Building a new home

What to know when building a new home.


After considering the types of homes available, budget, location and other important factors, some people choose to construct a brand-new home. Working with a builder to construct a new home takes time, but you often get to customize such things as layout, finishing, colours and fixtures. It is beneficial to make sure you and your builder have a clear agreement in writing and that you have some general understandings about the process before construction begins.

Understand your contract

The written contract between you and the builder will help lay out details of the new home, expectations for the construction process, delivery and payment.

A clear understanding of the contract can help home buyers and builders avoid disputes during and after construction, which could then have to be resolved through mediation or the courts. You may choose to hire a lawyer to provide a detailed review of the contract and raise any areas for consideration or potential risks, which can help you decide whether you are comfortable with the contract prior to signing.

Details to consider in the contract

Your contract should include detailed information about the home to be built, for example:

  • warranty information
  • lot dimensions
  • model of home
  • orientation on the lot
  • site plans
  • drawings
  • any extras or upgrades, including appliances

Break down the cost to build

The price of the overall cost to build a home can be broken down to allow you to see what specifically you are paying for, such as:

  • all that is included in the base price of the home
  • the cost of any upgrades
  • warranty
  • deposit insurance
  • landscaping

It is also good to understand what happens if you go over or under budget during construction.

Choosing how to pay

It is good practice to clearly outline when and how you will pay the:

  • deposits
  • construction advances
  • amount on closing

Conditions for payment (for example, sale of current home, lawyer review) and approvals that must be met prior to payment can also be included.

The builder will issue receipts for any deposits paid and should have a clear refund policy. When determining a payment schedule, you should consider what happens if the builder is late on a deadline, or you are late with a payment.

Purchasing a condominium

Many people decide to purchase a condominium before it is constructed to take advantage of lower pricing or when there is little choice available on the market. Large projects like multi-unit condominium buildings are complex and require significantly more professional expertise than a single-family home. Consider the following before purchasing a condominium:

  • the developer’s background, experience and performance
  • the size, scope and schedule of the project or phases of the project
  • condominium fees, what costs are fixed and what changes can be made during construction

Condominium developers require a developer licence. The builder registry provides information about developers such as their licence status, associated companies and projects built since 2014.

Many condominium buyers pay an expert to review the technical documents associated with the condominium, such as:

  • purchase agreement
  • condominium plan
  • bylaws
  • management agreement
  • phased development disclosure
  • home warranty contract

Understand the construction process

The construction of a new home can be complex, involving different trades, professionals, contractors, and the planning office of your local community.

Influences such as weather, supply chain, contractor availability, and material pricing can impact construction scheduling and the product that is built. It is your builder’s responsibility to manage these elements effectively to ensure you get the home you are paying for. The better you understand the construction process, the better you will be able to manage your risks, adjust your expectations, and end up with a satisfying result.

Your local municipality

Each municipality has a system for permitting and inspecting new construction. Permits are issued to licensed builders, credentialed trades, and property owners prior to completing work on a project. Inspections are often scheduled at major check points to view the work and determine whether it appears to follow provincial codes. A final inspection is conducted when the home is completed, and an occupancy permit is typically issued if the home appears safe to live in.

Trades and other professionals

Various trades people and contractors, such as carpenters, plumbers, and electricians, construct different parts of a home according to provincial codes and standards. Designated trades are regulated to help ensure work within the trade has been performed by competent and qualified individuals. Architects and engineers also ensure homes, especially multi-unit buildings, are designed and built safely and according to codes.

Insurance and home warranty

Unexpected things can happen during construction, such as your builder filing for bankruptcy. Deposit protection insurance can help protect your payments and home completion insurance can help ensure your home will be completed.

Builders must provide home warranty coverage on all new homes, including condominiums, manufactured homes, and recreational properties. Warranty providers may also inspect your home during construction.

In rare cases, a home warranty contract may be terminated prior to your home being completed, for example, if you or your builder cancels your contract. If your warranty has been been terminated, contact the Residential Protection Program at [email protected] for options to continue construction on the home.

Building your own home

If you choose to build your own home, you are responsible for and oversee all the work from the beginning of the project to the end. This includes permitting, site supervision, and inspections. If you build without warranty but decide to sell within the protection period, you will be required to obtain home warranty coverage before selling the home.



Connect with the Residential Protection Program:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-644-1010 (within Canada and United States)
Toll free: 1-866-421-6929 (within Canada)
Email: [email protected]