Report: Questions to Ask a Real Estate Lawyer
When Buying a Newly Built Condominium
If you’re in the market for a new condo, your real estate lawyer can be a good source of advice and of important information about your warranty rights and responsibilities.
Before you sign your Agreement of Purchase and Sale — a critical first step toward becoming a condo owner — here are a few common questions to ask your real estate lawyer:
1 Is my entire deposit protected?
Under the Condominium Act, the whole deposit must be held in trust or alternate security provided. So, your entire deposit is likely protected in the event that the builder cannot complete the project. Tarion provides deposit protection of $20,000 in the rare instance where trust money is improperly released.
2 Why is it taking so long to build my condominium?
Condominium projects can take a long time to build. To better understand the anticipated timeline for your condo, carefully review the Addendum to your Agreement of Purchase and Sale with your real estate lawyer. Here’s what to look for: On page one of the Addendum, you’ll find a few key dates:
- The first date (listed as either “Firm” or “Tentative”) is called the “Occupancy Date.” Think of this as the builder’s first and best estimate for when your condo will be ready for occupancy. With proper notice, this date can be moved by the builder.
- The second date is the “Outside Occupancy Date.” This is the builder’s estimate for completion in the event there are unanticipated delays. This date cannot be moved unilaterally by the builder because it is a firm commitment and is usually set years in the future.
On page two of the Addendum you’ll find information on the status of the project at the time of signing. For example, the builder must check off if he/she has obtained formal zoning, and if construction has commenced. If neither of these boxes are checked “yes,” the project may be years away from completion. Keep in mind, however, that money held in trust doesn’t get released until the project gets finished.
3 Are upgrades covered by my warranty?
Almost all new condos in Ontario are protected under warranty. But that warranty only covers what is contained in your Agreement of Purchase and Sale. Extras — such as upgrades that are not included in your contract — will not be covered under the warranty. What’s more, anything agreed to on a handshake or verbal promise will not be protected. So if you request additional items, work with your real estate lawyer to make sure everything is in writing!
For more tips for condo buyers and to learn more about new condo warranties, visit Tarion.com