While experiencing misgivings is a normal part of the home buying process, buyers who feel enough regret to walk away from a deal after a formal agreement to purchase has been reached are liable to lose their deposit.
Aside from the prospect of losing tens of thousands of dollars, buyers who get cold feet could also face potential legal action from the seller, as well as legal action from the brokerage representing them.
Fortunately for real estate buyers in Ontario, one notable exception is made under Section 73 of Ontario’s Condominium Act. This exception gives buyers of pre-construction condos a mandatory 10-day “cooling-off” period. During this 10-day cancellation window, buyers are allowed to cancel an agreement of sale and eliminate their buyer’s remorse with no legal or financial ramifications.
This 10-day cancellation window does not extend to resale purchases made on MLS and strictly applies to contracts where a pre-construction property is bought directly from a builder.
When Buyers Can Use the Cooling-Off Period
Buyers are allowed to sever the agreement for any reason, from a change of heart to concerns about finances or the neighbourhood (it helps that the reasons do not need to be publicly disclosed).
To take advantage of this mandatory cooling-off period, the buyer of the pre-construction condo should provide written notice that he intends to cancel the Agreement of Purchase and Sale. The builder or their attorney needs to receive this within 10 days of the date the buyer received the disclosure statement, or signed the Agreement of Purchase and Sale (whichever was received later).
To minimize headaches and ensure a smooth cancellation, buyers should consider hiring a real estate attorney to guide them throughout the process.
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