So you just bought a new Condominium?

Purchase of a New Construction Condominium:  

If you’re from the Greater Toronto Area, or the surrounding suburbs, you have no doubt noticed the influx of new condominium projects popping up on every corner. 

Buying a condominium is completely different than buying another type of property.  Buying a new condominium has its own considerations.  If you have decided to purchase a brand new condominium, either for yourself, a family member, or for investments purposes there are a few things you should know. 

10 Day Cooling Off Period

In Ontario, the Condominium Act provides purchasers with some protections.  It also places some obligations on builders.  When you purchase a new condominium in Ontario you have 10 days to rescind or cancel your agreement, if you choose to do so.  This right to rescission is often called the “cooling off period”*.  This can be for any reason, and you do not have to provide your reason to the builder.  Your deposit is returned, and the deal is cancelled.  The clock starts to run from the time you receive a signed Agreement of Purchase and Sale or the Disclosure Statement (whichever is later). 

What is a Disclosure Statement?  Blue Print Disclosure Statement

In Short, a Disclosure Statement describes condominium project.  It will tell you whether the condominium is freehold or leasehold.  Whether the project is new, or converted from another use.  Whether there will be any commercial units.  It will describe the amenities. 

The Disclosure Statement will also provide the proposed declaration, bylaws, insurance trust agreements, and financial details including a budget. 

SURPRISE! There are hidden fees and information buried in the fine print

Clauses and provisions are buried in the Agreement of Purchase and Sale and Disclosure Statement for additional levies and fees that are often not fully discussed when you are signing on the dotted line.  These levies and fees can be for various things such as paving the driveway or installing utilities.  The levies and fees vary from one builder to another.  Many purchasers are often surprised when it comes time to close the deal on their condominium, and the price has now increased by several thousand dollars. 

In addition, these documents may have clauses that tell the purchasers that the building is adjacent to a landfill or train tracks.  These can be an unpleasant surprise when you realize that the condominium unit you purchased overlooks a landfill. 

Generally speaking, if the builder has provided you with the information that they are required to provide by law, and you choose to do nothing during the 10, “cooling off” period, litigation will likely be unsuccessful. 

Why it’s important to hire a lawyer to review these documents

If you’re like most buyers, you have never seen these documents before.  It’s easy to get caught up in the excitement associated with a new purchase.  It’s important not to let this excitement overshadow the important steps you take to protect your investment. 

If you are buying a new condominium unit, it is important to have an experienced real estate lawyer review all the documents, so you know exactly what you are purchasing, and to protect your investment. Contact us today.  We can negotiate with the builder, to delete or cap some of the levies and fees. 

 *Note, this “cooling off” period does not apply to resale condominiums. 

 

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