The Open Door Blog
Whether you own a new home or condo, are considering buying one, or just love to dream about it, the Open Door blog is here to share stories that can help you protect what is likely the biggest investment of your life.
The Open Door blog is published by Tarion, a non-profit corporation that administers Ontario’s New Home Warranty Plan and registers all new home builders in Ontario. Click here to learn more about us.
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Whether it’s your first time or you’re a repeat buyer, purchasing a new condo requires thorough planning and informed decision-making. So when you finally make your new condo purchase, you can feel at ease knowing you fully understand what you’re getting into.
To help you prepare, here are five things you should know before buying a condo:
1. Your investment comes with a warranty backstopped by Tarion.
Your new home warranty begins once you take occupancy, and that includes the one-year, two-year, and seven-year warranties that cover up to $300,000. This coverage includes everything from issues with workmanship and materials to major structural defects. Once your purchase has been finalized, read through the Homeowner Information Package – it outlines what you need to know about your warranty.
2. Your condo unit includes communal access to common elements.
Outside the boundaries of your unit are the common elements – which include shared-use spaces such as recreational facilities, parking garages, and party lounges.
Common elements are protected by a separate warranty that starts once the condominium corporation is registered. Unsure of what the boundaries of your unit are? That information is found in the disclosure attached to your purchase agreement.
3. If you experience delays, you could be eligible for compensation
In your purchase agreement, your builder must provide an occupancy date – the date your condo will be ready for move-in. If your builder is unable to meet or extends the specified date, you may be eligible for delay compensation. Review the addendum attached to your purchase agreement to understand how occupancy dates may be extended and under what conditions your agreement may be terminated.
4. The date you can move into your condo isn’t the date you take full ownership
The period between when you can move in and when you officially own your condo is known as interim occupancy. Once the unit is determined by the municipality to be ready for occupancy, your builder will let you know the date on which you can take interim occupancy. The interim occupancy period can typically last between two to three months, or more, until your purchase closes and you take title.
During the interim occupancy period, you must pay a monthly fee to the builder. This fee covers interest on the unpaid balance of your unit, estimated municipal taxes for the unit, and maintenance expenses.
5. If the condo project is cancelled, your deposit is protected
When buying pre-construction, there’s always a risk that a project could get cancelled. However, under the Ontario New Home Warranties Plan Act, every purchase agreement requires an addendum that discloses the project status. It also limits the early termination conditions that can be imposed and obligates builders to use reasonable efforts to meet the required conditions before cancelling a project.
If a project gets cancelled, buyers are entitled to receive their deposits back. This includes any additional monies paid for upgrades or extras. Under the provisions of the Condominium Act, deposits must be placed in trust. If payments are not refunded in the event of a cancellation, purchasers can make a deposit refund claim to Tarion for up to $20,000.
Buying a new condo is exciting, but it’s a big decision. That’s why it’s important to learn about the process, what your rights are and what questions to ask. No matter your level of experience with the home-buying market, we’re here to help. If you still have questions, don’t hesitate to contact us.
The goal of this blog is to provide you with general information about the warranty process by sharing real experiences from new homeowners. The blog should not be relied upon as legal advice. For privacy reasons, we will not address or resolve current cases in a public forum, so any comments or questions that are posted on this site that describe individual cases cannot be discussed. If you have a question about your warranty or Tarion generally, we would be pleased to discuss your issue, in the context of your particular circumstances and in confidence. We exercise reasonable care to avoid offensive, illegal or defamatory content from being posted, as well as comments that are intended solely for self-promotion or considered to be spam.