Risks & Things to Know
Pre-construction has real upside, but you should go in with eyes open. Here are the risks — and how a good agent and lawyer help you manage each one.
On this page
The main things to watch
- Delays. Occupancy and closing dates can move. Tarion's delayed-closing rules may entitle you to compensation.
- Interim occupancy fees (condos) — "phantom rent" you pay before final closing. See Occupancy vs Closing.
- Closing costs — development charges, levies, Tarion enrolment, utility connections and legal fees. Ask for a cap on development charges in your contract.
- Interest-rate changes. You may close years later at a different rate, which affects your payment and mortgage qualification.
- Mortgage re-qualification. Lenders confirm your financing close to closing, not years ahead.
- Assignment restrictions / fees if you need to sell before closing.
- Finishes may differ slightly from renderings.
How to protect yourself
- Have a lawyer review the agreement during the 10-day cooling-off period (condos).
- Negotiate capped development charges and assignment rights.
- Budget for occupancy fees and closing costs, not just the deposit.
- Get a mortgage pre-approval and re-confirm before closing.
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Every builder's contract is different. The single best protection is an experienced pre-construction agent plus a real-estate lawyer reviewing the agreement before the cooling-off period ends.
Check your builder's licence (HCRA)
Before you buy, verify the builder is licensed. In Ontario, every new-home builder and vendor must be licensed by the HCRA (Home Construction Regulatory Authority). The free Ontario Builder Directory lets you look up any builder's licence status, how long they've been building, how many homes they've built, and any charges, convictions or conduct concerns on record.
| Need | How to reach the HCRA |
|---|---|
| Look up a builder's licence | Ontario Builder Directory (obd.hcraontario.ca) |
| General info / website | hcraontario.ca |
| info@hcraontario.ca | |
| Phone | (416) 487-HCRA (4272) |
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Always confirm your builder is HCRA-licensed and check their record in the Ontario Builder Directory before signing. An experienced agent will do this with you.
Frequently Asked Questions
How do I check if a builder is licensed in Ontario?
Use the HCRA's free Ontario Builder Directory at obd.hcraontario.ca. You can search any builder by name to see their licence status, years active, number of homes built, and any charges, convictions or conduct concerns. Every new-home builder in Ontario must be HCRA-licensed.
What happens if the builder delays my closing?
Ontario's Tarion warranty includes delayed-occupancy/closing rules. If the builder moves your date beyond the agreed terms without proper notice, you may be entitled to compensation. Your lawyer can confirm your rights under your specific contract.
Can the builder cancel the project?
It can happen (e.g., financing or approvals fall through). Your deposit is protected for condos under Ontario rules and held in trust, so you get your money back — but you lose the home and any appreciation. Buying from established builders reduces this risk.