Can a Builder Keep Your Deposit? Ontario Court Says Not Always

You signed the Agreement of Purchase and Sale.

You paid the deposit.

The market changed.

Then the builder claimed you had no choice but to close or lose everything. A recent Ontario court decision suggests the situation may not be that simple.

A recent Ontario court decision found that a builder could not enforce a condominium purchase agreement after failing to satisfy mandatory disclosure requirements.

In DiCenzo (Linden Park) Holdings Inc. v. Sadeghyar, 2026 ONSC 1566, the Ontario Superior Court considered whether a builder could keep a purchaser’s deposit and claim damages after a failed pre-construction condominium closing. The decision is important for Ontario buyers because it shows that a signed agreement is not always the end of the analysis.

This does not mean every buyer can recover a deposit. Every case depends on the Agreement of Purchase and Sale, the disclosure package, closing notices, correspondence, financing evidence, and the applicable statutory requirements. But it does show why buyers should get legal advice before assuming the builder has all the power.

The Builder Wanted to Keep the Deposit

The dispute involved a pre-construction condominium unit in Hamilton, Ontario. The purchaser entered into an Agreement of Purchase and Sale in 2022 for a condominium unit valued at more than $1 million and paid a deposit of approximately $121,098.

The transaction did not close. The builder later resold the unit and sought to retain the purchaser’s deposit while also claiming damages arising from the resale. In other words, the builder was not only resisting the return of the deposit, it was also pursuing the buyer for additional money.

The purchaser defended the claim by arguing that the agreement was not legally binding because the builder had not provided a mandatory condominium disclosure document: the Residential Condominium Buyer’s Guide.

The One Missing Document That Changed Everything

For many buyers, the phrase “disclosure package” sounds technical. In a pre-construction condo dispute Ontario buyers may not realize that disclosure can determine whether the transaction became enforceable in the first place.

Under the Condominium Act Ontario framework, developers must provide specific disclosure documents to purchasers. These materials are intended to help buyers understand the condominium project, the financial structure, the risks, the timelines, and the rights that apply before the buyer is treated as fully bound.

In this case, the purchaser argued that the builder failed to provide disclosure because the Residential Condominium Buyer’s Guide had not been delivered. The court found that the builder had not satisfied the mandatory disclosure requirements. Although there was an acknowledgment referring to receipt of the guide, the issue was whether the guide itself had actually been provided.

That distinction mattered. A signed acknowledgment may be important evidence, but it does not automatically answer every question. Where the issue is whether a mandatory document was actually delivered, the builder must be able to prove delivery.

Why the Condominium Buyer’s Guide Matters

The Residential Condominium Buyer’s Guide is not a formality. It is part of the consumer protection framework for condominium purchasers. Its purpose is to help buyers understand important issues before they are legally committed to the transaction.

The court confirmed several important points: delivery of required condominium disclosure documents is mandatory; the statutory cooling-off period does not begin until the required documents are delivered; and a purchaser’s experience or sophistication does not remove the builder’s obligation to comply with the statute.

The result was significant. The purchaser was entitled to rescind the transaction and recover the deposit with interest. The builder’s claims for forfeiture of the deposit and damages were dismissed.

Why This Matters to Ontario Pre-Construction Condo Buyers

Many buyers assume that once they sign the Agreement of Purchase and Sale, the builder can automatically keep the deposit if closing fails. That assumption can be wrong.

A builder keep deposit Ontario dispute often turns on more than one question. The lawyer may need to examine whether the disclosure package was properly delivered, whether notices were valid, whether deadlines were triggered, whether amendments were properly handled, and whether the builder complied with the Condominium Act and the agreement itself.

For a buyer seeking a condo deposit return Ontario remedy, the first step is not to assume the result. The first step is to preserve the evidence and have the transaction reviewed carefully.

What Buyers Should Save Before Speaking to a Lawyer

Before an Ontario builder dispute lawyer can give practical advice, the lawyer usually needs to review the full transaction history, not just the front page of the contract. Buyers should preserve and organize the following materials:

• Agreement of Purchase and Sale, including all schedules and amendments;

• Disclosure Statement and any revised disclosure materials;

• Residential Condominium Buyer’s Guide, if one was provided;

• deposit receipts, wire records, bank drafts, and trust records;

• mortgage approvals, mortgage refusals, financing correspondence, and appraisal issues;

• builder emails, letters, closing notices, occupancy notices, and default notices;

• communications with real estate agents, mortgage brokers, and the builder’s sales office;

• text messages, attachments, DocuSign records, and email delivery records.

In an Agreement of Purchase and Sale dispute, a single missing attachment, email, notice, or disclosure document can become central to the outcome.

What the Builder Must Prove

When a builder wants to enforce the agreement, keep the deposit, or claim additional damages, several issues may need to be proven. Depending on the facts, those issues may include:

• that all mandatory disclosure documents were properly delivered;

• that delivery can be proven through reliable records;

• that the cooling-off period was properly triggered and expired;

• that notices were served correctly and on time;

• that the builder complied with the Condominium Act Ontario requirements and the contract;

• that the buyer was actually in default under an enforceable agreement;

• and that the builder has properly proven any claimed damages.

This is why these cases are often evidence-driven. The fact that a contract was signed may be important, but it may not answer whether the contract became binding and enforceable under the statutory scheme.

Common Mistakes That Can Hurt Your Case

Pre-construction closing dispute files can move quickly. Buyers can unintentionally weaken their position by making avoidable mistakes, including:

• waiting too long to obtain legal advice;

• deleting emails, attachments, text messages, or DocuSign records;

• assuming the builder can automatically keep the deposit;

• failing to preserve mortgage approvals, refusals, appraisal records, and deposit records;

• responding emotionally to the builder instead of preserving a clear written record;

• focusing only on financing problems while overlooking disclosure, notice, and statutory issues.

A builder failed to provide disclosure issue may not be obvious at first glance. It often requires a careful document-by-document review.

How Bhardwaj Law Reviews Builder Disputes

Bhardwaj Law Professional Corporation reviews builder disputes by examining the Agreement of Purchase and Sale, statutory disclosure documents, builder notices, financing evidence, deposit records, closing correspondence, and communications with the builder or sales representatives.

The goal is to assess the legal options based on the actual documents and evidence, not assumptions. In real estate litigation Ontario disputes, the details matter.

Final Takeaway

DiCenzo v. Sadeghyar confirms an important point for Ontario condominium buyers: a signed agreement is not always the same as an enforceable agreement. Builders must satisfy mandatory disclosure obligations. If they do not, the consequences can be significant.

If you are involved in a dispute with a builder, speak to a lawyer before assuming your deposit is lost.

Bhardwaj Law Professional Corporation can review your Agreement of Purchase and Sale, disclosure documents, notices, and correspondence to assess your legal options.

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