The deposit is not the ceiling. Buyers who walk away believing it is have been learning otherwise, expensively.
When an Ontario real estate transaction fails, the loss is rarely the deposit alone. A seller forced to relist into a softer market can claim the shortfall on resale plus the cost of carrying the property in the meantime, and those numbers routinely run well past six figures. Whether you are the party claiming or the party being claimed against, the weeks immediately after the failed closing shape the outcome more than anything that happens later.
What a Seller Can Actually Recover
- The deposit. Ontario law generally permits a seller to retain it on a buyer's breach even without proof of loss, subject to a narrow judicial discretion to relieve against forfeiture.
- Resale loss. The difference between the contract price and what the property eventually sold for, which in a declining market is the largest head by a wide margin.
- Carrying costs. Mortgage interest, property taxes, insurance, utilities and maintenance for the period between the failed closing and the resale.
- Costs. Ontario follows the loser pays rule, so a successful seller ordinarily recovers a portion of legal fees on top.
The counterweight is mitigation. A seller must act reasonably to resell, and a seller who relists at an unrealistic price, refuses reasonable offers, or sits on the property will find the claim reduced accordingly. What you do in the first month is evidence.
If You Are the Buyer Who Cannot Close
The assumption that walking away costs you the deposit and nothing more is the most expensive misunderstanding in Ontario real estate at the moment. In Chu v. Kumar, decided in 2026, buyers who abandoned an unconditional deal on a $50,000 deposit ended up with judgment against them of $188,075.22, plus $75,000 in costs across two actions.
If you are in this position, the position is not hopeless, but it is time-sensitive. There may be room in the wording of the agreement, in the conduct of the other side, in a misrepresentation in the marketing of the unit, or in a negotiated extension or price adjustment that is cheaper for everyone than litigation. Silence as the closing date passes is the one approach that never helps.
The Appraisal Gap
The dominant cause of failed transactions in Ontario right now is the appraisal gap: the lender values the property below the agreed price, the mortgage advance falls short, and the buyer cannot fund the balance. It bites hardest on pre-construction condominiums bought at peak pricing and closing years later into a different market. A financing shortfall is generally not a legal excuse for failing to close an unconditional agreement, which is precisely why the exposure catches people unprepared.
Can You Force the Sale to Complete?
Specific performance, an order compelling completion, requires showing that damages are an inadequate remedy because the property is genuinely unique to you. Ontario courts have become more demanding about that, and a standard condominium unit is a harder case than a distinctive property. Where specific performance is unrealistic, the claim becomes one for damages, and the argument moves to resale price, carrying costs and mitigation.
Before You Sue: Can They Actually Pay?
This is the question I would rather answer at the first meeting than at the end of a file. A judgment against a defendant with no assets is an expensive piece of paper. It is worth establishing early what the other side owns: equity in other property that a writ can attach, income that can be garnished, a guarantor, a corporate defendant with assets, or another party further up a chain of failed transactions with more to lose. Where recovery is unrealistic I will say so before you spend money finding out.
Related work: enforcing a judgment once you have one, construction liens on new builds, and civil litigation generally.