Tag Archives: Condominium Act

cl_apr2018_consumer_prot_fi

Consumer Protection: A Cancelled Project Doesn’t Leave You Out of Pocket

Latest News


Consumer Protection: A Cancelled Project Doesn’t Leave You Out of Pocket

If you check out Toronto’s skyline, you’ll see cranes – lots and lots of cranes. They’re a sign of the times in today’s condo construction boom. While the frenzied market we saw for detached homes in 2017 has calmed down a bit, the demand for condos has continued to grow as people see them as the only affordable option.

While there seems to be no shortage of willing condo buyers, however, there is a shortage of preconstruction condos available for sale. Unfortunately, this is due in part to development projects taking longer than expected to be built, or some being cancelled altogether.

There may be many different reasons why some developments don’t ever get constructed – for example, the builders might lack sufficient capital or fail to obtain the necessary zoning or permits. Whatever the cause, a cancelled project can leave purchasers without a home to look forward to. The good news is that it shouldn’t leave them out of pocket.

Under the Condominium Act, if a condo project is cancelled, purchasers are entitled to receive their entire deposit back, including any payments made for extras and upgrades. This is because the builders are required to put these monies in trust or provide alternative acceptable security. If a project is terminated and for some reason the deposits and other amounts are not repaid by the vendor then condo buyers are eligible for protection from Tarion up to $20,000, plus certain accrued interest.

If you’re buying a pre-construction condo, there is always a risk that the project could be delayed or cancelled. There have even been cases where purchase agreements are terminated and then the condos are constructed at a later date.

That’s why it’s important for potential buyers to know that under the Ontario New Home Warranties Plan Act, a builder must attach an Addendum to every condo purchase agreement that requires them to disclose the status of the zoning approval and construction. It also limits what kind of early termination conditions that they can impose in the purchase agreement and obligates them to use reasonable efforts to meet these conditions before they can cancel the project.

There are consumer protections in place to ensure that all reasonable steps are taken to complete a condo project, but it is important to understand your rights as a purchaser if it does not. If your purchase agreement is terminated through no fault of your own, you should get your money back within 10 days. If you don’t, Tarion is here to help.

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. Tarion.com

SHARE  

Featured Products


THE LAWYER: Electric vehicles are here to stay

THE LAWYER: Electric vehicles are here to stay

Latest News


THE LAWYER: Electric vehicles are here to stay

by Zale Skolnik, Robins Appleby

Ontario is charged with the task of incentivizing electric vehicle infrastructure for condo owners and developers.

Electric vehicles are here to stay. But for Ontario’s ever-growing number of condominium residents, they may want to think twice before putting a deposit down on a Tesla.

Many developers marketing “lifestyle” condominium developments have already taken note of the trend towards electric cars. Electric vehicles lend themselves to the urban driving patterns and lifestyles of urban condo dwellers and the marketability afforded to a development by including electric vehicle compatibility and obtaining LEED certification, which is a selling feature (three additional LEED points are awarded to new buildings that install charging stations). In this respect, many developers are now characterizing charging stations as high-end amenities along with indoor pools and fitness facilities.

From both the attraction and retention perspectives, developers should be aware of the current needs of their prospective purchasers both now and into the future. This awareness is important, as installing the electrical infrastructure during the construction phase of a development avoids all of the financial, logistical and political issues arising from installing charging stations retroactively. But developers need to get creative — shared charging stations are not ideal and there is no mould for what percentage of spaces require electric vehicle parking, nor is there any way to predict who specifically will require an electric vehicle parking space. The best a developer can do is to provide owners with the option of easily installing a charging station in the future by providing the electrical infrastructure at the outset.

Problematically, however, purchasers are unwilling to pay for electric vehicle upgrades.

Currently, the existing Electric Vehicle Incentive Program only incentivizes electric vehicle owners with a rebate for the purchase and subsequent installation of a charging station in their home. The rebates are administered through the electric car purchase incentive and any rebate for installation of a charging station flows through to the owner of the car, not the developer that installed the charging station.

