Ontario's Unfulfilled Promise: The Delayed 10-Day Cooling-Off Period for New Home Buyers
In May 2025, the Ontario government announced a significant consumer protection measure that had been anticipated for years: a mandatory 10-day cooling-off period for new freehold home buyers. This policy would allow purchasers who own both the house and land to review their pre-construction agreements thoroughly before committing. According to the ministry, this provision aims to empower consumers to "review their agreement and make a more informed and confident purchasing decision."
A Welcome Step Forward for Fairness
This initiative was widely seen as a progressive move toward balance and equity in the real estate market. The cooling-off period would grant buyers valuable time to arrange financing, consult with legal advisors or family members, and verify the builder's licensing and project enrolment status. A well-understood and mutually agreed-upon contract benefits all parties involved and can help prevent expensive legal disputes in the future.
Currently, condo and timeshare buyers already enjoy a mandatory 10-day cooling-off period, but freehold buyers have never had such protections. This legislative gap has persisted for years, raising questions about why it hasn't been addressed sooner. The absence of powerful consumer protection lobby groups in Ontario, unlike provinces with Consumer Watchdog organizations, makes it challenging for consumer perspectives to reach policymakers effectively.
The Power Imbalance Between Consumers and Industry
In contrast, building industry lobby groups possess substantial legal and financial resources, along with strong political connections, ensuring their interests are heard by government officials. This disparity often leaves consumers and a few dedicated, unpaid advocates to champion their own causes, resulting in legislation that frequently favors the building industry.
The author's interest in this issue dates back to 2019, when discussions with then-Minister Lisa Thompson highlighted the prolonged inaction. Six years later, legislation was finally passed to mandate the cooling-off period, only to be abruptly postponed via a rushed email to stakeholders in late December. The law remains unproclaimed until at least 2027, rendering it legally ineffective. If it sits unproclaimed for a decade, it will be withdrawn entirely.
Why the Cooling-Off Period is Essential
The cooling-off period is crucial for leveling the playing field between developers, who draft these contracts with extensive legal and financial backing, and individual consumers, who often encounter such agreements for the first time. Freehold contracts can exceed 40 pages of fine print, accompanied by a complex, confusing, and mandatory 12-page addendum. Fully comprehending one's rights and obligations requires adequate time.
Signing a complex contract without expert guidance can have life-altering consequences. For instance, in 2018, some buyers attended a high-pressure sales event hosted by a prominent developer. They found an affordable home near work, schools, and transit, but faced pressure to sign immediately due to limited supply. A side agreement presented to them stated the contract was firm and binding, stripping them of the opportunity to review terms or seek independent advice.
In another case, first-time buyers were urged to sign a freehold contract for townhomes, which included a clause prohibiting them from discussing any future disputes with the builder. Violating this clause could result in contract cancellation, forfeited deposits, and liability for builder damages. Purchasers deserve the right to seek independent counsel on such restrictive terms.
Government's Sudden Reversal and Industry Opposition
The government's last-minute cancellation of this long-awaited consumer protection measure was attributed to "market conditions," a reason many find unconvincing. In a market with scarce new home buyers, boosting consumer confidence could benefit all stakeholders. Media reports of missing deposits and cancelled projects, particularly involving freehold homes, have made consumers hesitant to re-enter the market.
Builder lobby groups oppose the 10-day cooling-off period, arguing that consumers might "tie up inventory" for two weekends or act "frivolously" by holding multiple properties, potentially hindering housing construction goals. However, a two-week delay seems minor compared to the prospect of spending hundreds of thousands in legal fees and years resolving disputes.
Additional Consumer Protection Measures Needed
Another overdue reform is mandating that freehold deposits be held in lawyers' trust accounts, as is already required for condos. The reasons for this omission remain unclear. Additionally, a standardized, simplified new home contract written in plain language—similar to those used for resale homes—is high on the list for fostering consumer confidence, yet policymakers have consistently avoided this change.
Much work remains to create a level playing field for new home buyers. Starting with adequate time to understand contract terms and prepare for this major life step is essential. Catering to builder lobby interests won't foster a stable and thriving new homes market. Consumers drive this market, and government attention to their lack of confidence in the purchase process has been insufficient.
— Barbara Captijn is a consumer advocate. Follow her @ReformTarion.
