Prior to revisions in the Condo Act in May 5, 2001, once a Builder Agreement was signed by both the builder and the purchaser, the deal was firm. However, changes in the Condo Act created space for a Rescission (or “Cooling Off”) period of 10 days.
During this “Cooling Off” period of 10 calendar days, the purchaser can terminate a purchase from a builder. The purchaser must inform the builder in writing and delivered to the builder’s representative of their intention to cancel the purchaser.
The 10 day “Cooling Off” period begins on the later of:
1) The date on which the purchaser received the condo disclosure package from the builder OR
2) the date on which the purchaser received a copy of the purchase agreement signed by both the builder and the purchaser.
Following the delivery of written instructions to the builder to cancel the deal, all deposits must promptly be refunded to the purchasers, with interest.
IMPORTANT TO REMEMBER:
- If you do take advantage of the 10 day “Cooling Off” period to terminate the purchase, it is wise to keep a copy of the signed receipt for delivery of your written intention to cancel. Keeping this receipt on hand will serve as proof in the event that the builder claims you are going ahead with the deal.
- In addition, a second 10 day “Cooling Off” period arises in a situation where there is a material change to the disclosure package and the builder delivers a mandatory revised disclosure package prior to closing.
- Now, under the current Condo Act, any purchaser who has the available funds can avoid paying interest during occupancy if they give the builder written notice during the 10 day “cooling off” period that they will be paying the cash balance of the purchaser price upon the Occupancy Date. A buyer who needs a mortgage cannot due this, as a mortgage cannot be registered on title until the Condo Corporation is registered.
- For more information about interest payable to purchasers please see, Builder Condo Warnings.