July 6, 2025
Over the last two decades, the condominium market in Ontario has undergone intense transformation. Fueled by urban intensification, shifting buyer preferences, and the rising cost of land, condo living has become a prominent feature of Ontario’s real estate landscape. But the pace has changed. While new builds once led the massive shift,
So, what’s the difference between buying a condo from a builder versus purchasing a resale unit? Let’s unpack the key legal, structural, and financial distinctions you need to know.
New Builds: Buying from the Blueprint
Purchasing a pre-construction condo often means buying a unit that exists only on paper. You will sign an Agreement of Purchase and Sale (APS) well before the building is complete. The closing date could be years away.
Under Ontario law, the condo is not formally created until the declaration under the Condominium Act is registered. This declaration acts as the building’s “constitution”, where it outlines the unit boundaries, common elements, and rules of mutual land use. Once half the units are sold in the building, control of the condo shifts from the builder (or “declarant”) to an independent board through a turnover meeting. This board has two critical years to audit engineering issues, manage budget deficits, and address any construction deficiencies left behind by the builder.
To protect consumers during this vulnerable time, Ontario relies on the New Home Warranty Plan Act. Every new home, including condo units, must be enrolled in the Tarion Warranty Program. Tarion coverage attaches to the home, not the buyer, and stays in place for up to seven years, offering protection against everything from minor defects to major structural failures. After 2021, builder licensing and oversight shifted to the Home Construction Regulatory Authority, separating builder regulation from warranty management.
Resale Condos: A Move-In-Ready Reality
In contrast, purchasing a resale condo offers far more certainty. The unit is already built, the condo corporation is already operating smoothly, and closing timelines are usually between 30 to 90 days.
Resale transactions typically involve a status certificate, which outlines the financial and legal state of the condo corporation, such as its reserve fund, bylaws, rules, insurance, and any ongoing legal issues. It is essential for buyers to work with a real estate lawyer to review this carefully, as it can significantly affect the value and future expenses related to the unit.
There is no 10-day cooling-off period for resale condos, and Tarion warranty protection does not apply. But the trade-off is transparency: what you see is what you get, and you can inspect the property yourself or hire a professional to ensure it is in good shape.
Condo Operations: New Build vs Resale
In new builds, the builder maintains control until at least 50% of the units are transferred. During this phase, the builder may register bylaws and set up mutual use agreements to guide land responsibility. After the turnover meeting, a newly elected board (usually composed of at least three members) takes over and can start operating independently.
Resale condos, on the other hand, already have fully functional boards, financial histories, and community rules in place. Any desired changes to the condo’s governance documents (bylaws, declarations, etc.) must typically be approved according to the Condo Act’s voting thresholds, which happens sometimes with or without owner consent, depending on the issue.
Your Rights as a Pre-Construction Buyer
Before you are legally bound to the purchase a new build condo unit, builders must provide a comprehensive disclosure statement, outlining essential project details, budget, amenities, and more. If this disclosure is incomplete or misleading, the purchaser has the right to void the APS and recover their deposit.
Most importantly, every new build condo buyer gets a 10-day cooling-off period, starting from when you receive the fully signed APS or all required disclosure materials. During this time, you can seek legal advice, review the project’s financial status, and cancel the deal without any liability and with a full refund. This right is statutory and automatic in any pre-construction agreement of purchase and sale.
If a material change occurs after signing, such as a significant alteration in the building’s structure, amenities, or suite size, it may entitle you to a new 10-day window to reconsider. Courts have clarified that material changes are those which would substantially impact your enjoyment, the use of the unit, or its value from a reasonable buyer’s perspective.
Understanding Tarion Warranty for New Builds
Buying a pre-construction condo requires legal protection, financial security, and a regulated process that keeps builders accountable. Tarion’s warranty system is one of the most powerful tools available to new buyers in Ontario. It is a major reason why new builds are fundamentally different from resales.
Pre-Possession Coverage: Before You Move In
Before you turn the keys into your new unit, Tarion provides four key protections designed to shield purchasers from risk during the construction and closing process.
Post-Possession Coverage: After You Move In
Once you take possession, Tarion’s coverage continues and it is broken down into three time periods, each with a distinct focus:
Year 1 Coverage
This year is your chance to report the most visible, day-to-day defects, which is anything from cracked tiles to misaligned doors or heating problems.
Year 2 Coverage
This stage moves deeper into structural and health-related concerns, including:
These types of issues often emerge after a full cycle of seasonal weather, and they can be costly if left unaddressed.
