Wednesday, 11 July 2012

Tips for Buying a New Condominium

In this weeks' blog, I cover the topic of buying a new construction condominium property. For anyone who has purchased a property from a builder, the process can be time consuming and stressful. Here are a few suggestions, which list is not exhaustive, when contemplating purchasing a condominium property from a builder:
  1. Ask for a copy of their standard agreement of purchase and sale and read it through carefully before making your offer. Often times, the standard agreement is replete with hidden charges and closing costs which you may not be aware of which can add thousands of dollars to the final closing costs;
  2. After reading through the agreement, make a plan for yourself as to what you are going to ask for in the sales office since the purchase price often does not include all the closing costs and fees;
  3. Ask to have all the closing costs capped at a maximum amount so you have some certainty as to what you will need to pay on closing. Pay close attention to those specific paragraphs in the agreement which allow the builder to pass on costs to you and make sure that the agreement you sign specifically references those parts of the agreement and have the costs "cap" apply to those provisions in the agreement; and
  4. Insist that the agreement be made conditional on your solicitors' approval.
What follows are some issues that I often see in builders' contracts:
  1. The size of the unit is approximate and may vary from the sketches or brochures in the sales office;
  2. None of the representations or information presented to you by the sales representatives is binding on the builder if it conflicts with the terms of the agreement of purchase and sale;
  3. The builder has the right to do a credit check on you and if they find your credit unsatisfactory, they have the right to terminate the transaction;
  4. Finishes and materials you select in the decor centre may not be available at the time of construction and the builder has the right to substitute those materials, provided the substitute material are of equal or better quality from the ones you chose in the decor centre;
  5. There are usually restrictions on the use of your patio or balcony including, a prohibition of the use of barbeques;
  6. There are also strict rules about pets, including a general provision that the board of directors of the condominium corporation has the right to require that you cease having a pet that the board finds is a nuisance to other unit owners.
The foregoing is just a small sample of issues and concerns when buying a condominium property from a builder. To make sure you are fully informed, retain the services of a lawyer before finalizing the transaction. 

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