WHAT TO CONSIDER WHEN BUYING A NEW CONDOMINIUM FROM A BUILDER.
When buying a new condominium from the builder, the Agreement of Purchase and Sale is drafted by the builder’s lawyer with only the builder’s best interest in mind. It usually contains clauses relating to extra fees such as development charges, park levies, utility connection fees and others for which you will be responsible and which may be several thousands of dollars if not removed or capped by your lawyer.
If the Agreement of Purchase and Sale and any amendments to it have already been signed, it is important that it is reviewed by a lawyer while the offer is still conditional and before the deal becomes firm.
Before signing the contract to buy a pre-construction condominium ask the builder’s Agent the following questions:
1. How long is the cooling off –period, which means, for how long is the offer conditional?
2. How large is the unit in square feet to determine if the size is appropriate for you and your family’s needs?
3. Is a parking space included in the purchase price?
4. What is the size of the parking spot and will your vehicle, especially if you own a large SUV or pick-up truck, fit in the parking space?
5. Is a locker included in the purchase price?
6. How much is the anticipated maintenance fee for the unit you are considering buying?
7. Are the utilities included in the maintenance fee or are they separately metered, and if they are included which ones?
8. What are the extra costs and adjustments which will be charged by the builder on closing in addition to the purchase price, and approximately by how much will they increase the purchase price?
9. Are pets permitted in the building? Are there any restrictions regarding the breed, size, weight, and number of pets per unit allowed in the building?
11. Will you be able to have a barbeque on your balcony?
12. Will you be able to assign your unit to another buyer before the closing date?
13. If an assignment is allowed does the builder charge an assignment fee and if so, how much, including the builder’s lawyer fees and administration fees if any?
14. Will you be able to rent the condominium during the possession period before the final closing, if you decide to?
HOW A NEWLY CONSTRUCTED CONDOMINIUM’S CLOSING WORKS?
The closing of a newly constructed condominium differs from the closing of a freehold house. Essentially, there are two closings: an interim occupancy when you take possession of the unit but the entire building is still own by the builder and the final closing when ownership of your unit, parking spot and locker, if any, is transferred to you.
During the interim occupancy period you do not pay your mortgage, as ownership of the unit has not been transferred to you yet. Instead you pay “rent” referred to as an occupancy fee composed of the maintenance fee, an estimate of property taxes and interest on the outstanding balance you owe to the builder. The final closing usually occurs several months after interim closing and it is when the title to unit changes from the builder to you.