Short answer: A builder deposit is money you pay toward the purchase price before your new home is finished, usually in stages set out in your purchase contract. How it is protected depends on what you are buying. For a new condominium unit, Alberta's Condominium Property Act requires your payments to be held in a trust account or covered by an approved purchaser protection program. For a house or duplex on its own lot, protection comes from your contract and from optional deposit insurance, so ask for the details in writing before you pay.
By Jay Lewis, REALTOR® | RE/MAX Excellence · Updated October 7, 2026
This article is part of my Edmonton New Construction Buyer's Guide.
Free download: my New-Construction Buyer Checklist. Two printable pages, from your first show home visit to your one-year warranty.
I've worked in new construction for more than 25 years, on the trades side (framing, renovations and full contract builds) and the sales side. On a build, the deposit is the first money that moves, and it moves months before there is a finished house to walk through. Buyers ask me about paint colours and lot sizes all day. Very few ask where their deposit sits while the house goes up. I'm not a home inspector, engineer or lawyer, and I'll tell you when you need one. Several of the questions below are lawyer questions, and I've marked them.
What is a builder deposit?
It is money you pay the builder (or the builder's lawyer) when you sign a purchase contract and at set points afterward. It shows you are committed, and it is credited toward the purchase price when you take possession. The rest of the price is paid through your lawyer on possession day, from your down payment and your mortgage.
There is no single standard amount. Each builder sets its own schedule, and the schedule for a quick possession home can look different from a build that starts with an empty lot. Deposit amounts change often with market conditions and world events, so treat any figure you hear in a show home as an estimate until it is written into your contract.
Illustrative image.
When do I pay the deposit?
Deposits are often split into stages. Your contract should answer each of these:
How much is due when you sign?
Is more due when you remove your conditions, such as financing or the sale of your current home?
Is a separate deposit due for upgrades or changes you choose after signing?
Who is each payment made out to: the builder, or a law firm in trust?
When is the balance due, and how does it reach the builder?
If you are building from scratch, the gap between your first payment and your possession date can be long. I walk through the stages in how long it takes to build a house in Edmonton. With a quick possession home the house is already built or close to it, so your deposit is outstanding for a much shorter time.
Is my deposit protected if I buy a new condo?
Yes, and the rules are in provincial law. If you buy a new or converted condominium unit from a developer, the Condominium Property Act and its regulations say:
Trust or an approved program. While the unit is under construction, your deposit and other payments are protected by a trust account managed by a prescribed trustee, by a purchaser protection program, or by a combination of the two. The Government of Alberta describes a prescribed trustee as a lawyer who is an active member of the Law Society of Alberta.
Three days. A developer who receives money that must be held in trust has to deposit it into the trust account within 3 days, not counting holidays and Saturdays.
Ten days to cancel. You can cancel the purchase agreement within 10 days of signing. If you didn't receive all the required documents before you signed, the 10 days run from the day you receive them.
Fifteen days for the refund. If you cancel within that period, the developer must return your money within 15 days of receiving your written notice.
If the project is covered by a purchaser protection program, other rules may apply, and the province says to contact the program provider for the details.
Two cautions. Some townhomes and duplexes are sold as condominiums and some are freehold, and it isn't always obvious from the show home. Ask which one you are buying, because it decides which rules apply. And the 10-day period is the only automatic way out. Once it has passed, your contract decides what happens to your deposit.
Is my deposit protected if I buy a house or duplex on its own lot?
The trust rules above come from the Condominium Property Act, so they apply to condominium units. For a freehold house or duplex, look at two things: your contract and deposit insurance.
Start with what the mandatory warranty covers. Every new home in Alberta has to be enrolled with a warranty provider, with coverage of at least:
1 year for labour and materials
2 years for delivery and distribution systems such as electrical, plumbing and heating
5 years for the building envelope
10 years for major structural components
All four are about defects in the house. The province's overview of this coverage doesn't mention deposits. Deposit protection is a separate product that a builder may or may not include.
One example is the Alberta New Home Warranty Program, which describes its pre-possession insurance as optional. As published on its website:
Single-family homes: Deposit Protection Insurance covers the payments you made to secure your building commitment until building begins, up to a maximum of $100,000. Home Completion Insurance then applies while the home is under construction, until you take possession.
