Buying a pre-construction condo in Toronto is not a single transaction with a closing date a few weeks out. It is a multi-year process with distinct financial and legal stages, each carrying its own obligations. For buyers unfamiliar with the sequence, the gap between signing the purchase agreement and receiving the keys can feel opaque.
Here is what the process actually looks like, stage by stage.
After signing the Agreement of Purchase and Sale (APS), the buyer enters a 10-day cooling-off period, during which the agreement can be cancelled without penalty. This is the window to have a real estate lawyer review the contract.
Once the cooling-off period passes, deposits come due. Developers typically structure them as 15% to 20% of the purchase price spread across several milestones over the first 12 to 24 months. Buying a pre-construction condo means managing that deposit schedule well before a mortgage payment ever begins. A common structure on a $650,000 unit might look like $5,000 at signing, then four installments of 5% each at 30, 90, 180, and 365 days. The key point is that no mortgage payment begins until final closing, which may be three to five years away. During the construction period, the buyer's financial obligation is limited to the deposit schedule.
Once deposits are complete, the buyer waits for construction to finish. This phase offers little to do beyond monitoring the developer's progress updates. Delays are common. A project originally estimated to complete in four years may take five. Buyers should plan for this variability and avoid making financial commitments that depend on a specific completion date.
Approximately one to two weeks before the builder hands over the keys, the buyer conducts a Pre-Delivery Inspection (PDI). This is a formal walkthrough of the finished unit with a builder representative present.
The purpose is to document every deficiency: scratched countertops, misaligned doors, incomplete caulking, damaged flooring, missing fixtures. Each item is recorded on the official PDI form, and the builder is obligated to repair these issues under Ontario's Tarion warranty program. That warranty covers workmanship and materials for one year, building envelope and mechanical systems for two years, and major structural defects for seven years.
An Ontario Auditor General report found that builders failed to honor their warranties in approximately two-thirds of dispute decisions reviewed. This is why documenting every issue during the PDI matters. The form is the buyer's primary evidence if warranty claims arise later.
After the PDI, the buyer receives the keys and can move in. But in Ontario, there is a gap between physical possession and legal ownership. This phase is called interim occupancy.
During interim occupancy, the condominium corporation has not yet registered with the Land Registry Office, so the buyer does not hold title. Instead, the buyer pays the developer a monthly fee covering estimated property taxes, projected common expenses, and interest on the unpaid purchase balance. Under the Ontario Condominium Act, Section 80(4), developers cannot profit from these charges.
This period can last anywhere from two to twelve months. The fees do not build equity and do not count toward the mortgage. Buyers should budget for this phase as a carrying cost.
Once the condominium registers, the buyer reaches final closing. Title transfers, the mortgage activates, and interim occupancy fees stop.
This is also when closing costs come due. In Toronto, buyers pay both provincial and municipal land transfer taxes. Development charges passed through by the builder, legal fees (typically $1,500 to $2,500), utility connection fees, Tarion enrollment fees, and a reserve fund contribution (usually two months of condo fees) can add 5% to 10% to the total purchase price. On a $650,000 unit, that can mean $32,500 to $65,000 in costs beyond the purchase price itself.
First-time buyers who budgeted only for the deposit schedule are frequently caught off guard at this stage. Working with a lawyer who specializes in pre-construction transactions, ideally from the cooling-off period onward, helps prevent that surprise.
With title secured, the owner decides whether to live in the unit or rent it out. For investors, tenant placement becomes the immediate priority. The quality of that placement, specifically the rigor of tenant screening, determines whether the condo generates consistent rental income or becomes a source of ongoing friction.
After years of deposits, inspections, and closing costs, the last decision is who manages the unit. That choice determines whether all of that patience pays off. A management team that handles screening, maintenance, and compliance as a single integrated system protects the investment at the point where it finally starts generating income. For buyers who purchased pre-construction specifically to rent, this is where the return either materializes or unravels.
Supriyo Khan
Supriyo Khan
Supriyo Khan
Supriyo Khan
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