We call upon the Government of Ontario to protect families, homebuyers and individual investors whose deposits remain tied up in pre-construction projects that have been delayed for more than 5 years.

Many purchasers entered into agreements in good faith, paid substantial deposits and expected their homes to be completed within a reasonable period. Instead, some have received repeated notices changing their closing or occupancy dates. Years later, they still do not have their homes and cannot recover the money they entrusted to builders and developers.

The consequences are serious. Purchasers may be unable to buy another home, qualify for replacement financing or use their savings for family, retirement and other essential needs. During these delays, housing prices, mortgage rates, construction costs and personal circumstances may change significantly.

Ontario’s delayed-closing framework allows closing dates to be extended in certain circumstances, including an “Unavoidable Delay.” Tarion’s guidance states that the delayed-closing warranty generally requires compensation when closing is delayed beyond the firm date, except where the parties mutually agree or the delay results from an Unavoidable Delay. It also recognizes an Outside Closing Date and a purchaser termination period within the applicable framework. [tarion.com]

COVID-19 created genuine and unprecedented construction disruptions. However, Tarion’s COVID-19 guidance states that the pandemic’s effect on a home’s construction schedule was to be determined on a case-by-case basis. The guidance did not establish the same automatic extension period for every project. [tarion.com]

Temporary pandemic protections should not become a basis for indefinite delays. After more than 5 years, builders and developers should be required to demonstrate, through clear and independently verifiable evidence, why a project has not been completed and why purchasers’ deposits should continue to be retained.

We respectfully call upon the Government of Ontario and the Legislative Assembly of Ontario to:

• Create an unconditional right to withdraw from a new-home or pre-construction purchase when the project has been delayed for more than 5 years from the original anticipated closing or occupancy date.
• 
  Require the builder or developer to return the purchaser’s entire deposit, including any money paid for upgrades, changes or other project-related charges, within 30 days of receiving the purchaser’s written cancellation request.
• Require reasonable interest to be paid on every refunded amount, calculated from the date each payment was received until the date the refund is issued.
• Establish a fair statutory interest rate that reflects both the length of the delay and prevailing market conditions, rather than allowing deposits to be held for years with little or no meaningful financial compensation.
• Limit the use of COVID-19 and other Unavoidable Delay provisions by requiring builders to provide current, project-specific evidence demonstrating exactly how the event prevented construction from proceeding.
• Prohibit indefinite or repetitive closing-date extensions and establish a maximum cumulative period for unilateral delays.
• Require independent regulatory approval before a project’s closing or occupancy date can be extended beyond a prescribed period.
• Apply the new protections to existing long-delayed projects, including projects in which purchasers have already been waiting for 5 years or more, to the extent legally permissible.
• Create an expedited and affordable dispute-resolution process so purchasers can obtain refunds and interest without having to commence lengthy and expensive court proceedings.
• Introduce meaningful penalties for builders and developers that issue unsupported delay notices, fail to provide transparent project updates or do not return purchasers’ money within the required period.
• Require public reporting for materially delayed developments, including the project’s construction status, outstanding approvals, revised completion date and documented reasons for the delay.
• Protect purchasers against retaliation, additional charges or adverse contractual consequences when they request a refund, challenge an extension or participate in a purchaser advocacy group.

Why this matters

Buying a home is one of the most significant financial decisions a family or individual will make. Purchasers should not be required to leave substantial deposits tied up indefinitely while closing dates are repeatedly changed.

Builders and developers must be given a reasonable opportunity to address genuine delays outside their control. However, that flexibility must be balanced with meaningful consumer protections, financial accountability and an enforceable end date.

A purchaser who has waited for more than 5 years should have the freedom to decide whether to continue waiting or withdraw and recover their money.

Broader impact on Ontario’s housing market and local communities

The harm caused by these prolonged delays extends beyond the purchasers whose deposits remain tied up.

• When substantial deposits are held for more than five years, affected families and individual investors may not have sufficient funds available to purchase another new home. This prevents potential homebuyers from pursuing other housing opportunities, including new homes that are already completed or available for sale.
• It may also prevent eligible purchasers from taking advantage of time-sensitive federal or provincial incentives and GST/HST new-housing rebates. Eligibility for these rebates depends on specific conditions, including how the property will be used and, in some cases, when the agreement is entered into or the home is acquired. [canada.ca], [canada.ca]
• As a result, purchasers may be trapped in delayed projects while other available homes remain unsold. They should not have to choose between continuing to wait indefinitely and walking away from deposits representing years of savings.
• These delays may also have broader economic consequences. When purchasers cannot redirect their deposits toward available homes:
• fewer completed new homes may be purchased and occupied;
  the provincial government may lose or defer land transfer tax revenue associated with alternative purchases;
  the City of Toronto may lose or defer municipal land transfer tax revenue from purchases within Toronto; and
  municipalities may experience delays in adding completed and occupied homes to their property-tax base.
• Returning long-held deposits with reasonable interest would allow affected purchasers to re-enter the housing market, consider completed homes and contribute to housing activity in communities across Ontario.

We further call upon the Government of Ontario to:

• Recognize the wider housing-market and economic impact of long-held deposits, including the inability of affected purchasers to redirect their money toward completed or immediately available new homes.
• Ensure that purchasers are not unfairly disadvantaged or prevented from accessing applicable housing incentives and GST/HST rebates because their deposits have remained tied up for years in substantially delayed projects.
• Introduce transitional protection for affected purchasers, where legally and constitutionally possible, so that purchasers who cancel a project delayed for more than five years are not automatically excluded from otherwise applicable provincial new-home incentives solely because of circumstances beyond their control.
• Require the prompt release of deposits and reasonable interest so affected purchasers can re-enter the housing market and purchase homes that are available for immediate or near-term occupancy.
• Consider the broader public-interest consequences of prolonged project delays, including deferred housing transactions, provincial land transfer tax revenue, Toronto municipal land transfer tax revenue where applicable, and municipal property-tax revenue from completed and occupied homes.
• Develop a coordinated response involving provincial ministries, Tarion, the Home Construction Regulatory Authority and affected municipalities to address projects that have remained substantially delayed for more than five years.

Please sign this petition to urge the Ontario government to end indefinite delays and provide fair, timely relief to affected purchasers.