What Happens If Your New Home Closing Is Delayed in Ontario? Tarion Rules and Compensation

Delays are common in new construction. Labour shortages, permits, weather and supply issues can all push a closing date back. The good news: in Ontario, builders cannot move your date whenever they like. The Tarion Addendum attached to every new home agreement sets strict rules on how and when dates can change, and what compensation you are owed if the builder misses them.

The Dates in Your Agreement

Look at the first page of your Tarion Addendum. For freehold homes it will list either a firm closing date from the start, or a series of dates:

• First Tentative Closing Date: the builder’s initial estimate.
• Second Tentative Closing Date: the builder may extend once, up to 120 days after the first tentative date.
• Firm Closing Date: the builder may extend again, but the firm date can be no later than 240 days after the first tentative date.
• Outside Closing Date: the latest date by which the home must close, generally 365 days after the earlier of the second tentative or firm closing date.

Condominium agreements work similarly using tentative, firm and outside occupancy dates.

Notice Requirements

Builders must give written notice of changes. According to Tarion’s freehold closing dates and delays page, at least 90 days’ notice is required to set a new tentative or firm date. If the builder fails to give proper notice of a tentative date change, that tentative date can automatically become the firm closing date.

Delayed Closing Compensation: How Much?

If the builder fails to close by the firm closing date (and the delay is not excused), you are entitled to compensation:

• $150 per day for living expenses (accommodation and meals), without needing receipts
• Reimbursement of other reasonable, documented costs such as moving and storage
• A total maximum of $7,500
• An additional $1,500 in certain cases where the builder does not give at least 10 days’ notice before a firm date that the closing will be delayed

Condo buyers have similar protection for delayed occupancy, as described on Tarion’s coverage before you close page.

When Compensation Does Not Apply

• Mutual agreement: if you sign an amendment agreeing to a new date, you may be waiving compensation for that delay. Read carefully before signing.
• Unavoidable delays: events beyond the builder’s control (such as strikes, fire, natural disasters or certain government restrictions) can extend dates, but the builder must notify you promptly with an estimate of how long the delay will last.
• Delays caused by the buyer.

Can You Walk Away?

If the home is not complete by the outside closing date, you generally have a right to terminate the agreement within a set window (30 days) and receive your deposit back with interest. This is a powerful protection, but walking away is a big decision in a rising market; talk to your lawyer and realtor first.

How to Claim

1. Track your living expenses and keep receipts for moving and storage.
2. Submit your claim to the builder in writing; Tarion notes claims can be made with the builder within 180 days, or with Tarion within the first year of possession.
3. Check your statement of adjustments; compensation is often credited on closing.

Protect Yourself Before You Sign

• Understand the full date range, not just the first tentative date, before selling your current home or ending a lease.
• Check the builder’s track record and licence on the HCRA Ontario Builder Directory.
• Plan financing for the long end of the range. A mortgage approval or rate hold rarely lasts years; speak with a mortgage professional.
• Remember rebate deadlines. For example, the Ontario Enhanced New Housing Rebate requires construction to be substantially complete by December 31, 2031.

Freehold buyers signing in 2026 should also complete Tarion’s 45-day purchase notice to keep full deposit protection. And when your closing finally arrives, use our PDI checklist for the final walkthrough.

FAQ

Can my builder delay my closing without paying compensation?

Yes, within limits: tentative date extensions made with proper notice do not trigger compensation. Compensation applies once the firm closing date is missed without a valid excuse.

Is $7,500 the most I can receive?

Under the Tarion Addendum, total delay compensation is capped at $7,500 (plus the additional amount for short-notice delays where applicable).

Does this apply to assignment buyers?

Generally, an assignee steps into the original buyer’s contract, including the Tarion Addendum. See our assignment sales guide.

This article is general information, not legal, tax or financial advice. Rules, rebates and programs change; confirm details with your real estate lawyer, accountant or mortgage professional before you sign.