The thought of finally purchasing your very own brand-new condominium unit in Toronto can be exhilarating. You won’t be taking over someone else’s worn-out space and wouldn’t need to deal with any surprises hidden behind wallpapers and other little issues that crop up later. When you buy a condo direct from a builder, your property will have the attributes of a structure aligned with the current design trends. Plus, you are sure that every nook and cranny is ready for you as the first user.
However, while everything about the unit you are eyeing sounds perfect, there are things that you should watch out for in your contract. This is to ensure that the agreement isn’t one-sided in the builder’s favour. As per Ontario real estate law, condo buyers are given a 10-day window from the date the agreement was signed to withdraw for any reason. If you purchased a freehold house, then this 10-day cooling period does not apply, though you can still require that the contract be subject to a lawyer’s green light before it is in force.
Whenever property buyers consult with me about a home or condo they recently purchased, I mention the important things that one should know when acquiring from a builder. These are the four things I remind them of before they decide to either push forward and finalize their agreement with the builder, to cancel it entirely.
Did you check the developer or builder’s track record and background?
Transact with a builder that already has a solid stable of successful projects, whether condos or freehold houses. You can get in touch with current property owners and find the following: Was the project completed on time? Were the amenities and materials delivered as promised? If there were deficiencies, were these addressed immediately and satisfactorily? How happy are they to have purchased a home from this builder?
Will the developer allow you to assign your property before final closing or occupancy?
We can’t predict our financial future and condo building projects usually take a few years to complete. Should you find yourself wanting to assign your unit or sell your contract to somebody else, will the builder allow it? Some Ontario builders offer limited assignment rights, and this will come with a fee. In some instances, the builder will require you also to limit advertisements on your sale on multiple listing services (MLS). It’s best to clarify these from the beginning to know your options before you sign anything.
Will you be allowed to rent your unit out later on?
Most condo builder contracts ban their property owners from renting out their units upon occupancy. This is to ensure that whoever purchased the unit is the one who is living in it, mostly for security reasons. If you are purchasing for investment purposes, then this will be an issue later.
Are there any additional and potential charges not mentioned in the agreement?
Your Ontario condo purchase will likely include the harmony state tax (HST) but be sure to clarify anyway. There might also be other fees that are not specified in the contract with your builder. More likely than not, you will be asked to fulfill all payments at the final closing phase, which could run by thousands of dollars. While this is mostly inevitable, it’s best to ask that everything be printed in black-and-white in your agreement from the get-go. This helps to prevent surprises and also lets you prepare financially.
Overall, buying a condo or freehold property from a builder in Toronto, Ontario, should be seamless; if you ask the right questions, that is. GKLaw is an expert in Ontario and Canada real estate law and can provide the guidance you need to purchase your property without any headaches. If you have any enquiries about your agreement with your builder, feel free to get in touch with us at 416-665-9000.