Requirements for Purchase Agreements
An agreement of purchase and sale acts as a legally binding written agreement that is used between both the buyer and seller in a real estate transaction. In simplified terms, it is the offer document that the buyer submits to the seller when purchasing a home
Include an Addendum
The Addendum sets out standard contract provisions related to closing dates and delays. You must include the applicable Addendum with every purchase agreement and complete it in full.
To coincide with the launch of the Home Construction Regulatory Authority (HCRA), the Addendum was updated. Every new purchase agreement signed on or after February 1, 2021 must attach a new version (dated October 7, 2020) of the applicable Addendum.
There are no substantive changes, but the new Addenda do include small changes to reflect the new regulator (HCRA), such as replacing the reference to Tarion Registration Number with HCRA Licence Number. The new Addenda are available in PDF format here
Include a Condominium Information Sheet
If the purchase agreements for a condominium project have an early termination condition that may result in cancellation of the project, then a Condominium Information Sheet must be attached to the purchase agreements.
You are required to complete the Condominium Information Sheet and include it as the first page of the purchase agreement, and the purchaser must sign the document to acknowledge having received and read the document.
This requirement applies to projects where the first arm’s length purchase agreement in the project was signed on or after January 1, 2020 all purchase agreements in the. For more on this requirement, click here for the HCRA directive.
Provide the Condominium Buyers' Guide
As of January 1, 2021, you are required to provide Ontario’s Residential Condominium Buyers’ Guide (the Condo Guide) to purchasers of residential pre-construction condominium units. A purchase agreement is not binding until the Condo Guide has been provided to the purchaser.
The Condo Guide equips prospective purchasers of residential pre-construction condo units with information on condo ownership and the condo purchase process. Purchasers of resale residential condo units may also wish to review the Condo Guide.
The Condo Guide is available on the Condominium Authority of Ontario’s website.
Submit purchaser contact information to Tarion
Within 30 days after signing a purchase agreement or construction contract, you are required to submit to Tarion, in writing, contact information for the purchaser or owner, including, name, address, and email address.
Tarion will use this information to communicate important information to the purchaser or owner about warranty coverage and the importance of the pre-delivery inspection in the period before possession.
You can submit purchaser information to Tarion by downloading our Excel spreadsheet template. Once the spreadsheet is completed, you can upload it to BuilderLink or email it to email@example.com. The spreadsheet is also available for download on BuilderLink.
Refer Purchasers to Tarion's Homeowner Learning Modules
Our learning modules are an online learning tool comprised of interactive modules that provide overviews of specific parts of the new home buying journey and the relevant warranty information. You can find it in your resources section.
These modules include the substantive warranty process information that was formerly included in a document titled Homeowner Information Package (HIP).
You are encouraged to provide a link to the Learning Hub to purchasers.
Requirements for Sale & Construction of Condominiums
If you are proposing to sell or build residential condominiums in Ontario, you must first be licensed by the Home Construction Regulatory Authority (HCRA).
You are not permitted to sell any condominium units until you receive Qualification for Enrollment confirmation from Tarion. For more information on the qualification for enrolment and enrolment process, see Getting Started Section.
If you are registered with BuilderLink, Tarion's online builder service, you can complete your application forms electronically. If you are not registered with BuilderLink, we encourage you to register today. Register with BuilderLink.
There are four possible attachments to Agreements of Purchase and Sale (APS) signed on or after February 1, 2021:
Attachment One: Updated Addendum
To coincide with the launch of the Home Construction Regulatory Authority (HCRA), the addendum was updated. Every new purchase agreement signed on, or after, February 1 must have a new version (dated Oct 7, 2020) attached.
There are no substantive changes, but the new addendums do include small changes to reflect the new regulator (HCRA) including replacing the reference to Tarion Registration number with the HCRA Licence number. The new Addenda are available in PDF format here, and in Word format on BuilderLink, or upon request.
Attachment Two: Warranty Information Sheet
The Warranty Information Sheet is a concise overview of a home buyer’s statutory warranty coverage and includes information about the new home warranty (provided to them by their builder and backed by Tarion), the Pre-Delivery Inspection, deposit protection and is available in six versions: freehold, condominium, contract homes, residential condominium conversion, vacant land condominium and new home with a parcel of tied land. The information sheets are available as PDFs and in Word format on BuilderLink.
Effective February 1, 2021, Builders are required to attach the appropriate version of the Warranty Information Sheet to every purchase agreement or construction contract with an owner at the time the document is signed. This can be achieved by printing a hard copy and physically attaching it to the purchase agreement or construction contract or by including a PDF of the Warranty Information Sheet along with the purchase agreement or construction contract if being sent digitally.
Attachment Three: Ontario Residential Condominium Buyers' Guide
As of January 1, 2021, Ontario’s Residential Condominium Buyers’ Guide (the Condo Guide) must be provided to buyers of residential pre-construction or new condo units by the declarant (developer) when buyers are purchasing from the developer or person acting on behalf of or for the benefit of the developer. The Condo Guide equips prospective buyers of residential pre-construction or new residential condo units with information on condo ownership and the condo purchase process. Purchasers of resale residential condo units may also wish to review the Condo Guide.
