Free practice questions · Course 3
New Construction Practice Questions
Builder agreements, Tarion warranty, and deposits in new home purchases. Below are 5 free sample questions from our 30-question New Construction bank. Each comes with the correct answer and a full explanation.
Question 1 of 5
At final closing of a new condo unit, ownership transfers to the buyer when:
- AThe buyer takes interim occupancy
- BThe deed is registered after the condominium corporation has been registered
- CThe buyer signs the disclosure statement
- DThe buyer pays interim occupancy fees in full
Why B is correct
Final closing happens after the condominium corporation has been registered (giving each unit a separate PIN). Buyers transition from paying interim occupancy fees to becoming registered owners with a mortgage and common expense obligations.
Question 2 of 5
Priya Singh's new freehold home was scheduled for a firm closing date of June 1, but the builder delayed closing to August 15 (75 days). She had to live in temporary housing. What is the maximum daily compensation she may claim?
- A$50/day
- B$100/day
- C$150/day
- D$250/day
Why C is correct
Compensation is up to $150/day for documented living expenses (such as alternative accommodations, moving, storage, restaurant meals) and is capped at $7,500. Buyers must keep receipts and submit the claim through Tarion's process.
Question 3 of 5
Devon Williams gives notice to rescind his new condo purchase on day 9 of the cooling-off period. What is the builder's obligation regarding the deposit?
- AThe builder may keep the deposit as administrative fee
- BThe builder must return the deposit with interest within 10 days
- CThe builder must return the deposit minus 5% commission
- DThe deposit is forfeited because the cooling-off period closes on day 10
Why B is correct
When a buyer rescinds within the 10-day cooling-off period under the Condominium Act, 1998, the vendor must refund the deposit plus interest within 10 days. This protects buyers who change their minds after receiving the disclosure statement.
Question 4 of 5
Mei Chen purchased a new home with a tentative closing date that was set six months ago. The builder has now provided a firm closing date. How many days advance written notice must the builder give to set a firm closing date under the Tarion Addendum (after the cooling-off-style notice provisions)?
- A30 days
- B60 days
- C90 days
- D120 days
Why C is correct
Under the Tarion Addendum, when a builder converts a tentative closing date to a firm closing date, at least 90 days written notice is required to the buyer. Without proper notice, the buyer may have the right to terminate or claim compensation.
Question 5 of 5
What is the common element warranty period under Tarion for a newly registered condominium?
- A1 year from each unit's possession date
- B1 year from registration of the condominium corporation
- C2 years from registration of the condominium corporation
- D7 years from registration of the condominium corporation
Why B is correct
For condo common elements, warranties begin on the date of registration of the condominium corporation: 1 year for materials/workmanship, 2 years for water penetration and OBC health/safety, and 7 years for major structural defects.
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