The provincial government is incentivizing electric vehicle ownership without incentivizing the construction of support for the electric vehicles. The province’s seeming misunderstanding of the issues at play have led to a situation whereby people want to buy electric cars because of incentives, but are reluctant to do so because there is no guaranteed infrastructure. It appears evident that owner incentives are just one half of the solution and that developer incentive programs should be initiated so as to provide developers with a reason to create the infrastructure and thereby ease prospective electric vehicle purchasers’ anxiety about not having a place to charge.

There are currently advocacy groups such as Plug’n Drive, which are lobbying the province for change. However, a lot of this change remains owner focused with electric vehicle owner rebate programs. Plug’n Drive has focused on various tenets of Ontario’s Climate Change Action Plan, which is a five-year plan stating specific electric vehicle targets for 2020. Among such tenets are the stated goals of ensuring charging infrastructure is widely available and requiring all new homes with garages to be constructed with plugs capable of charging electric vehicles. For the time being, the plan is fairly general in respect of how electric vehicle charging stations will be incorporated into multi-residential developments. However, there has been speculation that updates to the Ontario Building Code and the impending revised Condominium Act will address the need for newly built condominiums to provide for charging station potential.

With the recently released proposed regulations under the Condominium Act, there has been discussion concerning retrofitting existing condominiums with charging stations but little has been announced on requirements for new builds. The province engaged in a consultation process whereby feedback was collected and we hope to see something more concrete with changes coming into force later this year.

As architects of our future communities, developers are among the people best equipped to enable the increased use of electric vehicles by creating the infrastructure necessary to allow for the installation of charging stations. But to think that developers will create said infrastructure in the face of purchasers who are unwilling to pay for it is misinformed. With consumer demand evident and legislative changes on the horizon, hopefully the province takes this opportunity to incentivize infrastructure construction. Until those legislative changes occur, the horizon remains cloudy and emissions continue to pile up.

Zale Skolnik is an associate at Robins Appleby Barristers + Solicitors.

A version of this story first appeared in Ontario Homebuilder, Fall 2017.


SHARE  

Featured Products


Tarion

Tarion expands deposit coverage for new homebuyers in 2018

Latest News


Tarion expands deposit coverage for new homebuyers in 2018

Enhanced deposit coverage and new warranty protection for condo conversions

Ontarians hoping to take the leap into homeownership can buy with added confidence thanks to expanded consumer protection measures coming into force on January 1, 2018.

Purchasers placing deposits on new freehold homes will now have increased deposit coverage of 10 per cent of the purchase price, up to a maximum coverage of $100,000 with minimum coverage of $60,000. Previously, these buyers were only eligible for a maximum of $40,000 in deposit protection.

New homebuyers will also benefit from the recent passage of the Strengthening Protection for Ontario Consumers Act, 2017, which extends the deposit protection provisions to include other payments, such as those made for upgrades and extras.

Following extensive public feedback earlier this year, these changes will help bring deposit coverage in line with today’s new home market.

Coverage for down payments on condominium dwelling units will remain unchanged since these units benefit from significant protection under the trust provisions of the Condominium Act, which require all monies paid towards the purchase price to be held in trust. Additionally, deposits made for condominium purchases are protected up to $20,000 by Tarion.

For those looking to purchase converted condominiums, changes to the Ontario New Home Warranties Program mean that their units will now have warranty coverage. These developments, referred to as residential condominium conversion projects, or RCCPs, turn existing buildings into condos that incorporate some of the existing building’s more interesting features (e.g., large windows, framing, brick walls) into the design.

RCCPs will benefit from the same statutory warranty coverage extended to all condominium projects, including deposit protection, delayed occupancy coverage and the one-, two- and seven-year warranties. There is one exception: the first year warranty on work and materials will not apply to pre-existing elements (e.g., a foundation or exterior cladding). Under the new regulations, builders of condominium conversion projects and vendors selling units in these projects must also be registered with Tarion.

To learn more about the expanded protections, new homebuyers are encouraged to visit Tarion.com



SHARE  

Featured Products