Pre-construction Deposits, Explained Plainly

A pre-construction deposit is not one payment. It is a schedule: something on signing, more at 30, 90 and 180 days, and a balance on occupancy. Each builder writes the schedule differently, and the total usually lands between 15 and 20 per cent of the purchase price.

In Ontario, deposits on new freehold homes and condominiums are held in trust and covered by Tarion up to a limit. Read the limit against your own numbers: on a larger purchase a portion of the deposit sits above it.

Before you sign, ask three things: whether the deposit earns interest, whether you can assign the agreement before closing, and what happens to the schedule if the occupancy date moves.