Can you back out of an accepted offer in Ontario? (2026)

Usually not without consequences. Once you and the seller have both signed, an agreement to buy a resale home in Ontario is a binding contract, and there is no cooling-off period that lets you change your mind. The ways out are narrow: a condition written into your offer that isn't met, the seller agreeing to release you, or, for a new condo bought from the developer, the 10-day right to cancel in the Condominium Act.

If none of those applies and you walk away anyway, you have breached the contract. RECO, Ontario's real estate regulator, says that can bring serious legal and financial consequences. Here is how each route works.

NoneCooling-off period on a resale homeThe agreement binds you once it is accepted

10 daysTo cancel a new condo bought from the developerCondominium Act, 1998, s. 73

In writingHow a new-condo buyer must cancelThe developer or its lawyer must receive the notice within the 10 days

Jan. 1, 2028Planned start of a cooling-off period for new freehold homesNot in force yet (Tarion; O. Reg. 289/26)

Both signaturesNeeded on a mutual release before a brokerage pays out a depositOr a court order

2 yearsA brokerage can hold a disputed depositThen it goes to RECO, still in trust

General information. Your own agreement decides what applies to you.

Source: Condominium Act, 1998; Ontario Regulation 289/26; Tarion; Real Estate Council of Ontario; Condominium Authority of Ontario; Ontario Real Estate Association.

Why an accepted offer is binding

An offer becomes an agreement of purchase and sale when the other side accepts it. From then on both of you are bound by what it says: the price, the closing date, the deposit, and any conditions.

RECO's guidance to agents is blunt. A buyer's agent should tell clients that entering into an agreement is binding, and that not following through, for example by not delivering the deposit, does not cancel the deal. It is a breach of the agreement. The seller could end the deal and take legal action, and RECO notes that many civil cases have ended in significant penalties for people who tried to walk away from a signed deal.

The 10-day cooling-off period people have heard about is real, but it comes from the Condominium Act and covers new and pre-construction condos bought from the developer. It does not apply to a resale house or a resale condo.

Way out 1: a condition in your offer

A conditional offer says the deal goes ahead only if something happens by a set date. Typical ones are financing, a home inspection and the sale of the buyer's current home. RECO describes the home inspection as one of the most common conditions in an offer. For a condo, a condition can also give you time to review the status certificate.

If the condition isn't satisfied by its deadline, the clause normally says the agreement ends and the deposit comes back to you. Three cautions:

• You have to try. The Ontario Real Estate Association (OREA), which publishes the standard forms, notes that courts expect a buyer to use reasonable efforts, in good faith, to satisfy a condition. A financing condition is not a free pass to cancel because you found a house you like more.
• Deadlines matter. What happens when a deadline passes depends on the wording of your clause. Read it with your agent before the date, not after.
• The deposit still needs paperwork. A brokerage holding your deposit pays it out only with a mutual release signed by you and the seller, or a court order, whatever the condition clause says.

On timing for a resale condo: a condo corporation must provide it within 10 days of a request and payment, and can charge up to $100.

Way out 2: the seller agrees to let you go

You can always ask. If the seller agrees, both of you sign a mutual release. OREA's standard release confirms the deal is terminated, frees both sides from their obligations and says who gets the deposit.

The seller doesn't have to agree, and the release has to settle who gets the deposit, which is where the negotiating happens. Have a real estate lawyer negotiate and review it. Don't rely on a verbal "that's fine".

Way out 3: the 10-day right on a new condo

If you buy a new or pre-construction condo from the developer, the Condominium Act gives you 10 days to cancel, for any reason or none.

• When the 10 days start: on the latest of three dates: when you receive the disclosure statement, when you receive Ontario's condo buyers' guide, and when you receive a copy of the agreement signed by both you and the developer.
• How to cancel: you or your lawyer give written notice to the developer or its lawyer. They must receive it within the 10 days, so don't leave it to the last evening.
• Your money: the developer must promptly refund everything you paid toward the price, without penalty or charge, with interest at the rate set by regulation.

The Condominium Authority of Ontario adds that the agreement isn't binding until you have both the disclosure statement and the buyers' guide. You may also be able to cancel later if the developer makes a material change to the disclosure statement, or within 30 days if the builder misses the outside occupancy date. Use the 10 days to have a lawyer read the documents.

