FOUR PHASES IN BUYING NEW CONDOMINIUMS:
- Pre-construction Phase
- Construction Phase
- Interim Occupancy Period
- Title Transfer (Final Closing)
DEPOSITS
- held “in trust” by developer’s lawyer
- deposits are fully insured
- interest is paid from date of deposit to occupancy at Act prescribed rate
- NSF cheques are subject to administrative fees
TITLE
- Can be assigned to immediate family wihtou penalty
- Assignment Clause reuqired for non-family, but assignee remains responsible for closing on unit if assignor defaults
HST
- Included in the purchase price if you are an owner-occupant
- Investors are responsible for paying rebate portion on final closing, but can apply to CRA for full refund after leasing unit for 1 year.
CONDOMINIUM DISCLOSURE STATEMENT
- Disclosure Statement
- Budget Statement for Year 1 operations
- Proposed Declaration
- Proposed By-Laws
- Proposed Rules
- Proposed Management Agreement
- Preliminary Draft Plan of Condominium (excluding parking levels)
- Defines what items are considered part of your unit and what items are considered part of the common elements
- Defines how common element fees (maintenance fees) are calculated
- Names the Property Management Company for Year 1
- Details how the condominium corporation is to operate and make decisions
FINISHES & COLOUR SELECTIONS
- Developer has right to substitute material of equal or better quality as materials may become discontinued from time of pre-sales to contruction
- Colour selections typically start 12 months prior to occupancy
- Upgrades and pricing are usually not available until colour selection time as availability of materials and pricing at time of pre-sales may change by the time contruction commences
- Upgrades are usually payable 100% at time of selection
INTERIM OCCUPANCY PERIOD
- Period between possession of the unit (occupancy) and title transfer date (final closing) when your mortgage kicks in and you become the legal owner
- Occupancy Fee is payable to Vendor during this period, calculated as:
- interest in unpaid balance of purchase price, plus
- estimated municipal realty taxes
- common expenses (maintenance fees)
- Occupancy fee does not go towards your mortgage
- Occupancy period varies, but typically 3-6 months
- You cannot lease your unit during occupancy period, unless you have signed an Authourization to Lease with the Developer
TARION WARRANTY CORPORATION
- all new home builders are required to be registered with Tarion Warranty Corporation
- all new homes proctected under Ontario New Home Warranties Act
- includes protection for deposits, workmanship and delays
- 1-year warranty: units to be constructed in workmanlike manner and free from defects in materials
- 2-year warranty: covers water penetration of building envelope; electrical plumbing and heating systems; and exterior cladding
- 7-year warranty: covers major structural defects
- all deficiencies documented at Pre-Delivery Inspection (PDI) on Tarion Certificate of Completion and Possession Form
CLOSING COSTS
- Land Trasnfer Tax – Ontario + Toronto
- Adjustments, which are determind at Title Transfer Date (final closing), but may be “capped” if requested
- Adjustments includes:
- realty taxes estimated from Occupancy to Title Transfer Date
- PST on chattels (i.e. appliances)
- new taxes imposed by government
- increase in development and/or education development charges
- Tarion Warranty Corporation enrollment fee
- Park Levies imposed by government
- utility meters and connection charges
- HST (if non-owner occupant)