OTTAWA NEW CONSTRUCTION
Builder Purchase Agreements in Ontario: What to Review Before You Sign
Last updated: October 2026
A builder purchase agreement in Ontario is the builder’s own agreement of purchase and sale, drafted by the builder’s lawyers, plus a mandatory Tarion Addendum that sets out your closing dates, delay compensation and termination rights. Before signing, review the Statement of Critical Dates, the deposit schedule, the schedule of closing adjustments, the specifications, the builder’s right to make substitutions, and the warning clauses, ideally with a real estate lawyer before the agreement becomes binding.
This guide from west-end REALTOR® Jason Polonski walks through each part of a typical Ottawa builder agreement and explains what to look for. It is general information, not legal advice. Your real estate lawyer is the right person to interpret your specific agreement, and rules change, so confirm current requirements with Tarion and the Home Construction Regulatory Authority.
Why Builder Agreements Are Different from Resale Offers
In a resale purchase, both sides usually start from the standard Ontario real estate forms, and terms are negotiated back and forth. A builder agreement is different:
- It is written by the builder, often dozens of pages long, and designed to protect the builder’s flexibility.
- Many clauses are non-negotiable in practice, especially in busy releases.
- The home does not exist yet, so you are agreeing to plans, specifications and a timeline.
- Closing may be a year or more away, so your finances, the market and your life can change before you close.
That is why the review needs to happen before you sign. Once the agreement is firm, your options are limited.
The Tarion Addendum and the Statement of Critical Dates
Every new freehold home agreement in Ontario must include the Tarion Addendum. Its first page, the Statement of Critical Dates, is the most important page in the package. According to Tarion, it sets out either a firm closing date or a series of tentative dates, along with the latest dates the builder can extend to.
For agreements with tentative closing dates:
- First Tentative Closing Date: the builder’s anticipated completion date.
- Second Tentative Closing Date: up to 120 days after the first.
- Firm Closing Date: up to 240 days after the first tentative date.
- Outside Closing Date: 365 days after the earlier of the second tentative and firm closing dates.
The builder must give at least 90 days’ written notice to move past a tentative date, or that date becomes the firm closing date. If the firm closing date is missed, delayed closing compensation applies. If the home is not finished by the outside closing date, you have a 30-day window to terminate. Jason’s guide to new home closing delays explains the compensation in detail.
What to check: Write the dates in your calendar. If you are selling a home, plan your sale around the outside dates, not the builder’s hopes.
Early termination conditions
The Addendum also lists any early termination conditions, such as the builder needing certain approvals or a project reaching a viability threshold. Read these carefully. They describe the circumstances in which the builder can end the agreement and what happens to your deposit.
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Deposits
The agreement sets out how much you pay and when. Check that the schedule matches what you were told, that total deposits stay within Tarion’s protection limits for your price, and that you register your purchase with Tarion within 45 days of signing. Jason’s guide to new build deposits in Ontario covers this in depth.
Price, HST and Rebates
Most Ontario new homes are sold with HST included in the price, and the buyer assigns any HST rebates to the builder. The agreement will set out how this works and what happens if you turn out not to qualify for a rebate the builder has credited.
This matters more than ever in 2026. For agreements signed between April 1, 2026 and March 31, 2027, qualifying new homes bought as a primary residence may be eligible for up to $130,000 in relief through Ontario’s enhanced rebate and the Ontario New Home Affordability Payment. The rules include use requirements (a primary residence for you or a close relative, or a long-term rental) and construction deadlines: for a primary residence, construction must start by December 31, 2028 and be substantially complete by December 31, 2031. If you do not qualify, the agreement will usually make you responsible for repaying the builder at closing. Ask your lawyer to confirm your eligibility before signing. Jason’s GST/HST new home rebate guide explains the programs.
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Schedule of Closing Adjustments
Builder agreements list costs that will be added to your price at closing. These can include items such as Tarion enrolment fees, utility meter and connection charges, development or education levy increases, tree planting, grading or landscaping deposits, and administration fees.
What to check: Which adjustments apply, whether any are capped, and whether the builder can pass on new or increased government charges after you sign. Ask for an estimate of the total. Jason’s new build closing costs guide lists the common ones.
Plans, Specifications and Substitutions
The agreement attaches or refers to the floor plan, elevation and a specification schedule listing standard features. It will also usually give the builder the right to:
- Substitute materials of equal or better quality if specified items are unavailable
- Make minor changes to floor plans, room sizes or elevations
- Change the grading, which can affect steps to your front door or whether your basement has a lookout window
What to check: That the model, elevation and lot are correctly identified; that the specification schedule matches what you were shown; and how much variation the builder is allowed. If a feature matters to you, get it written into the agreement or the upgrade schedule. Showroom displays and model homes often include upgrades.
