Find Your Dream Home

 Many people find out too late that the new condo unit he bought wasn’t nearly as large as advertised. When they move in and measured the area, they discover it wasn’t 700 square feet after all. The condo was actually 560 square feet—if you don’t count the balcony and bathroom.

That’s not unusual, Condo sales staff will often include balcony or terrace measurements as part of the total square footage. They’ll also base room measurements on external walls. You can’t rely on their verbal assurances, on the floor models, or on the sale pitch or brochure.

While listings for resale homes and condos can not include hallway, bathroom, basement or outside space (such as decks and balconies) as part of the listed square footage, no similar restrictions apply to new build or pre-sale condo listings.

This has become a problem with so many new condo purchase decisions relying solely on brochures or artist renditions. Worse, is that builders have the discretion to change an image, or floor plan, or layout and “you have no say,”  We suggest asking for a breakdown of room sizes and plan details, and to “get it in writing.” Then, if there’s a substantial difference between what you’re sold and what you get you can either negotiate a price reduction or try and get out of the deal.

 Whether you’re buying a new or pre-sale condo, the purchase agreement is the legally binding document that spells out what you’re getting and the conditions of the sale. It’s full of fine print and legal-speak, and if you sign without legal representation, you risk being bound to terms you don’t understand or don’t want. More importantly, it destroys any chance of re-negotiating the terms of the sale.

Skip legal advice and you could end up with an electrical utility box on the front lawn of your Townhome that you can’t do anything about, regardless of what the plans looked like. You could find yourself stuck with any manner of substitutions, exclusions or inclusions that could detract from your unit’s future value.

When you’re buying a condo, depending on the province you live in, you may have a cooling off period of up to 10 days. This gives you a chance to contact a lawyer who will walk through your contract after it’s signed. If you don’t like what they find, you can back out of the deal. (Unfortunately, there’s no such period for freehold new-build homes, and many home builders demand that you sign a contract on the spot to secure your sale price or lot selection. Try to avoid this situation if possible, but if you must, at the very least insist on adding a clause that makes the deal conditional upon approval by your solicitor.)

 About 10 years ago, if your new-build condo wasn’t ready on time, it was your problem. Builders were not required to provide reasons or to limit their delays. But that all changed when a Toronto condo buyer challenged a 2006 Tarion decision.

In 2001, the Buyer bought a unit in a soon-to-be constructed condominium tower in downtown Toronto. His initial possession date was Nov. 30, 2002. But as the date approached, the builders sent letters announcing delays. The possession date was moved back six different times—and he didn’t move in until eight full months after the initial possession date.

As such, he requested $5,000 from the builder to compensate him for the delays. The builder refused. The case went before a tribunal, and the Buyer won. Tarion appealed the case, but in 2006, the Buyer was vindicated: Not only did he receive $5,000 in compensation but he was also awarded close to $9,000 in damages. And the case changed how Tarion and other provincial warranty programs handle builder delays.

The law is now clear, Critical dates are now included as part of the purchase agreement and contract. If a builder misses these critical dates and requires an extension, a buyer can either agree, and seek compensation, or simply get out of the deal. Either way,  you should seek legal advice whenever you’re presented with a request to delay a critical date.

 Most buyers assume that all new-build lofts, condos and homes are covered by a provincial warranty, but this isn’t the case. Only three provinces—B.C., Quebec and Ontario—make warranty coverage mandatory.

In Ontario, it’s illegal to build without being registered. But in other provinces, where the warranty program isn’t mandatory, builders can simply opt-out of coverage.

We suggest buyers get their new home warranty in writing. They should also go online to determine if their builder is registered with a provincial regulator as a new home builder. This is particularly important for loft or condo conversions—residential units constructed inside an existing building shell. At present, new-build warranties don’t apply to conversion projects, although there is currently discussion about whether or not to change this.

 When you sign the purchase agreement for your new place, many of the closing costs are estimates. You need to know that these costs often escalate as you approach your possession date. Not only do they escalate, but they can get quite absurd. For instance, you may find large charges that suddenly materialize for hooking up gas and electricity meters, plus mortgage discharge fees, development fees, deposit verification fees—We have even seen a fee for “public art contributions” to cover the cost of a sculpture at a new-build condo’s entrance. That’s why you should pay close attention to the adjustments and try and get a cap on certain items and remove others, if possible. Having the right team of both Condo savvy Realtor and Lawyer can avoid these hidden costs and save you thousands of dollars.

 If you’re buying a new condo or townhouse as an investment, the key is to get in as early as possible. In order to get the financing to start a new project, builders will often raise initial funding through pre-sales. These pre-sales often kick off with invitation-only VIP events. Once the VIP event is over, the builder will open sales up to all interested realtors, then finally they’ll open the project up to the public. By the time a builder throws a grand opening for the general public, often 50% of the units have already been sold and the price has gone up three or four times.

It’s easy to get in on these VIP pre-sales, but you’ll need to work with a realtor who specializes in new developments and be ready to move quickly. Reesa has been a Condo VIP Agent for over 15 years.

Keep in mind that purchasing at the right time of year can also save you tens of thousands. Each local market has its own cycle, so it’s best to talk to an experienced realtor.