Important Stuff You Should Know About Buying Pre-Construction, Vol. 1

11 April 2018
Joshua Chisvin

Purchasing a pre-construction condo is more complicated than it first seems. In fact, finding a condo that you adore and at a price you can afford is actually the easy part. It’s only when you go ahead and sign the deal that everything truly gets serious.

Here’s what you need to know:

THE 10-DAY COOLING OFF PERIOD

After you sign your agreement, make sure you take it to your lawyer immediately. You don’t want to wait. That’s because in Ontario, you have ten calendar days to ‘cool off’. Yes, these ten days are an opportunity to request amendments or to back entirely out of the deal without penalty. In other words, don’t waste them — after all, once time expires, your deal is firm. Specifically, you need to know exactly what you’re buying and, just as importantly, what exactly the contract gives your builder the right to do. What you saw and agreed to might not actually be what you ultimately get. Your signed offer may give the builder the right to do anything from substituting materials of equal or better quality at any time and installing bulkheads where you least expect them, to varying the layout and reversing the floor plan, to changing the colours and textures used, to even extending the closing dates for lengthy periods of time.

THE DISCLOSURE DOCUMENTS

These are another crucial set of documents to review before the 10-day cooling off period runs out. Remember, there’s a lot of information to digest when you purchase pre-construction, and your real estate lawyer will likely have to explain how to read and understand all of these important documents. They often include a budget statement, proposed declarations, proposed by-laws, proposed management agreement and proposed rules. What’s more, once you finish reviewing these documents, feel free to request any changes you deem necessary. Then you can go ahead and firm up your deal. And moving ahead, whenever you receive a notice about a delay from the builder, just forward it to your lawyer. Same goes whenever you have a concern about what’s going on.

THE INTERIM OCCUPANCY PERIOD

With new-build condos, there are actually two closing dates. The first is the occupancy date, which is the day you are allowed to move in. To be certain, it is not the day that you own your condo and title gets turned over to you. It just refers to the date you are allowed to start living there. Moreover, that you start paying money to the builder for the right to do so. The second closing is the final one. This is when you take full ownership of the property and title is finally transferred to you. Then, and only then, do your payments to the builder end. The balance of your purchase price can be paid and, at last, you can begin to feel good about living in your brand new home.

  Real Estate