Years 3 to 7: Major Structural Defects
In the final coverage window, Tarion focuses on:
The Pre-Delivery Inspection (PDI): Your First Line of Defense
Before moving in, every buyer is required to complete a Pre-Delivery Inspection (PDI) with the builder. This is a crucial walkthrough where you will note:
This inspection becomes the basis of evidence for your warranty rights. Any issue you document is assumed to have existed at possession. If you notice new problems after move-in, you have 30 to 60 days to report them to the builder.
If the builder does not resolve the issue, Tarion steps in to enforce repairs or compensate the purchaser from a builder-funded warranty fund.
What About Common Elements in Pre-Construction Condos?
Tarion does not protect individual units. Lobbies, corridors, HVAC systems, and other shared infrastructure that are considered “common elements”. These are the responsibility of the condo corporation, which are also covered under Tarion and follow the same coverage periods.
However, the protocol for filing these claims is different. The condo board must file the complaint. It is important for unit owners to stay informed and involved with their board to ensure that shared defects are reported and resolved.
Disputes and Appeals: When Things Go Wrong
Sometimes, disputes arise. If a buyer is unhappy with Tarion’s decision on repair matters, they can enter mediation, which is a binding process run by Tarion. If still unsatisfied, buyers can appeal to the Licence Appeal Tribunal, which operates independently under Ontario law. Tarion can discipline builders who fail to comply, through administrative penalties and judicial oversight.
Your Rights as a Resale Buyer
Resale units, while offering speed and transparency, do not come with Tarion protection. You buy what you see, and you are responsible for your own for future defects.
Instead, protections can be secured through the status certificate. A status certificate is a snapshot of the condo corporation’s financial health and governance at a specific moment in time. It is available to anyone who requests it and pays the $100 fee, and it must be provided within 10 days. If it is not delivered on time, the law assumes the unit has:
In such a situation, the purchaser has upper hand. If the condo board fails to disclose a financial issue, the new owner is not responsible for surprise arrears or retroactive payments.
Legal Review is Critical – Not Optional!
Whether you are eyeing a brand-new condo unit in a high-rise building or a comfy lived-in unit in a thriving community, the legal framework surrounding your purchase matters as much as the location and the layout. Your exposure to rights, responsibilities, and financial liabilities depend on the type of condo you decide to purchase. The differences begin at the heart of both builder and resale transactions which is the Agreement of Purchase and Sale. The pro-developer clauses, buyer protections, and crucial role of status certificate reviews require legal expertise and attention in different manners.
The Builder’s Advantage: APS Clauses in New Builds
New construction condos often come with clauses that are favourable to developers, and they are hidden in dense APS documents. Most buyers fail to fully understand what they are agreeing to. Two of the most significant clauses to watch for are:
This clause allows the builder to increase the purchase price if construction costs rise and pass those increases onto the purchaser. Meanwhile buyers are left in a vulnerable position and have no ability to negotiate, challenge, or opt out of these costs. If you are buying a new build, it is crucial to understand that additional charges like development levies, utility hook-up fees, and other adjustments are not covered by your mortgage. These are out-of-pocket costs due at final closing, and they can add up quickly. In such circumstances, you could sign for a $700,000 condo only to discover you owe an extra $20,000 at closing. This is a financial risk!
Most new condos advertise prices “net of HST rebate.” But who receives that rebate depends on this clause. The APS may assign the right to the rebate to the builder. The builder would then decide if the purchaser is eligible to claim it. If the purchaser does not qualify (e.g. cases where the purchaser does not intend to occupy the unit as their primary residence), the purchaser will have to pay the rebate amount back to the builder, which is often thousands of dollars.
How can we help?
These clauses reflect a broader truth: builder APS agreements are designed and structured to protect the developer’s interests, not the purchasers. This is why legal review is critical — not optional! At Bradshaw and Mancherjee, our real estate lawyers have proficient experience in identifying the financial impact of price escalation clauses and clarifying whether the HST rebate assignment puts the buyer at any financial risk earlier on. Without legal guidance, purchasers may be taken advantage of by builder-friendly clauses and unknowingly accept terms that significantly alter the total cost of their home.
APS and Status Certificates in Resale Condos: Standard Forms, Customized Protections
Resale transactions operate under a more transparent and purchaser-friendly structure. They rely on the OREA standard purchase and sale agreement, tailored for the type of condo being purchased (standard, freehold, common element, or vacant land). The consumer protection in resale condo transactions lies in the status certificate, which was previously known as the estoppel certificate.
How can we help?
At Bradshaw and Mancherjee, our lawyers meticulously review the APS and status certificate with strong attention to detail. We help you understand your risks, protect your interests, and make informed decisions.
As part of our review, we will:
If your offer is conditional on a status certificate review, we will guide you through any red flags that may give you as the purchaser the right to walk away. If the offer is not conditional on a status certificate review, we will perform a pre-offer review so that you are fully aware of the transaction you are stepping into. In both cases, we as your lawyers act as strategic advisors based on your risk tolerance and long-term investment plans.