Multi-family homes: deposits are protected from the time they are paid until you take possession, up to a maximum of $50,000.
The program recommends confirming with your builder how much coverage applies to your own purchase agreement. Those maximums are the provider's published figures and can change. Other warranty providers work in Alberta too, so ask your builder which provider it uses and whether deposit coverage is part of your contract.
How do I check a builder before I pay?
The province runs two free public searches, and both take a couple of minutes.
Builder registry. All residential builders constructing new homes in Alberta since December 1, 2017 need a valid builder licence. Search the builder's name and confirm the licence is active.
Property registry. Search the address or legal description to see the warranty information for a specific home.
What happens to my deposit if I back out?
Your contract decides, and this is a lawyer question. In general, a contract has conditions with deadlines, such as financing or the sale of your current home. The contract says what happens to your deposit if you can't meet a condition by its date. Once your conditions are removed, the deal is firm, and walking away can cost you the deposit and possibly more.
Builder contracts are written by the builder, and the deposit clauses are some of the most important lines in them. Have a real estate lawyer read the contract before your conditions come off. My Alberta builder contract checklist lists what to look for, and show home sales rep vs. buyer's agent explains who works for whom when you sign.
What should I ask before I hand over a deposit?
Is this home a condominium unit or freehold?
Who is the cheque or transfer payable to, and is the money held in trust?
Which warranty provider is the home enrolled with?
Is my deposit covered by deposit insurance or a purchaser protection program? Up to what amount, and can I see it in writing?
What are the deposit stages and dates?
Under what conditions do I get the deposit back, and how quickly?
What happens to my deposit if possession is delayed?
Are upgrade deposits treated the same way as the main deposit?
I also list homes for some builders. If you're interested in one of them, I'll tell you up front and explain how representation works.
Get my free New-Construction Buyer Checklist
The checklist covers what to ask and check at each stage, from your first show home visit to your one-year warranty.
Frequently asked questions
How much is a builder deposit in Alberta?
It varies by builder, by home type and by whether the home is already built. The amount and the payment dates are set in your purchase contract. Deposit amounts change often with market conditions and world events, so any figure is an estimate until it is in writing.
Is a builder deposit refundable?
It depends on your contract. New condominium buyers have a 10-day cancellation period under the Condominium Property Act, with the money returned within 15 days of the developer receiving written notice. Outside that, your conditions and their deadlines decide. Ask a real estate lawyer before you sign.
Does the Alberta new home warranty cover my deposit?
The mandatory coverage is for defects: 1 year for labour and materials, 2 years for delivery and distribution systems, 5 years for the building envelope and 10 years for major structural components. Deposit protection is separate. The Alberta New Home Warranty Program, for example, offers it as optional pre-possession insurance.
Who holds my deposit when I buy a new condo?
A prescribed trustee holds it in a trust account, unless the project is covered by an approved purchaser protection program. The developer has 3 days, not counting holidays and Saturdays, to deposit trust money after receiving it.
How do I know if a builder is licensed?
Search the builder's name in the Government of Alberta's public builder registry and confirm the licence is active. Builders constructing new homes since December 1, 2017 need one.
Planning show home visits?
Text me first at 780-220-8449, or book a 20-minute call. I'll go through the deposit schedule and the contract with you before you sign anything, and I'll tell you when it's time to call a lawyer. I work with buyers in Edmonton, Sherwood Park, Fort Saskatchewan, Devon, Spruce Grove and Stony Plain.
Jay Lewis | REALTOR® | RE/MAX Excellence
Sources: Condominium Property Act (Alberta King's Printer) · Government of Alberta: condominium information · Government of Alberta: Purchasing a Condominium · Government of Alberta: new home warranty overview · Government of Alberta: builder registry · Government of Alberta: property registry · Alberta New Home Warranty Program: pre-possession insurance
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This article is general information, not legal, tax or mortgage advice. Deposit amounts, insurance limits and program rules are estimates that change often with market conditions and world events. Confirm the details with the builder, the warranty provider and a real estate lawyer before you sign.
