Five Tips For Buying a New Condo
It’s no secret that there’s an ongoing condo boom in Ontario – just look around you. Our cities are going up vertically, and that means more and more people are enjoying high rise living. So if you are joining the crowd and thinking of buying a new condo, here are some tips to make your purchase a smooth one:
1. PATIENCE IS IMPORTANT.
It could be two or three years between the date you sign your purchase agreement and the date you take occupancy of your unit. If construction runs over schedule, it could be even longer.
2. KNOW YOUR RIGHTS WHEN IT COMES TO DELAYED CLOSINGS.
Builders are entitled to extend the occupancy date specified in a purchase agreement as long as they provide proper notice. (When proper notice is not given, buyers are eligible for delayed occupancy compensation.) It’s a good idea to read up on your rights and responsibilities in delayed occupancy situations, which you can do at tarion.com.
3. HIRE A LAWYER.
A condominium lawyer will help you interpret your purchase agreement. It’s to your benefit to understand both your own and your builder’s responsibilities. For example, the Condominium Act entitles you to a 10-day “cooling off” period that begins on the day you receive the purchase agreement or a document called the disclosure statement, whichever comes later. During this time, your lawyer can negotiate changes to the offer, like capping adjustments to the purchase price, or restricting amendments to the size, design or dimensions of the unit.
4. UNDERSTAND DEPOSIT PROTECTION.
If a builder fails to close the sale or substantially complete construction, deposits are protected up to a maximum of $20,000 with any excess deposit amounts being protected by the trust provisions of the Condominium Act. Any money paid over and above this is may not be protected if something unforeseen happens with the builder or development.
5. BE PREPARED TO MOVE INTO A CONSTRUCTION ZONE.
Condo projects are different from single family homes in that the purchase is usually completed in two steps. Step one is interim occupancy. Many buyers find out the hard way that they’re required to take possession of their completed unit (and pay the balance of the down payment, which generally amounts to 25 per cent of the purchase price) before common element features like front reception, landscaping and the swimming pool are finished. This means you could live for many months without the anticipated amenities — particularly if the unit sits on a lower floor.
Whether you are a first time buyer, empty nester, or just drawn to the condo life, make sure you know your rights when buying a new condo.