1 in 5 homebuilders are nixing projects amid high rates. Here are your rights

More Canadian developers are slowing their pace of building or nixing projects completely. Here's what you need to know about your rights if you bought a pre-sale home.

Many Canadian homebuyers waiting patiently for construction to finish on their pre-sale unit are being met with cancellation notices from developers. The building environment is souring — leaving some unhappy customers scrounging to get their deposit, or more, in compensation.

Real estate lawyers in some of Canada’s busiest housing markets who spoke to Global News say you might not get much more than you put into a pre-build, depending on what your contract says.

The Canadian Home Builders’ Association (CHBA) said in a report released last week that high construction costs and rising interest rates are hurting developer confidence in the market. Two out of three builders tell CHBA that they’re building fewer units, while 22 per cent of developers have fully cancelled projects in recent months.

Aman Bindra of KSW Lawyers in B.C., tells Global News that buyers eyeing the pre-construction market are taking a big chance about what state the industry will be when construction completes.

“When you’re buying a pre-sale, you’re really speculating on what the market’s going to be like three, four or five years down the road, maybe more,” he says. “You might make a lot of money, but you take a lot of risk. And sometimes things don’t go your way, as we’re seeing right now with developers canceling projects.”

Here’s what to know if a developer has told you your dream condo or detached home won’t be ready on time — if at all.

The rights of buyers are similar in many jurisdictions, but because the real estate market is regulated provincially, a buyer in Vancouver might have a different legal standing from someone buying in Toronto.

Bob Aaron, a Toronto-based real estate lawyer, says the obligations a developer has to a buyer are outlined in the Tarion addendum, a compulsory attachment for a purchase agreement in Ontario.