Buying New Construction Homes

Buying brand new construction homes can be exhilarating. Before you make a move, talk to an Axess Law real estate lawyer. 

We explain what’s different about buying new construction homes directly from developers, and review your contract for common errors or omissions that could trip you up. 

Remember, offers on new construction homes are legally binding. Let Axess Law ensure your contract covers all the important details.

What a real estate lawyer does. 

Talking to lawyer in buying houses

New Build Homes vs Resale 

Choosing between new construction homes and resale depends on your lifestyle, needs, and desires. But which construction is best for a house can be dictated by your budget and location. Tip: Brick and concrete are easy to heat and cool. Wood is cheaper to transport, and may withstand earthquakes better. Read why.

Our tips: 

  • Buy a resale home if money is an object, or you want an established neighbourhood. 

  • Pick a new build home for modern design or amenities, like open concept rooms and on demand hot water. 

  • Check out weather and soil conditions before finalizing building materials.

You may have to travel a bit further to transit and shopping in a new subdivision, but having a home that’s up to date and will last longer before renos are needed could be worth the extra price tag. 

Budget allowing, you may get more of what you want, but it’s not necessarily cheaper to build a house from scratch. New construction homes cost around $150 to $250 m² for permits, architect or design fees, and building costs. That doesn’t include finding a lot to put it on. For that reason alone, buying pre-construction homes directly from a builder can be a good idea. 

Calculate land transfer taxes for Ontario homes.

5 Tips For New Home Buyers

  1. Add a “subject-to” clause to your offer to allow a lawyer to review the contract before it becomes binding. Contracts for new construction homes typically include a right to lawyer advice, but confirm it before you sign. 
  2. Sales agreements for new construction homes may appear all-inclusive. Be sure your contract is specific, from the granite countertops to custom window blinds. You can negotiate upgrades, often for significantly more, but should not be charged for extras you didn’t agree to in writing.
  3. Make offers conditional on securing mortgage financing. Progress draw or completion mortgages release funding as new construction homes proceed. You could jeopardize your deposit if you act before your mortgage loan is approved.
  4. Inspect your home before you accept the keys. Pre-delivery inspections  are walkthroughs to catch defects and ask questions about your new home’s features. You can bring a professional home inspector, or rely on the builder’s assurances your home is built to the standard you expect.
  5. Warranties for appliances and a list of subcontractors are must-have items for new construction homes. Most builders give you a home maintenance binder. Use it to schedule regular check ups and locate local suppliers.

Best ways to word home inspection clauses. .

Who Gets the Deposit If the Deal Falls Through

Deposits on new construction homes are insured by Tarion. The New Home Warranties Plan returns your deposit if your home is not completed and your builder goes bankrupt.

You are covered for up to $20,000 for condos, $60,000 for new construction homes priced at $600,000 or less and 10% of purchase price, up to $100,000, for homes over $600,000. Deposits you pay for upgrades or extras over and above the purchase price are also protected when you buy a new freehold property or condo.

Higher deposits are not insured. Be wary if a developer asks for more than Tarion will repay.

Talk to a real estate lawyer about do you get the deposit back if a house sale falls through. 

Your New Home Warranty Coverage

New homes come with warranties. Read yours carefully before assuming you are covered for everything that could go wrong. 

Exceptions to your Tarion coverage:

  • normal wear and tear 

  • improper home maintenance

  • personal or property loss, such as lost income while supervising contractors 

  • materials you provide or install

  • defective work you approve

  • elevators, heating or cooling systems and more.

Register your home at as soon as you receive the builder’s Certificate of Completion and Possession. 

Occupation Delays and Your Options 

With some exceptions, your Tarion warranty gives you options if your builder delays your home’s completion.

Freehold Home Buyers

You get a delayed closing warranty when the agreement of purchase and sale is signed. It includes a mutually agreed upon closing date — firm if your developer is confident your home can be completed on time (you’re owed delayed closing compensation if not). A tentative closing date lets the builder extend the closing twice, for up to 240 days total, without compensating you.

Condo Buyers

Condo developers can set completion dates ranging from first tentative occupancy dates, the earliest your home will be ready, to outside occupancy dates, the latest you can expect to move in. You get 90 days advance notice if the date shifts. Be careful not to sell your current home based on tentative occupancy dates. You may or may not be compensated for delays.

Renos can void your new home warranty.

Securing new property with legal documents

Why You Need a Real Estate Lawyer

Axess Law has flat fee real estate lawyers near you for property searches and registrations. We discharge mortgages, and witness your signature on new mortgage documents, in person or virtually by remote video conference. Your Axess Law lawyer:

  • reviews your agreement of purchase and sale for “subject to’s”
  • finds clauses committing you to certain costs or actions
  • looks for hidden upgrade costs 
  • finds irregularities, such as material substitutions
  • checks if you own or lease the lot or if it’s a bare land strata
  • explains or negotiates closing costs
  • advises what to do if delays occur
  • answers your questions, like what is title insurance? 

We handle all the details, so you aren’t surprised when you open the door the first time. 

What’s in the agreement of purchase and sale.

Affordable Real Estate Lawyers, Anywhere You Are 

Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario  when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it. 

How to build a modular home

Book Appointments Online or By Phone

Our real estate lawyers video conference online anywhere in Ontario, or meet you in person at our convenient Ottawa or Greater Toronto Area locations. We have onsite parking and easy transit access. Make day or evening appointments by dialing our 647-479-0118 lawyer line (toll free to 1-877-402-4207) or book online. It takes just minutes of your time.