A new amendment to regulations under the Condominium Act may make it more attractive to purchase a pre-construction condominium in Ontario.
Intended to protect purchasers in the event of a cancelled project -- something that’s a lot more common than one may assume -- the amendment sets out a new interest rate, based on the Bank of Canada Rate, that developers must pay to purchasers when terminating purchasing agreements, including condo cancellations.
For those currently in the pre-construction condo market, the new rate applies to terminations related to condo projects that start selling on or after January 1, 2023. The regulation revokes one that was previously filed in April 2022.
Coming as further reassurance to prospective buyers, the government is also enhancing consumer protections for purchasers of new and pre-construction condos with amendments to a regulation under the Ontario New Home Warranties Plan Act. Those amendments require that Tarion Warranty Corporation provide information about condo cancellations and terminated purchase agreements to the Home Construction Regulatory Authority for posting to the Ontario Builder Directory.
Additionally, Tarion’s authority to require vendors and builders to provide information about cancelled condo projects and terminated purchase agreements (when they are terminated through no fault of the purchaser) has been clarified in regulation.
Whether this stimulates the "softened" new condo market in places like the Greater Toronto Area will remain to be seen. But it's a positive step forward for weary purchasers, nonetheless.
