When you buy pre-construction you sign an agreement of purchase and sale for a unit that does not exist yet, at a price agreed today, for delivery on a date the builder estimates and can move.

Ontario law gives new condominium buyers a ten-day cooling-off period after signing, during which you can cancel and have your deposit returned. That is the window in which a real estate lawyer should review the agreement. Not after. Once those ten days pass, the contract stands.

The typical sequence is: sign, pay deposits in instalments over a year or two, wait through construction, take interim occupancy when your floor is ready but the building is not registered, then close for real once the condominium corporation is registered. The gap between those last two steps is the part most buyers do not anticipate.

Pre-construction deposits are paid in stages rather than all at once, typically spread over the first twelve to twenty-four months after signing, with a further instalment often due at occupancy. The total deposit percentage and the schedule both vary by builder and by project, and they are negotiable more often than buyers assume, particularly early in a launch.

Two things to understand about your deposit. First, in Ontario deposits on new condominiums are protected under the provincial new home warranty program up to a limit, so confirm what that limit is and whether your total deposit exceeds it. Second, deposits are usually held in trust, and your lawyer should confirm the arrangement before the cooling-off period expires.

The practical planning point: map the deposit dates against your own cash flow before you sign, not after. A schedule that looks manageable in a sales centre can collide with a tuition bill or a renovation eighteen months later.

When your unit is finished but the building is not yet registered as a condominium corporation, you take interim occupancy. You can move in and live there. You do not own it yet, your mortgage has not started, and you are not building equity.

During this period you pay the builder a monthly occupancy fee, sometimes called phantom rent. It generally covers interest on the unpaid balance of the purchase price, an estimate of the property taxes and an estimate of the common expenses. It is money you do not get back and it does not reduce what you owe.

Occupancy periods can run for a few months or considerably longer, and the length is not something you control. For an investor this is a real cost to model, because in most cases you can only rent the unit out during occupancy if the builder permits it in the agreement.

Ask for the builder's estimated occupancy period before you sign, and then budget as though it will be longer.

Delays. Occupancy and closing dates move, sometimes by years. Builders are permitted to extend under defined conditions, and your agreement sets out how. If you are selling an existing home to fund this purchase, a delay is not an inconvenience, it is a housing problem.

Cancellation. Projects do get cancelled. Deposits are protected within warranty limits, but you get your money back years later with the market having moved, which is a real loss even when the dollars come back.

The appraisal gap. Your lender appraises the unit at closing, not at signing. If values have softened over the intervening years, the appraisal can come in below your purchase price and you must cover the difference in cash. This is the risk that hurts buyers most, and it is the one least often discussed in a sales centre.

Getting out is difficult. Assignment, meaning selling your contract before closing, is only possible if your agreement permits it, and builders typically charge a fee and impose conditions. Do not assume you can walk away.

1. What is the full deposit schedule, with dates and amounts?

2. Are development charges and levies capped, and at what figure?

3. What is the estimated occupancy date, and the estimated final closing date?

4. How is the occupancy fee calculated?

5. Does the agreement permit assignment, and on what terms?

6. Can I lease the unit during interim occupancy?

7. Is the quoted price net of the HST rebate, and does my situation qualify?

8. What has this builder delivered before, and were those projects on time?