Rescission period for new build freehold homes
The Homeowner Protection Act, 2024 (Bill 200) received Royal Asset on June 6, 2024 and amended s.53 of the New Home Construction Licensing Act, 2017. This bill significantly impacted purchasers of pre-construction/new build freehold homes purchased from a builder by implementing a mandatory 10-day rescission or "cooling off" period. Buyers of new build freehold homes will now be able to rescind a purchase agreement as long as they provide written notice of recission to the seller within the timeframe. New build freehold home buyers will now enjoy the same protections as purchasers of new build condominiums.
The cooling off period gives buyers more time to understand obligations, conduct due diligence, and secure financing. During this cooling off period, we suggest you have a lawyer review your Agreement of Purchase and Sale. Throughout the review, you can discuss any concerns you might have and request adjustments to the agreement. Once the 10-day period is realized, your agreement is firm and you are unable to negotiate any amendments.
The 10-day cooling off period begins once the Agreement of Purchase and Sale has been fully executed, and is based on calendar days NOT business days.
Should you choose to rescind your purchase agreement, the builder shall promptly refund, without any penalty or charge, all capital received from the purchaser under the purchase agreement and credited towards the purchase price, in addition to interest calculated at the prescribed rate from the date that the builder received the money until the date the builder refunds it.
This provision is a compelling advancement for the residential real estate market. It allows for buyers to make an assured decision and move forward confidently with their purchase.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.