People often get into investing in real estate after hearing a friend or family member who made a killing selling a property. In todays market with the popularity of condominiums and the great gains in value ~ were hearing all the stories about people who flipped their condo for big profits. Not many people know what’s at stake when flipping a condo though. People who buy under this premise should know the facts and potential pit falls if caught. Those who buy new housing units and re-sell without first occupying them, need to meet specific obligations under the Ontario New Home Warranties Plan Act.
Tarion advises those who buy new housing units and re-sell without first occupying them are required to submit an Application for Registration as a ‘Vendor’ to Tarion Warranty Corporation, meeting specific terms and conditions.
What does this mean for the person who is trying to flip their condo ~ They are responsible for the Deposit Protection, Delayed Closing and any material changes made after purchase from the builder. They are further required to provide Tarion with written confirmation that the builder will provide necessary warranty service or alternatively, specify how they will provide it. This deposit protection could mean thousands of dollars from your bottom line.
In addition, Tarion points out that the warranty start date is the date of possession of the owner who occupies the unit. The new owner should be provided with the ‘Homeowner Information Package’ outlining the warranty coverage.
For more information visit www.tarion.com
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