What Happens if My Pre-Construction Condo is Delayed?

One of Ontario’s fastest-growing communities, Vaughan is home to a large number of exciting modern condo developments. For both house hunters and investors alike, these developments provide a unique and opportune path to ownership. 

However, while pre-construction condos do come with a whole host of benefits, there are certain challenges that can impact buyers too. One of the most common of these obstacles is delays. 

If you’re thinking about buying a new-construction condo unit or have recently purchased one and are unsure about what your options are in the event of a delay, here’s what you need to know. 

Understanding Occupancy Dates

When you first sign a purchase agreement on a pre-construction condo you will receive a tentative occupancy date. Depending on the project timeline and when you buy, this could be several months in the future or even a few years. Rather than an exact move-in date, the initial tenancy day is more of a rough guide for when you can expect your unit to be ready. Your purchase agreement will also include an outside occupancy date. This is the absolute latest date that the developer can deliver the condo to you. 

As a buyer, it’s important to be mindful of these primary dates when you sign the purchase agreement. Should your condo unit be delayed, these dates will impact your rights, options, and opportunities for compensation. 

Searching for more blog posts about getting into the housing market? You may find these links helpful. 

• What are the Costs of Buying a Home in the GTA?
• Essential Tips for First-Time Home Buyers
• 5 Mistakes First-Time Home Buyers Make

Can the Builder Legally Delay Your Occupancy? 

Yes, they can. However, only to a certain extent. Based on provincial laws, your builder can push back the tentative occupancy date for any reason that they choose. The only caveat is that they must give you a minimum of 90s days notice and provide a new tentative occupancy date at the same time.

However, a developer can’t delay your occupancy forever. Once the roof on the building has been completed, they will be required to set a final tenancy date within 30 days. This final date can be delayed once more, up to 120 days. This deadline is known as firm occupancy. As the buyer, if you do not receive access by the firm occupancy date, you will be formally entitled to compensation. 

If your builder begins to delay your occupancy, it’s important to stay up to date on any updates you may receive to avoid confusion or headaches. 

Why do Delays Happen?

Like any construction project, a condo building can be delayed for any number of reasons. Some of these delays could be within the developer’s control or somewhat out of their hands. Here are some of the most common reasons why pre-construction projects in the Greater Toronto Area get set back. 

• Labour shortages
• Supply shortages
• Adverse or severe weather conditions
• Municipal restrictions
• Internal setbacks 

Thinking about buying a pre-construction condo in Vaughan or the GTA? You will need to create an effective budget ahead of your purchase. Click here for our tips on how to do just that. 

Am I Entitled to Compensation?

Should your tenancy be delayed beyond the firm occupancy date, you will be entitled to certain financial compensations. These compensations are generally intended to help cover your living expenses while you wait, and are based on the total length of the delays you’re experiencing.

In Vaughan, compensation is regulated by provincial law. For every day that passes after the determined occupancy date, you will receive $150, up to a maximum of $7500. You could also be eligible for further compensation if the builder doesn’t provide proper notice of delays. 

Should your unit get delayed significantly, you’ll have unique rights and options based on the circumstances. In the instance of major delays beyond the firm and outside occupancy dates, buyers are entitled to cancel their purchase and receive a full refund. This refund includes all costs paid by the buyer up to that point, including the deposit, incurred interest, fees, or upgrades to the unit itself. 

Thinking about purchasing a pre-construction condo to use as an income property? Check out these blog posts for helpful tips and insights.

• An Investor’s Guide to Pre-Construction Condos
• How to Create Wealth by Investing in Canadian Real Estate 
• What Should Buyers Know About Mortgage Pre-Approvals?

How to Protect Yourself

While the chance of delays shouldn’t prevent you from getting into the market, it can be helpful to understand your options in advance should you ever be impacted by them. If you’re interested in buying a pre-construction condo, the best way to set yourself up for success is to partner with a local real estate agent. Whether you’re investing or looking for a place to call home, your agent can help you discover and purchase the perfect condo for you. 

An agent will help you stay informed about potential delays and ensure you don’t miss out on any compensation you may be entitled to. They can also help you create a backup plan should you be in need of temporary housing in the event of delays.

Thinking about buying a pre-construction condo or home? Work with the #1 real estate team in Vaughan! Call 416-571-2724 or send an email to info@arciteam.com today.