Upgrades and Extras
Upgrades are typically documented in a separate schedule or amendment after design centre appointments. Check deadlines for making selections, how and when you pay for them, and whether those payments are refundable. Jason’s guide to new build upgrades worth paying for can help you prioritize.
Warning Clauses
Builder agreements in Ottawa commonly include warning clauses required by the city or the developer. These may cover:
- Noise from roads, rail or nearby commercial uses
- Schools: that students may be bused to schools outside the community or accommodated in portables, and that school sites are not guaranteed
- Grading and drainage: rear-yard swales, catch basins and restrictions on altering grading
- Easements for utilities on your lot
- Future development on nearby land
- Mailbox, hydrant and utility box locations
These clauses are easy to skim and hard to change later. Read them, and ask your lawyer or Jason to explain any that are unclear.
Assignment and Resale Restrictions
Most builder agreements restrict your right to assign the agreement or list the home before closing, and many charge a fee if consent is given. If there is any chance you may need to sell before closing, understand these restrictions now. Jason’s guide to assignment sales in Ottawa explains the tax and contract issues.
Conditions and Your Right to Review
In a busy launch, builders often want firm agreements on the spot. You can ask for a short period to have your lawyer review the agreement, or for a lawyer review condition. Some builders agree, especially outside launch weekends.
New protection coming in 2027: According to Tarion, a 10-day cooling-off period for buyers of new freehold homes takes effect on January 1, 2027, alongside new information sheets and addenda. Until then, freehold buyers do not have a statutory cooling-off period. Condominium buyers already have a 10-day cooling-off period under the Condominium Act, as explained in the Condo Authority of Ontario’s buyer’s guide.
Builder Licensing and the Warranty Information Sheet
All new-home builders and vendors in Ontario must be licensed by the Home Construction Regulatory Authority. Check the builder on the Ontario Builder Directory before you sign. Builders are also required to give you Tarion’s current warranty information sheet; read it, because it summarizes your warranty and deposit rights. The freehold warranty information sheet is available from Tarion, and Jason’s Tarion warranty guide explains the coverage.
A Pre-Signing Checklist
- Builder licence confirmed on the Ontario Builder Directory
- Lot, model and elevation correctly described
- Statement of Critical Dates reviewed and planned around
- Deposit schedule within Tarion limits; Tarion registration planned within 45 days
- HST and rebate clauses understood, including eligibility for 2026 relief
- Schedule of closing adjustments reviewed, with an estimated total
- Specifications and substitution rights understood
- Warning clauses read and questions answered
- Assignment and resale restrictions understood
- Lawyer review completed or a review condition included
How Jason Polonski Helps with Builder Agreements
Jason is not a lawyer, and he works alongside your real estate lawyer, who provides the legal advice. What he brings is practical experience of how Ottawa builder agreements work in real transactions: which clauses tend to cause problems at closing, which dates matter for selling your current home, and which specification details are worth pinning down. His background in the construction and electrical trades helps him read plans and specifications critically, and his finance training helps clients understand adjustments and cash flow.
Jason holds a Bachelor of Commerce from Concordia University with a double major in Marketing and Finance and has more than 15 years of Ottawa real estate experience. He has helped hundreds of buyers and sellers across the west end. Learn more about his new-build services on the New Construction Realtor in Ottawa page.
Have Jason Review Your Builder Agreement with You
Call or text (613) 601-9333 or email polonskiottawa@gmail.com before you sign. Read client reviews on his reviews page.
Frequently Asked Questions About Builder Purchase Agreements
A mandatory part of every Ontario new freehold home agreement that sets out the Statement of Critical Dates, delay compensation, early termination conditions and termination rights.
Some terms, such as upgrades, closing flexibility or a lawyer review condition, are sometimes negotiable. Many standard clauses are not. Ask before you sign, not after.
Not currently. A 10-day cooling-off period for new freehold homes is scheduled to take effect on January 1, 2027. Condominium buyers already have a 10-day cooling-off period.
Costs added to the price at closing, such as Tarion enrolment, utility connection charges and certain levies. The agreement lists which ones apply.
Most agreements require you to repay the credited amount at closing. Confirm your eligibility with your lawyer before signing.
Yes. A real estate lawyer should review the agreement, ideally before it becomes binding.
