For years, One Bloor West (formerly “The One”) was the most talked-about luxury tower in Toronto — and one of its most troubled.
This week, the Ontario Superior Court approved the cancellation of 314 out of 329 purchase agreements. Buyers will receive their deposits back (plus interest), but many pleaded with the court to keep their units — including one purchaser whose daughter had bought a unit shortly before she passed away.
For anyone who has ever bought, or is thinking about buying, a pre-construction condo in Ontario, this case is the clearest real-world reminder that even the biggest, splashiest projects can unravel — and buyers’ rights depend heavily on what the law says, not what a builder promises.
Here are the three things you must know:
1.Courts can cancel even fully executed purchase agreements — and your desire to keep the unit doesn’t matter.
While many buyers told the judge they “really, really want that condo,” the law is blunt:
When a developer becomes insolvent, the court’s priority is to deal with secured creditors — not purchasers waiting for units.
That’s exactly what happened with One Bloor West:
The monitor (Alvarez & Marsal) determined that almost all of the 2017–2018 agreements were no longer economically viable.
It asked the court to rescind 314 contracts.
The court agreed and ordered the cancellations.
This is not a reflection of buyers’ intentions or personal circumstances — it is simply how Ontario law treats insolvent condominium projects.
And as Justice Osborne noted, buyers don’t always get their deposits back in these situations. In this case, they do — and he called that “a great deal” compared to what the law otherwise permits.
2.Your protections come from the Tarion Addendum, the Condominium Act, and deposit-trust rules — not from the builder’s brand or the prestige of the project.
The failure of a marquee project like One Bloor West shows that no development is too big to fail.
Legally, here’s what protects buyers when things go wrong:
Deposits must be held in trust under the Condominium Act.
If the project is terminated, builders must return deposits (plus interest) within 10 days.
Tarion’s deposit protection applies if the builder cannot or does not refund (up to $20,000 for condo units).
Builders can only cancel based on specific Early Termination Conditions in the Tarion Addendum — such as financing or failure to get approvals — and only if they took all commercially reasonable steps to satisfy them.
In One Bloor West’s case, the project’s insolvency effectively overtook all of these mechanisms. The receiver and court stepped in — as they can at any time with a distressed development — and the usual contractual protections merge into a court-controlled process.
Even then, one rule remained consistent:
Deposits stay protected because they were held in trust.
3.If your project is cancelled, you have rights — but they’re limited, and not the ones most buyers think they have.
When a project collapses, Ontario buyers often assume one of three things:
“I should be able to force the builder to honour the contract.”
Not possible in an insolvency. Specific performance is exceptionally rare for condo units.
“I should get compensation for market appreciation.”
Only possible if you sue for bad faith — and only if the builder cancelled improperly. A court-ordered cancellation (like One Bloor West) usually ends this discussion.
“I should get to keep my unit.”
You can’t. Even the One Bloor West buyers who spoke emotionally to the court had no legal mechanism to keep their original contracts alive.
What you do have:
A guaranteed refund of deposits and extras, plus interest.
A right to make a Tarion claim if refunded improperly or not at all.
A potential lawsuit only if there is evidence of bad faith or failure to take “all commercially reasonable steps” to satisfy early termination conditions.
A right to re-purchase the unit (or another in the building) only if the receiver voluntarily offers that opportunity — as is happening here, before the public launch.
The One Bloor West buyers are fortunate to receive:
Full deposit return
Interest
First right to re-buy — at new, significantly higher prices
Not ideal. But legally, it’s one of the best outcomes available when a developer collapses mid-construction.
Dig deeper:
Condominium Act, 1998 (Ontario)
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Tarion: Delayed Occupancy, Deposit Protection, and Addendum Guide
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Home Construction Regulatory Authority (HCRA) – Builder Directory
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