10 Day Rescission Period or “Cooling Off Period” When Buying a Pre-Construction Condo in Toronto
During a hot condominium market, it is easy for Purchasers looking to invest for themselves, their children or as an income property, to rush into a deal and a project without knowing all the pertinent facts. Therefore It was good thinking by the government of the day to provide statutory rescission rights under the Ontario Condominium Act, 1998 (the “Act”) .
Under the Act, upon signing an agreement of purchase, a Purchaser must be given disclosure documents that will form the basis of the above vis-a-vis the condominium declaration, by-laws, rules and disclose proposed amenities, budgets, condominium plans, etc. Once these documents are delivered, the Purchaser has statutory rights of recession.
Section 73 of the Act entitled “Rescission of Agreement” permits a Purchaser who receives the disclosure statement to rescind the agreement of purchase within ten days of entering into the agreement without having to even disclose reasons. In order to do so, only the Purchaser and or their solicitor only, can rescind the agreement by giving notice in writing to the Declarant (developer) and or the Declarant’s solicitor within ten days of the later of the date the Purchaser receives the disclosure and the date the Purchaser received a copy of the agreement of purchase. Once notice of rescission is delivered, the Declarant must “promptly” refund any deposit monies tendered pursuant to the agreement.
Along with being able to review the documents and apply for a mortgage pre-approval, you are also able to back out of your purchase with no penalties. Any cheques that were submitted with the offer to the developer will be returned to the buyer without penalty, if they choose to cancel their purchase.
If you are buying a new condominium unit, make sure to have an experienced lawyer, specializing in new condo sales, review all disclosure documents and the agreement of purchase before your rights to rescission expire. Call Us for Preferred List of Lawyers in Toronto.