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Ontario Home Building Glossary: Draws, Allowances, Liens and the Rest, in Plain English
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Ontario Home Building Glossary: Draws, Allowances, Liens and the Rest
Builders, lenders, designers and inspectors each have their own shorthand, and they use it as if you were born knowing it. You were not. Here is what the words mean, and why each one matters to your money.
Short version: Thirty-four terms, alphabetical, one or two sentences each. The ones that cost people the most when they misunderstand them are allowance, holdback, change order, substantial completion and occupancy permit. Read those five twice.
The terms
Allowance
A dollar amount in the contract for an item you have not chosen yet, such as flooring or light fixtures. Spend more than the allowance and you pay the difference, usually with the builder’s markup. More on allowances.
As-built drawings
Drawings corrected after construction to show what was actually built, including where the services run. Ask for them at the end; you will want them the first time you cut into a wall.
BCIN
Building Code Identification Number. The provincial registration that lets a designer prepare permit drawings in Ontario. Most designers need one; owners drawing their own house are exempt under Division C of the Code.
Building envelope
Everything that separates inside from outside: foundation, walls, windows, doors, roof, and the insulation, air barrier and vapour barrier in them. The envelope is what decides your heating bill.
Change order
A written amendment to the contract that adds, removes or changes work, with the price and schedule effect, signed by both sides before the work is done. A verbal one is an argument waiting to happen.
Certificate of substantial performance
Under the Construction Act, the document that says the work is substantially done (usable for its purpose, with only minor items remaining). Publishing it starts the 60-day clock on the lien period and the holdback release.
Contingency
Money set aside, outside the contract price, for things nobody could have known: rock, water, a Code surprise. Not for upgrades. How much to hold.
Cost-plus
A contract where you pay the actual cost of labour and materials plus a fee, usually a percentage. Flexible, transparent if the invoices are, and open-ended on the total.
Deficiency
Work that is done but not done right: a door that will not latch, a cracked tile. Listed at the walkthrough and fixed under the warranty. Different from incomplete work, which is work not done at all.
Development charges
Fees a municipality (and sometimes the county, region and school boards) charges on a new house to pay for infrastructure. Paid at the permit, and in some places large enough to change where you build. What they are.
Draw
A payment released by a construction lender after an inspection confirms a stage of work is done. Four to six draws is typical. The draw schedule.
Egress
A way out. In a house it usually means the bedroom window that is big enough to climb out of in a fire, with a minimum opening the Code specifies. Egress window rules.
Fire separation
A wall, floor or ceiling built to resist fire for a set time, required between a garage and the house and between dwelling units. Usually a specific drywall assembly with sealed penetrations and a self-closing door.
Fixed price
A contract with one price for a defined scope. Changes cost extra by change order; everything in the scope is the builder’s to deliver at that price.
Frost depth
How deep the ground freezes. Footings have to be below it, which in most of southern Ontario means four feet or more. Your municipality sets the number.
Holdback
The 10 percent of every payment that the Construction Act requires an owner to keep back until the lien period after substantial performance expires. It protects you from liens by unpaid trades; it is not a savings account. The holdback explained.
HRV / ERV
Heat recovery ventilator or energy recovery ventilator. The fan unit that brings fresh air into a tight house while recovering heat from the stale air going out. Required in new Ontario houses.
HST rebate
The federal and provincial rebate on the HST paid on a new or substantially renovated home. Under the enhanced 2026 Ontario rules, up to 130,000 dollars for qualifying builds. Run the calculator.
ICF
Insulated concrete forms. Foam blocks stacked and filled with reinforced concrete to make a wall that is structure and insulation in one. The complete guide.
Lien
A legal claim registered against your property by a contractor, trade or supplier who says they have not been paid for work on it. Serious, time-limited, and the reason the holdback exists. Liens for homeowners.
Lock-up
The stage when the house is closed in: roof on, windows and exterior doors installed, and the building can be locked. A common draw point.
Minor variance
Permission from the committee of adjustment to depart slightly from a zoning rule, such as a setback. Takes a hearing, a fee and a few months. How it works.
Occupancy permit
The building department’s sign-off that the house is safe to live in. The house does not have to be finished; the life-safety items do.
Part 9
The part of the Ontario Building Code that covers houses and small buildings (up to three storeys and 600 square metres). Most custom homes are Part 9 buildings, which is why they do not need an architect by law.
PDI
Pre-delivery inspection. On a Tarion home, the walkthrough with the builder before you take possession, where every deficiency gets written on the PDI form. What is on the form is protected; what is missed may not be.
Rough-in
The stage when plumbing, electrical and HVAC are installed inside the walls before insulation and drywall. Each is inspected before it is covered.
SB-12
Supplementary Standard SB-12, the part of the Ontario Building Code that sets energy efficiency requirements for houses: insulation, windows, mechanical. Your designer picks a compliance package and the house has to match it.
Setback
The minimum distance a building must be from a property line, road or water. Set by the zoning by-law, and the first thing to check on any lot.
Site plan
The drawing that shows the house on the lot with setbacks, grading, driveway, septic and well. Required with the permit; sometimes a separate approval of its own.
Substantial completion
The point where the house is usable for its purpose with only minor work remaining. It triggers the holdback clock, the warranty start and, in most contracts, the final payment.
Tarion
Ontario’s new home warranty program. Covers homes built by licensed builders for one, two and seven years, plus deposit and delayed closing protection. Does not cover owner-built homes. What it covers.
Vapour barrier
The layer, usually polyethylene on the warm side of the insulation, that stops indoor moisture from getting into the wall and condensing. Inspected before drywall with every seam and penetration sealed.
Walkout
A basement with a full-height door and windows on the low side of a sloped lot. Pleasant to live in, more expensive to build; the rear wall is taller and engineered.
Weeping tile
The perforated drain pipe around the footing that carries ground water to a sump or storm connection. If it is missing, clogged or above the footing, the basement will tell you.
Related guides on this site
Sources and further reading
Questions people ask
What is the difference between an allowance and a contingency?
An allowance is a budget inside the contract for a known item you have not chosen yet. A contingency is money outside the contract for unknowns. Confusing them is how a budget loses its cushion.
What is a holdback on a construction contract?
The 10 percent the Construction Act requires an owner to keep back from each payment until the lien period after substantial performance expires. It protects you against liens from unpaid trades.
What does substantial completion mean?
The house is usable for its purpose with only minor work left. It starts the holdback clock, the warranty and usually the final payment.
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Reviewed and updated October 2026. Costs are Ontario ranges, not quotes; code references are to the Ontario Building Code in force at that date.
