Cooling Off Periods

In Ontario, ten calendar days after you have received either the full signed purchase agreement or the disclosure statement is considered the cooling off period. If you change your mind, your deposit plus any interest that may be payable will be refunded. During this time frame, it is recommended to arrange your mortgage financing and obtain legal representation.

Disclosure Statements

The developer of the building must provide you with a disclosure statement which includes the following information: property description, the number of units, estimated start and finish dates, the condo corporation’s current budget, condo fees, and condo by-laws, rules and restrictions.

New Condo Warranty

New pre-construction condos are covered by the Ontario New Home Warranties Plan Act; however, this does not mean you should skip the home inspection.

Anticipate Delays

Although you will be given an expected date of completion for the building, there are factors that may affect this date. Your agreement to purchase will determine if there are builder penalties for delays, but be prepared to wait anywhere from 6 months to a year or more before you can move in. Plan alternate living arrangements in the event that there are extended delays.

Building Revisions

The information regarding the building itself that appears in your sales agreement is subject to change and may include condo layout, the number of storeys, or certain building amenities. Be advised, you will be protected from certain material changes, however, you may not get exactly what you signed up for. I will be able to discern what these are and educate and advise you in this situation.

Interim Occupancy

During the time in between the completion of the building’s units and when you can actually take possession, you do not own the condo and you will be required to pay the builder an occupancy fee. These may be estimated at the cost of your mortgage plus condo fees and taxes but will be paid to the builder. In these circumstances, you can rely on my experience to ensure you are being treated fairly.

Condo Maintenance Fees

Typically, the original condo maintenance fees you were quoted when you signed your purchase agreement will increase once the building is registered and a board is elected. There may be adjustments up to 10-15%, which usually occur during the second to third fiscal year of ownership after the board of directors conduct the first reserve fund study and the true costs of maintaining the building come to light.

Closing Costs

There are additional closing costs when you are buying pre-construction condos as opposed to resale condos. These closing fees usually include HST on included appliances, installation fees for utilities, builder adjustment, and development fees. It would be wise to budget an extra 3-5% of the original purchase price to be added at closing.

Reserve Funds

At closing, you will need to contribute, at the minimum, at least 2 months of condo maintenance fees which will be dedicated to the condo’s reserve fund in case of building emergencies.

Sales Taxes

Buying pre-construction condos is subject to HST, however, if you are the occupant of the condo, you may be eligible for an HST rebate. This is something that should be verified through legal advice and if you would like a recommendation, I have a list of trusted professionals whom I have built relationships with.