Congratulations on purchasing a pre-construction condo! Technically you have not bought the condo yet, you are in what is called the 10 Day Rescission/cooling off period, you have signed the paperwork and the deposit cheque, but now what? Well any good buyer’s agent will tell you it is essential to promptly get your APS (agreement of purchase and sale) to a lawyer for review. If your buyers agent has not stated this, it may be cause for concern, you cannot rely on the word of a sales representative in the condo presentation room with commitment of this magnitude.
These are just some of the subjects a lawyer will be helpful with.
- HST Rebate
- Superfluous charges
- Closing cost caps
- Assignment Clause
- Investment property clause
- Variances in Square footage
HST Rebate. This was formally the GST rebate and is built in to the purchase price of the condo and is for end-user buyers. On closing you may have to pay this back if you will not be living in the unit. Your lawyer can advise you on how this will work if purchasing for investment and after final closing you may apply to the government to receive this rebate back.
Waiving Superfluous Charges. Developers can be creative on your purchase agreements and add sur-charges and fees in relation to the property purchase. Your lawyer can negotiate to have these waived.
Closing Cost Caps. Putting a cap on closing costs and adjustments will protect you from being caught off guard with a shockingly high total at closing. Your lawyer should advise a cap on things such as development and education levies, surcharges and hydro/gas hook up. A “good” cap may range from $2500.00 to $5000.00 without these caps your closing costs could rise well over 10 thousand dollars.
Assignment Clause. An assignment clause allows you to sell the property prior to occupancy. If you are buying as an investment your lawyer will recommend this.
Investment Property Clause. Is this an income property? Most contracts state you cannot rent during the occupancy period. Be up front with your lawyer and be clear if this will not be you residence but an investment property. Your lawyer can request a clause which will allow you to rent this new property.
Variances in Square footage. Chances are the copy of your unit’s floor plan will not have Dimensions or footage listed, discuss this with your lawyer. In some instances you may get an 800 sq.ft unit instead of a 900 sq ft unit, your lawyer may be helpful in working out these variances with the builder. The Ontario New Home Warranty Act and TARION only state guidelines for this situation and no actual law, there for an agreement with the builder would be the only course of action.