Under section 73 (2) of the Condo Act, buyers have a 10-day cooling off period in which they may rescind their agreement of purchase and sale. This 10-day period begins on the later of the date on which buyers receive the agreement of purchase and sale, disclosure documents and the Condo Guide.
Regulations have not been made to specify the manner of delivering or receiving the Condo Guide. Developers may wish to use the same processes and manners in which they currently provide the disclosure statement to provide the Condo Guide (e.g. electronically or in paper format). The Condo Guide is available in its most updated form on the CAO’s website.
Attachment Four: Condominium Information Sheet
Effective January 1, 2020, all pre-construction APS must have a Condo Information Sheet attached. This condo information sheet must be completed and placed at the front of the agreement of purchase and sale, and purchasers must sign the document to acknowledge having received and read the document. This document is necessary for new condominium projects going forward where the project has conditions that may result in its cancellation. For more on this requirement, click here for the HCRA.
Residential Condominium Conversion Projects
As of January 2018, residential condominium conversion projects qualify for warranty coverage. The warranty applies to projects where the first purchase agreement is signed on or after January 1, 2018.
A residential condominium conversion project is when an existing non-residential building (e.g., warehouse, church) is converted into a condominium and pre-existing elements of the building, such as the foundation or frame, are incorporated into the new design and construction of the project. Buildings that were originally built for residential use – like rental apartment buildings – will not qualify for coverage unless otherwise specifically permitted.
Licensing Requirements for Residential Condo Conversion Projects
Builders who wish to construct residential condominium conversion projects and vendors who wish to sell units in these projects must be licensed by the Home Construction Regulatory Authority (HCRA).
Builders and vendors of residential conversion projects must comply with Registrar Bulletin 18, which requires that the vendor and builder provide a: Property Assessment Report, Capital Replacement Plan, and a Pre-Existing Elements Fund Study before any sale of units and at least 90 days before commencement of construction. Tarion must approve these documents before the project will be enrolled.
Vendors and builders of residential condominium conversion projects must also comply with the design and site review requirements of Registrar Bulletin 19.
The enrolment fee for a unit in a residential condominium conversion project is currently double the standard enrolment fee, as set out in Registrar Bulletin 15.
Pre-Existing Elements Fund
Upon the enrolment of the units in a residential condominium conversion project, the vendor must provide evidence satisfactory to Tarion that the Pre-Existing Elements Fund has been established with an escrow agent authorized by Tarion and that the required amount is in the Fund.
Tarion Application Process
To learn more about the Tarion Application process please visit our Licensing & Application process page
Setting Occupancy Dates
Occupancy date options
You have the option to set a firm or a tentative occupancy date in the purchase agreement.
Tentative Occupancy Date
If you set a tentative occupancy date, you may extend the occupancy date on one or more occasions without having to pay compensation to the purchaser, provided you give sufficient advance written notice for each extension and you do not exceed the Outside Occupancy Date.
Firm Occupancy Date
If you set a firm occupancy date, you cannot extend the occupancy date without paying compensation to the purchaser, except in cases of unavoidable delay or where you and the purchaser mutually agree to amend the purchase agreement.
The Addendum sets out standard contract provisions related to occupancy dates and delays. You must include an Addendum with every purchase agreement.
There are two Addendum forms that can be used for condominium units depending on the type of occupancy date you set:
The first page in the Addendum is the Statement of Critical Dates, which sets out important dates related to the home’s occupancy date. You must complete the Statement of Critical Dates in full, or else your purchase agreement cannot be enforceable. Tarion’s online Critical Dates Calculator is a fast and easy way to complete the Statement of Critical Dates.
The Addendum also includes parts that set out disclosure obligations, conditions of sale, and termination conditions.
Compensation for delays
If you delay occupancy beyond the firm occupancy date and no exceptions apply – such as a mutual agreement to extend the occupancy date or an unavoidable delay – you must provide compensation to the purchaser.
The maximum amount of compensation under the warranty is $7,500. This includes:
- $150 per day for direct living expenses (such as accommodation and meals) for each day of delay until the date of occupancy or termination of the purchase agreement (if applicable); and,
- Any other expenses incurred by the purchaser as a result of the delay, such as moving or storage costs.
The purchaser is not required to provide receipts for direct living expenses but must provide receipts if they are seeking compensation for other costs such as moving and storage.
An unavoidable delay is an extraordinary circumstance where an occupancy date may need to be delayed through no fault of the builder or purchaser. This may be a strike, fire, explosion, ‘act of God’, civil insurrection, act of war or terrorism, or a pandemic.
If such a delay occurs, you are permitted to extend all deadlines by up to the length of the unavoidable delay period without paying delayed occupancy compensation. You must inform the purchaser at the outset of the delay, provide an estimate of how long it will last and give written notice as soon as the delay has ended.