Buying a pre-construction condo in Toronto is distinctively different from buying a resale condo.
Pre-construction deposit structure and payment schedule:
New condo purchases don't require a large upfront down payment.
Buyers usually can start with a smaller deposit.
Buyers can arrange variable payment schedules over a couple of years.
The seller of new condos is a corporation instead of an individual seller in the resale market.
Pre-construction condo closing costs are higher than that of the regular resales market.
The occupancy date may differ from the closing date.
Similar to the Status of Certificate, the disclosure statement is an important document prepared by the builder. It includes:
The rules and financial status of the corporation
The condominium’s features and amenities
The corporation’s declaration, bylaws, and budget for the first year after registration
It demonstrates that the builder has met all statutory requirements
Once the buyer receives a copy of the completely signed contract or the disclosure statement, whichever comes later, the buyer has a 10-day “cooling-off” period to reconsider the purchase.
Buyers often take occupancy before the home title transfer. They pay the occupancy fee until the corporation is registered and the title is transferred to the owner. The interim occupancy fee calculation is based on the interest of the unpaid balance, the estimated municipal tax, and projected common expenses.
You may encounter discrepancies between plans and actual construction, deficiencies in the common elements, delays in the schedule, or even the cancellation of the whole project.
The Ontario building code governs the detailed technical and administrative requirements and sets minimum standards for building construction in Ontario.
This act defines warranty coverage for new homes including the units, the common elements of a condominium corporation, and condominium conversion projects. The coverage includes:
Protection for deposits
Compensation for delays in closing or occupancy
Protection against unauthorized substitutions
One and two-year warranties for certain defects in work and materials
Seven-year warranty for major structural defects
Coverage for condominium common elements
The ownership change doesn’t impact this coverage, which means the coverage stays with the building itself as long it meets the requirement.
There are also other rules covering the deposit and compensation for consumers’ interests in the case of project delays and regulating how many times a builder can delay the closing in Ontario.
Those units with a better view, a nicer floor plan, and a higher floor are commonly allocated and sold well before the public opening. Hiring a realtor may help you source those premium units.
The realtor you hire gets paid by the builder. If you don’t hire a realtor, that commission may go to the sales team of the builder.
In a nutshell, a platinum agent is the first group of agents/brokerages chosen by the developers to sell their units. For every project, the number of platinum agents is normally limited to from 10 to 20.
In addition, you will be the first group to access the floor plan, promotion materials, project schedule, etc., which allow you more time to make the purchase decision.
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1. You have to be registered by the realtor with the builder at the very beginning. If you provide your name to the builder without mentioning your agent, then the builder is not obligated to pay a commission to your agent, and eventually, you leave a large sum of money on the table.
2. To protect your best interest, hire a good real estate lawyer to read through the thick volume contracts.