Unlike builder contracts, resale agreements give you the flexibility to negotiate buyer protections. Our lawyers can help draft or refine custom clauses in Schedule A, including:
In our review, we also double-check that locker and parking units are registered within the same condo corporation. If they are not part of the same condo corporation and belong to a neighbouring building, we will advise on obtaining an additional status certificate and conduct a separate legal review to avoid any related title or financing complications.
Condo Closings: Managing Risks, Expectations, and Real-Life Realities
Buying a condo is more than just a legal transaction, it is a lifestyle shift, a financial commitment, and a re-evaluation of expectations. Whether you are purchasing a brand-new unit from a builder or a resale condo in an established building, the closing experience and the risks involved are very different.
New Builds: Buying Into the Future — Construction Zone from Occupancy to Closing
Client experience and education are critical when purchasing pre-construction. One of the most overlooked realities? You are often stepping into a construction zone. Even at your Pre-Delivery Inspection (PDI), unfinished hallways, ongoing noise, and blocked amenities may be part of your day-to-day for months.
All pre-construction condo units involve occupancy fees. Interim occupancy is not the same as legal ownership. You are paying fees to live in a unit you do not yet legally own. On the final closing of pre-construction condo units, additional costs arise from development charges to utility meter fees, which can total thousands of dollars.
As your lawyers, we go through the APS line by line with you to ensure you are financially prepared for adjustments, levies, and interim occupancy costs so that there are no surprises on closing day. By confirming that plans match the Agreement of Purchase and Sale, we make sure that what you believe you are buying is what you will legally receive. As a team, we help you understand what you are agreeing to, explain the risks in plain language, and advise you on any red flags.
Resale Condos: Established Living with Lifestyle Limits
Resale buyers walk into an alternate reality, where they walk into rules, restrictions, and governance structures that are already in place. In such situations, the lawyer’s review helps buyers to be aware of real-life implications of condo living beyond finances. We translate the status certificate review into practical guidance that aligns with your plans.
Do you have a pet, plan to smoke, or plan to lease your unit? We review the condo’s declaration and bylaws to flag any restrictions that could limit your use or enjoyment of the unit. With a meticulous review of the status certificate, we will distinguish what is standard from what is a red flag. We will highlight what this means to you as a buyer whether it is upcoming increases in costs or pending litigation against the condo corporation. We will also advise you on special protection clauses to add to your agreement, like key/fob inventory, renovation warranties, or special assessment responsibilities.
The Power of a Status Certificate in Court
Ontario courts have made it clear: if a condo corporation fails to disclose key financial risks or upcoming costs, the buyer cannot be held responsible for those surprises later. Two recent court decisions highlight how powerful a properly reviewed status certificate can be and the consequences when condo corporations try to hide behind incomplete disclosure.
If the status certificate is silent, the buyer is protected.
Bruce v. Waterloo North Condominium Corporation No. 26, 2023 ONC 2995
In this case, the condo corporation knew about major work that would significantly impact the building’s budget but failed to disclose it in the status certificate provided to the buyer. The condo corporation claimed that the buyer should have pieced it together from other documents, like the financial statements.
However, the court did not agree. The court held that purchasers are entitled to rely on the status certificate alone. Buyers do not have the obligation to investigate and uncover hidden financial issues. The court decided that the buyer was relieved from paying any special assessments, loans, or contributions related to that undisclosed work.
Condo corporations are liable for undisclosed financial liabilities.
Gonzalez v. YCC 242, 2024 ONC 6372
In this case, the condo corporation tried to cover its tracks after failing to disclose two major financial liabilities: a $25,000 order to remove a solarium and a $42,000 special assessment. After the purchase, the condo issued a backdated status certificate in an attempt to claim that the buyer had been properly warned. But the buyers located the original certificate received on closing, which did not mention either expense.
The court found the condo corporation’s conduct unacceptable. The court decided to order the corporation to pay $75,000 in damages to the condo owner and take on the cost of the required repairs.
Conclusion
Buying a condo, whether from a builder or as a resale, is more than a transaction, it is a legal commitment bundled in fine print, timelines, and financial liabilities. From navigating price escalation clauses and Tarion warranties in new builds to scrutinizing status certificates and hidden liabilities in resales, the details matter and missing them can be very costly to you.
This is why having a real estate lawyer on your side is essential. Beyond just reviewing contracts, we advocate for your rights, negotiate protections, and help you understand exactly what you are signing up for. Whether it is capping levies, identifying lifestyle restrictions, or catching omissions that could lead to court battle, we are by your side. By working with our team at Bradshaw & Mancherjee, you are given clarity, certainty, and peace of mind to step into your transaction with legal confidence.
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