Before You Sign: Understanding a New Home Construction Contract

The pricing model changes who carries certain risks and how extra costs are approved. Neither option removes the need for a detailed scope, complete pricing assumptions and clear terms.

A contract price is only useful if you can identify what it covers. The attachments should include the legal lot description, floor plans, elevations, site or plot plan, major specifications and agreed upgrades. Every page should refer to the correct home design and current revision.

Look closely at exclusions such as landscaping, deck, window coverings, appliances, driveway, air conditioning, basement development, utility fees or site-related work. Not every builder includes the same items. Clarify whether advertised showhome features are standard or optional.

Confirm whether the contract addresses permits, grading, surveys, warranty enrolment and any site or soil conditions that may affect price. Taxes—including GST—must be clearly identified as included or additional, with any rebate assumptions stated.

This annotated sample is a learning tool, not a legal contract. Real agreements include definitions, schedules and many other clauses. Use the ten callouts as a checklist when reviewing a proposed document with your builder or lawyer.

For example, a $7,000 countertop allowance is not a promise that every quartz option fits the budget. Slab choice, fabrication, edge profile, sinks, backsplash and labour all influence the final installed price.

Buyers naturally refine plans during construction. But changing a staircase, moving windows, enlarging an island or adding pot lights can involve design revisions, additional materials and trade coordination.

A written change order should describe the requested work, the amount added or credited, GST treatment if applicable, and the effect on completion dates. Both parties should approve it before the changed work proceeds. If financing is involved, some changes may also require the lender's consent.

Avoid assuming a conversation, text message or site visit has formally updated the agreement. Keep a current schedule of signed change orders and a revised running total.

Construction can be affected by weather, inspections, trade availability, material deliveries, change orders and unexpected site conditions. The contract should distinguish an estimated completion date from a firm contractual obligation and describe acceptable extensions, notice requirements and remedies.

Occupancy approval relates to municipal permission to occupy following applicable reviews. Possession concerns the transfer of the home to the buyer under the agreement. They are connected, but not necessarily the same milestone. Exterior grading or landscaping may be subject to separate seasonal obligations.

Confirm how the builder communicates schedule changes, whether a walkthrough or deficiency list is required, and what happens if completion extends beyond the agreed date. Do not assume there will be automatic financial compensation unless the contract or applicable law provides it.

A purchase or building contract can involve financing approval, an appraisal, the sale of an existing home, mortgage construction advances, permit approval or a negotiated lawyer-review condition. These protections do not exist merely because you expect them; they should be written into the agreement when appropriate.

Each condition needs a deadline and a clear process for notice, satisfaction or waiver. Clarify who bears appraisal shortfalls or lender-required changes, and what happens to your deposit if a condition is not met. If you are arranging construction financing on your own land, ask your lender about inspections and release of funds at each draw.

For cost-plus work, a financing buffer is especially important because actual costs may exceed estimates. Discuss a realistic contingency with your lender and financial adviser before signing.

A well-written agreement anticipates disagreements. Look for notice requirements, time to correct a problem, mediation or other dispute procedures, termination rights, interest or charges for missed payments, and who pays legal or administrative costs. A dispute clause should be read alongside any applicable statutory rights.

Alberta requires licensed residential builders to obtain appropriate authorization for new-home permits, with mandatory new-home warranty coverage subject to defined exceptions. That warranty generally provides minimum protection of one year for labour and materials, two for delivery and distribution systems, five for the building envelope and ten for major structural components. Warranty coverage is different from deposit protection and does not resolve every contractual dispute.

Before committing, check the provincial builder and property warranty registries. Your lawyer can also review title, construction liens, deposit protection and the closing process. These checks help clarify risk, but no single policy or registry eliminates all financial exposure.