coverage framework, late or missing notice makes coverage subject to a sub-limit under a $15 million annual fund, as explained in Tarion's Q&A. I put the notice deadline on the checklist at signing.

On the condominium, I ask the buyer's lawyer to confirm who holds each instalment before the next one is paid. On the freehold, I look closely at the builder's position or negotiate the deposit down. I set out the full framework in Pre-Construction Deposit Protection in Ontario Explained.

How does the agreement treat HST and the new housing rebates?

Agreements commonly quote a price "inclusive of HST" and have the buyer assign any new housing rebates to the builder, who credits them in the price. That structure assumes you qualify. At Rosedale price points, the rebates are modest or nil.

Under the Ontario enhanced new housing rebate, combined relief on the 8% provincial part of HST can reach $80,000 for agreements entered into with a builder between April 1, 2026 and March 31, 2027. Relief is full up to $1,000,000, a flat $80,000 above $1,000,000 to $1,500,000, and partial above $1,500,000 and below $1,850,000. At $1,850,000 and above, only the standard Ontario new housing rebate of up to $24,000 remains. The federal first-time home buyers' rebate is reduced between $1,000,000 and $1,500,000 and is nil at $1,500,000 and above. It also requires that the home be your first home and primary place of residence.

The clause I read most carefully is the one that applies if you do not qualify, for example because the home will not be your primary residence. Agreements commonly require the buyer to pay the builder the amount of the rebate on closing in that case. Check whether yours does, how the amount is calculated, and how it will appear in the statement of adjustments. The CRA also notes that a rebate cannot exceed the tax paid or payable, including any amount paid or credited by the builder.

I cover the rebate mechanics in HST New Home Rebate in Ontario: How It Works in 2026.

How do interim occupancy and final closing work?

A condominium purchase usually has two stages. Under section 80 of the Condominium Act, the agreement may permit or require interim occupancy, meaning you move in before you receive a deed in registerable form. Title passes only after the declaration and description are registered, and the builder must notify you in writing within 30 days of registration unless you receive your deed in that time.

During interim occupancy you pay a monthly occupancy fee. The Act caps it at the total of three components: interest on the unpaid balance at the prescribed rate, a reasonable monthly estimate of municipal taxes for the unit, and the projected monthly common expense contribution. The tax portion is trued up when the deed is delivered.

The prescribed interest rate under section 19(1) of Ontario Regulation 48/01 is the Bank of Canada's most recently reported chartered bank rate for a conventional one-year mortgage as of the first of the month in which the purchaser assumes interim occupancy or is required to do so under the agreement. For occupancy beginning or required in October 2026, that rate is 5.49%.

Section 80(3) gives you one option that is easy to miss: before the 10-day rescission period expires, you may elect to pay the balance in full on assuming interim occupancy. If you intend to pay cash, raise this with your lawyer at signing, not at occupancy. My worked examples are in Interim Occupancy Fees in Ontario: How They're Calculated.

A builder-sold freehold home has a single closing. You take possession and title on the same day, on a closing date governed by the freehold Addendum.

What does the Tarion Addendum fix?

The Addendum, developed by Tarion and the Home Construction Regulatory Authority, must be attached to every purchase agreement. Tarion states that it supersedes any conflicting conditions elsewhere in the agreement. I read it before the builder's schedules.

• Statement of Critical Dates: the first page, signed by both parties. For a condominium it sets the First Tentative Occupancy Date and the Outside Occupancy Date. The builder must give notice of a delay beyond the first tentative date no later than 90 days before it, and the Firm Occupancy Date cannot be later than the Outside Occupancy Date.
• Freehold dates: under the freehold Addendum, the Second Tentative Closing Date can be at most 120 days after the First Tentative Closing Date, and the Firm Closing Date at most 240 days after it. If notice of delay is not given at least 90 days before the first tentative date, that date becomes the Firm Closing Date.
• Termination right: for a condominium, if the unit is not ready by the Outside Occupancy Date, you have a 30-day period to terminate.
• Delay compensation: up to $7,500 in total, with living expenses at a fixed $150 a day without receipts. If the builder fails to give 10 days' notice of a delay, the amount is $1,500 ($150 x 10).
• Early termination conditions: the builder may rely only on the conditions listed in the Addendum. Tarion cites the common reasons for project cancellations as not reaching a minimum sales threshold, being unable to secure construction financing, and being unable to obtain municipal approvals.
• Mutual date changes: an amendment you agree to may waive your delay compensation. Read any date amendment with your lawyer before signing it.
• Closing costs and adjustments: the Addendum includes summary sheets. Compare them with the builder's schedules, particularly for any HST rebate repayment.

