From industrial to lofty condo conversions
Condos come in all shapes and sizes. Some buyers prefer slick, modern, multi-storey towers, while others are looking for buildings with more character and maybe a little history. If the latter is what you’re in the market for, there is good news for you.
In many urban areas, warehouses and other old industrial structures are often converted into condos that incorporate some of the building’s more interesting features (large windows, framing, brick walls) into the design. The industry term for these types of developments is “residential condominium conversion projects” or RCCPs. The features of a structure incorporated into an RCCP are called “pre-existing elements.”
Thanks to changes that took effect in January 2018, all of the warranties (One-, two- and seven year) included in the Ontario New Home Warranties Plan Act (ONHWPA) now apply to these types of condos with one exception: Any pre-existing elements – which, for example, might include an exposed brick interior wall – would not have the one-year warranty regarding the home being constructed in a workmanlike manner and free from defects in material.
Prior to 2018, RCCPs did not come with new home warranty coverage under ONHWPA because they weren’t entirely new buildings. But there’s still more good news. If you’re putting down a deposit on a condo unit that is part of an RCCP, you’ll be happy to know that you’re entitled to the same deposit protection and delayed occupancy coverage as other condo buyers. This means that your deposit, and any amounts paid for upgrades and extras, must be placed in trust and refunded in full if the project does not proceed. This should give you some added confidence that your money is protected if the unexpected happens.
Researching your builder is also easier. Under the new regulations, builders of RCCPs and vendors who wish to sell units in these projects must be registered with Tarion. This means that you are able to look them up on the Ontario Builder Directory on tarion.com.
So what happens if your rental apartment building is being converted into condos? These condos would not be eligible for coverage because the existing building was already built for residential living and converting the building doesn’t involve major changes. Most of the original components remain, with only minor changes made to the building.
This ONHWPA warranty coverage for RCCPs applies to projects where the first purchase agreement in the project is signed on or after Jan. 1, 2018.
If you have your eye on a new loft with a little more history to it, these changes will help you buy with confidence knowing that you now have a safety net. To learn more about this warranty coverage, you can visit Tarion.com or if you have questions, you can email email@example.com.
HOWARD BOGACH is president and CEO of Tarion Warranty Corp., a private corporation established to protect the rights of new homebuyers and to regulate new-home builders.