If you have purchased or are thinking of purchasing a pre-construction condo in Toronto, then I’m sure you have plenty of questions. Here are a few common questions that I am asked by clients regarding purchasing pre construction real estate.
Q. Can I choose my parking spot and locker location?
A. If you have a disability or have a medical condition and need preferential parking then advice the sales rep at the time of purchase and they will try to accommodate you as much as possible. If you do not have a special requirement, then parking and lockers are assigned on a random basis.
Q. Do I need to purchase insurance for my condo unit?
A. The building insurance is provided by the condominium but owners must have insurance on their personal property, contents and any improvements that may have occurred that are above the standard finishing’s of the condo.
Q. How do I book the elevator for move in?
A. Contact the property management for booking the elevator. Many times, owners will have access to an Intranet where they can book items such as the elevator or party room, obtain parking passes, etc.
Q. What does interim occupancy mean?
A. Many people don’t know this but when you buy pre construction, there is a period of time where you may have to pay a fee called an “occupany fee” to the builder. This monthly fee is paid to the builder until the building registers with the Land Registry Office. You are able to occupy the unit during this period but technically do not own it yet, until the date of closing. This fee can be compared to rent as it does not go towards your mortgage and is based on the unpaid balance of the purchase price, estimated land taxes and estimated common expenses (maintenance fees).
Q. Are the Builder Agreement of Purchase and Sale documents standard?
A. No, every builder has their own agreement which was prepared by their lawyer so it’s important to have your lawyer fully review the document. Make sure all details are in writing and never rely on verbal agreements.
Q. If I sign an Agreement of Purchase and Sale for a pre construction condo can I change my mind?
A. After signing the Agreement of Purchase and Sale, you have a 10 day cooling off period (don’t confuse this with buying resale real estate, this is only for pre construction). During this time, have your lawyer review the documents and obtain the necessary financial confirmation that you need. If you decide with in the 10 days that you do not want the unit anymore, you are able to cancel the agreement and get your deposit back – but this must all be in writing. Once the 10 days passes, you are bound to the agreement of purchase and sale.
Q. Can the condo builder or myself ever terminate the agreement of purchase and sale once it has been agreed to and the ten days has passed?
A. Once and agreement of purchase and sale has been signed, the price of the unit agreed to freezes. If however the agreement includes an “economic liability” date and a certain percentage of sales has not been achieved by a certain date, then the developer can cancel the condo project.
Q. When can a builder start construction on the new condo project?
A. It maybe months or even years before the builder can begin construction, depending on when you signed the agreement of purchase and sale. Before the builder is able to start construction, there must be a certain percentage of binding sales agreements so construction really depends on how quickly the project sells. A lot of the time, the estimated occupancy date set out by the builder at the beginning of the project is a very optimistic timeline.
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