New houses from a builder: a cooling-off period is coming, not here

Ontario has passed rules for a cooling-off period on new freehold homes, but they are not in force. Tarion says the province has moved the start date to January 1, 2028, and the regulation that sets out the new buyer information sheets is marked on e-Laws as not yet in force until that day. If you're buying a new freehold home before then, your ways out are the ones written in your purchase agreement and its addendum. Ask a lawyer to go through them before you sign.

If you walk away from a firm deal

Say you have a firm deal at $900,000 on a home in Mississauga and paid a $45,000 deposit. These numbers are only an illustration. A week later you want out.

• Your $45,000 stays in trust. The seller is unlikely to sign a release that sends it back to you. Without both signatures or a court order, the brokerage can't pay it to anyone. If nothing is settled after two years, the brokerage transfers it to RECO, which keeps holding it in trust.
• The seller can sue. RECO notes that many buyers who tried to walk away from a signed deal ended up with significant penalties in court.
• You'll need a lawyer either way. Entitlement to the deposit and any further claim are legal questions that agents and brokerages can't decide.

The contract binds the seller too. A seller who refuses to close on a firm deal is also in breach, and OREA notes there can be legal consequences for a seller who resells while still bound to the first agreement.

Our guide to the deposit on a house in Ontario covers how deposits are held and protected.

What this means for GTA buyers

• Decide before you sign. See the home properly first. Use the home viewing checklist, go to open houses in the area, and book a second showing if you're unsure.
• Keep the conditions you need. If your financing isn't fully approved or you haven't inspected the home, a condition is your protection. In a competing-offer situation, weigh the risk of a firm offer before you make one.
• Know your numbers first. Run the payment in the mortgage calculator and talk to your lender before you offer, so the financing condition is a backstop and not a hope.
• Have a lawyer read it. For a new condo, do it inside the 10 days. For a resale home, before you sign or during the conditional period.
• Get regrets to your agent and lawyer fast. If a condition is still open, the date matters. If you'd like advice before you offer, you can buy with an agent through Dibz.

FAQ

Is there a cooling-off period when you buy a house in Ontario?

Not for a resale home. The 10-day cooling-off period in the Condominium Act applies to new and pre-construction condos bought from the developer. A cooling-off period for new freehold homes is planned for January 1, 2028 and is not in force yet.

Can I back out if my offer was conditional?

Only through the condition itself. If, after a real effort, the financing isn't approved or the inspection isn't satisfactory by the deadline, the clause normally ends the deal and returns your deposit. You'll still sign a mutual release so the brokerage can pay the deposit out.

Do I lose my deposit if I back out of a firm offer?

You should expect a fight over it. The brokerage holding the deposit can release it only with a mutual release signed by both sides or a court order, and the seller can also sue you for breaching the agreement.

Can a seller back out of an accepted offer?

The agreement binds the seller in the same way. A seller who won't close without a right under the agreement is in breach, and the buyer should get legal advice on their options.

How do I cancel a new condo purchase within the 10 days?

Give written notice of rescission to the developer or its lawyer, yourself or through your lawyer. The notice must be received within 10 days of the latest of the dates you received the disclosure statement, the condo buyers' guide and the fully signed agreement.

Sources

• Condominium Act, 1998: sections 73 (rescission of agreement) and 74 (material changes), e-Laws currency date November 6, 2026
• Ontario Regulation 289/26: Addenda and information sheets for purchase agreements (not in force until January 1, 2028)
• Tarion: Important updates for vendors and builders (cooling-off period for new freehold homes moved to January 1, 2028)
• Condominium Authority of Ontario: Pre-construction condos and resale condos
• RECO: How the CAO helps real estate agents and condo buyers (the cooling-off period)
• RECO: Deposits play an important role in a real estate transaction (agreements are binding)
• RECO: Home inspections
• OREA: The fate of the deposit if the deal falls through (conditions, mutual releases and disputed deposits)

This article is general information, not legal, tax or financial advice. Rules change; confirm the details with your lawyer, lender or the official source.