Ontario condo buyers may have an overlooked way out: Court orders builder to return $121K deposit over one missing document

The outcome in this case turned on the builder’s failure to prove it had delivered Ontario’s Residential Condominium Buyers’ Guide.

“The purchase agreement does not become firm and binding on the buyer until both the Guide and current disclosure statement have been delivered and the 10-day cooling period has passed,” the Condominium Authority of Ontario (CAO) told Money.ca.

Why the court ordered the deposit returned

In the case of DiCenzo (Linden Park) Holdings Inc. v. Sadeghyar, the facts show the buyer agreed to purchase a pre-construction condominium in Hamilton for just over $1 million in March 2022. He paid a $121,098 deposit but couldn’t obtain financing when the unit was ready to close in February 2024.

The builder resold the property for $699,900 and sought to keep the deposit and recover additional damages for its resale loss and carrying costs. The buyer argued that the agreement wasn’t binding because the builder had failed to provide the required guide under Ontario’s Condominium Act, 1998.

The builder pointed to an electronic acknowledgment signed by the buyer confirming receipt of the document. However, it couldn’t produce evidence that the guide had actually been delivered.

In its March 2026 decision, the court found the builder had not established that the guide was provided. The agreement was therefore not binding on the buyer, and the court ordered the return of his deposit with interest. The builder’s claim was dismissed, and the buyer was awarded $31,000 in legal costs.

What does this mean for other pre-construction buyers?

Ontario law requires developers to provide buyers with the Residential Condominium Buyers’ Guide and the most recent disclosure statement. The guide explains the pre-construction buying process, including purchasers’ rights and potential risks.

Buyers have 10 days to cancel a purchase agreement for any reason, without penalty.

According to the CAO, that period begins when the buyer receives the last of three documents: the guide, the most recent disclosure statement and the purchase agreement signed by both the buyer and developer. If the buyer cancels within the period, the developer must promptly refund the deposit, plus any applicable interest.

The Sadeghyar decision addressed what happens when the builder cannot establish that the required guide was delivered, even if the buyer signed an acknowledgment of receipt.

That detail is crucial as more pre-construction buyers face financing shortfalls and falling condo values. In a CBC News report on the wider market pressures, mortgage broker Ron Butler warned that “the developer will chase you through the courts” when buyers fail to honour a valid contract.

The ruling doesn’t mean buyers can automatically recover deposits because financing falls through or property values decline. Its application depends on the circumstances, including whether the developer met its statutory disclosure obligations.

What should buyers do if they can’t close?

The CAO recommends keeping a written record of the documents received, including the guide, disclosure statement and signed purchase agreement. Buyers should save emails, attachments, portal notifications and delivery records, and check that any acknowledgment of receipt is accurate before signing it.