COOLING OFF PERIOD for NEW FREEHOLD HOMES
By OREA, Ontario Real Estate Association
Cooling-Off Period for New Freehold Homes Will Improve Balance in Pre-Construction Buying and Selling Process
“Buying a home is the largest, most complex financial transaction most Ontarians will ever make. Every day, consumers put their trust in real estate professionals to help guide them through the buying and selling process.
The Ontario Real Estate Association (OREA) led the charge to raise the bar and better protect consumers, culminating with the Trust in Real Estate Services Act(TRESA). TRESA is set to reform major aspects of the resale buying and selling process, including increased transparency, better disclosures, stronger consumer protections, new business opportunities, and tougher penalties for agents who break the rules. But these same protections do not exist for new construction freehold homes, which are often sold by developers who are not beholden to the same Code of Ethics and regulations as licensed real estate agents are.
That’s why OREA supports the Ford Government’s announcement to launch consultations on increased consumer protections for new freehold buyers, including a “cooling-off period”, which would help level the playing field between new home buyers and well-resourced corporate developers. This extra layer of consumer protection already exists on pre-construction condominiums, and should be extended to new freeholds in order to better protect Ontario families who are negotiating with large, corporate developers and their team of lawyers writing complex agreements that often include legal complexities that may lead to higher costs and timelines to buyers.
The process of purchasing a new build is vastly different from a resale home, as the purchase agreement typically occurs before shovels are even in the ground. A buyer opting out during a cooling off period for a new build will have minimal impact on the developer. A resale home represents someone’s life savings, and a buyer pulling out could force a retiree or a young family to relist, costing them time and money.
The real issue is the lack of housing supply in the market. If the market was more balanced, there would be less pressure on both buyers and sellers. The Government of Ontario must continue to build on the four pro-housing pieces of legislation in order to increase housing starts and add sorely needed new supply across the province. Bold action and championing pro-housing policy is the key to solving the housing affordability crisis in Ontario.”
- Tim Hudak, CEO of the Ontario Real Estate Association
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