Buying Pre-Construction...WHAT YOU SHOULD KNOW

FOUR PHASES IN BUYING NEW CONDOMINIUMS:

  • Pre-construction Phase
  • Construction Phase
  • Interim Occupancy Period
  • Title Transfer (Final Closing)

 

DEPOSITS

  • Held "in trust" by developer's lawyer
  • Deposits are fully insured
  • Interest is paid from date of deposit to occupancy at Act prescribed rate
  • NSF cheques are subject to administrative fees

 

TITLE

  • Can be assigned to immediate family without penalty
  • Assignment Clause required for non-family, but assignee remains responsible for closing on unit if assignor defaults

 

HST

  • Included in the purchase price if you are an owner-occupant
  • Investors are responsible for paying rebate portion on final closing, but can apply to CRA for full refund after leasing unit for 1 year.

 

CONDOMINIUM DISCLOSURE STATEMENT

  • Includes
  1. Disclosure Statement
  2. Budget Statement for Year 1 operations
  3. Proposed Declaration
  4. Proposed By-Laws
  5. Proposed Rules
  6. Proposed Management Agreement
  7. Preliminary Draft Plan of Condominium (excluding parking levels)
  • Defines what items are considered part of your unit and what items are considered part of the common elements
  • Defines how common element fees (maintenance fees) are calculated
  • Names the Property Management Company for Year 1
  • Details how the condominium corporation is to operate and make decisions

 

FINISHES & COLOUR SELECTIONS

  • Developer has right to substitute material of equal or better quality as materials may become discontinued from time of pre-sales to construction
  • Colour selections typically start 12 months prior to occupancy
  • Upgrades and pricing are usually not available until colour selection time as availability of materials and pricing at time of pre-sales may change by the time construction commences
  • Upgrades are usually payable 100% at time of selection

 

INTERIM OCCUPANCY PERIOD

  • Period between possession of the unit (occupancy) and title transfer date (final closing) when your mortgage kicks in and you become the legal owner
  • Occupancy Fee is payable to Vendor during this period, calculated as:
  1. Interest in unpaid balance of purchase price, plus
  2. Estimated municipal realty taxes
  3. Common expenses (maintenance fees)
  • Occupancy fee does not go towards your mortgage
  • Occupancy period varies, but typically 3-6 months
  • You cannot lease your unit during occupancy period, unless you have signed an Authorization to Lease with the Developer

 

TARION WARRANTY CORPORATION

  • All new home builders are required to be registered with Tarion Warranty Corporation
  • All new homes protected under Ontario New Home Warranties Act
  • Includes protection for deposits, workmanship and delays
  • 1-year warranty: units to be constructed in workmanlike manner and free from defects in materials
  • 2-year warranty: covers water penetration of building envelope; electrical plumbing and heating systems; and exterior cladding
  • 7-year warranty: covers major structural defects
  • All deficiencies documented at Pre-Delivery Inspection (PDI) on Tarion Certificate of Completion and Possession Form

 

CLOSING COSTS

  • Land Transfer Tax - Ontario + Toronto
  • Adjustments, which are determined at Title Transfer Date (final closing), but may be "capped" if requested
  • Adjustments includes:
  1. Realty taxes estimated from Occupancy to Title Transfer Date
  2. PST on chattels (i.e. appliances)
  3. New taxes imposed by government
  4. Increase in development and/or education development charges
  5. Tarion Warranty Corporation enrollment fee
  6. Park Levies imposed by government
  7. Utility meters and connection charges
  8. HST (if non-owner occupant)
  • Legal Fees
Amir Pasha

Amir Pasha

Sales Representative
CENTURY 21 Innovative Realty Inc., Brokerage*
Contact Me
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