Can I still walk away in the first 10 days?

For a condominium, yes. Under section 73 of the Condominium Act, you may rescind the agreement before accepting a deed in registerable form. Written notice must be received by the builder or the builder's solicitor within 10 days of the latest of three events: receiving the disclosure statement, receiving the applicable condominium guide, and receiving a copy of the agreement signed by both parties. The builder must then promptly refund all money credited to the price, without penalty, with interest at the prescribed rate.

The word that matters is received. Send notice in a way you can prove, and do not wait until the last day. This statutory cooling-off right comes from the Condominium Act. For a freehold agreement, ask your lawyer what the agreement itself provides.

Is the builder licensed?

The Home Construction Regulatory Authority licenses and regulates new home builders and sellers in Ontario. Before signing, search the builder and the selling entity in the Ontario Builder Directory, the HCRA's public lookup of licensed builders and sellers. The name on the agreement should match the licensed entity.

What this means for you

I review the deposit amount alongside the applicable coverage limits. The checklist I work through with clients is below.

• 1. Deposits: for a condominium, confirm who holds each instalment in trust, compare the deposit with the Tarion cap ($20,000 for a condominium, up to $100,000 for a freehold), and register a freehold purchase with Tarion within 45 days of signing.
• 2. HST: confirm whether the price is inclusive of HST with rebates assigned to the builder, what you owe the builder on closing if you do not qualify, and have your accountant confirm eligibility.
• 3. Occupancy and closing: for a condominium, estimate the interim occupancy fee and decide before the rescission period ends whether to elect to pay in full. For a freehold, confirm the single closing date.
• 4. Tarion Addendum: note the Statement of Critical Dates, the outside date, the 30-day termination window for a condominium, the listed early termination conditions and the closing cost summary.
• 5. Date amendments: do not sign an amendment to the critical dates without understanding whether it waives compensation.
• 6. Rescission: for a condominium, diarize the 10-day period from the latest of the three triggering documents.
• 7. Licensing: check the builder and seller in the HCRA Ontario Builder Directory.
• 8. Review: have your own real estate lawyer review the agreement and Addendum before the rescission period expires.

Frequently asked questions

Does Tarion cover my whole deposit on a Rosedale condominium?

No. Tarion deposit protection for a condominium is up to $20,000. Section 81 requires trust arrangements, subject to its provision for release against prescribed security. I ask the buyer's lawyer to confirm the protection for every instalment.

If I pay in full at interim occupancy, do I receive title right away?

No. Interim occupancy is, by definition, occupancy before you receive a deed in registerable form. Paying in full changes the unpaid balance on which the interest component is calculated, but title still passes only after registration.

Does the 45-day Tarion registration apply to condominium purchases?

The requirement applies to freehold agreements signed on or after April 1, 2026. Condominium deposits are protected through the section 81 trust requirement and Tarion's $20,000 coverage.

Sources

• Condominium Act, 1998, ss. 73, 80 and 81 (Government of Ontario, e-Laws)
• O. Reg. 48/01, s. 19, under the Condominium Act, 1998 (Government of Ontario, e-Laws)
• Coverage and claims before you move in (Tarion)
• Deposit Protection Q&A (Tarion)
• Condo Units: coverage for occupancy dates, delays and cancellations (Tarion)
• Freehold homes: coverage for closing dates and delays (Tarion)
• What is the Ontario enhanced new housing rebate (Canada Revenue Agency)
• What is the first-time home buyers' GST/HST rebate (Canada Revenue Agency)
• Ontario Builder Directory (Home Construction Regulatory Authority)