It can be challenging to navigate the new home buying process.
We are here to help - and have compiled a few tips on purchasing a pre-construction home or condo.
1. Research your builder
The Ontario Builder Directory (OBD) is an online resource that can help you confirm if your builder is licensed to build new homes in Ontario.
You can also use the directory to learn more about the builder – for example, how many homes they have built, what their claims history is and, in the case of condos, what projects are underway or have been completed.
A feature recently added to the OBD is Conviction Search, which allows you to see whether a particular company or individual has been associated with any illegal building convictions during the past 10 years.
2. Understand your purchase agreement before you sign
Your purchase agreement is one of the most important documents in your new home buying process.
This purchase agreement is a legal and binding contract between you and the vendor, so it is important that you have a lawyer review it, before you sign.
Your lawyer can also help you understand the Addendum attached to your purchase agreement, which includes closing dates and potential delays, closing fees and other possible costs. Your lawyer can also explain when your Agreement may be terminated and, if that happens, how your deposit will be protected under the Addendum.
3. Learn about your warranty coverage
Under the Ontario new home warranty and protection plan, all new homes have a warranty for, among other things, workmanship, materials, Ontario Building Code violations, water penetration and defects in your home’s structure and systems. The warranty coverage is broken into one-year, two-year and seven-year warranties and it is important to understand what types of defects and conditions are covered during each warranty period.
4. Prepare for your Pre-Delivery Inspection (PDI)
Before you take possession, you will have an opportunity to walk through your new home with your builder to make sure that nothing is missing, damaged or incomplete.
Review Tarion’s PDI Checklist before your walk-through, so you’ll know what to look for. The PDI Checklist is a general guide so you should add your own checkpoints based on your property and its unique details.
5. Extra tips for condo buyers
Buying a pre-construction condo is slightly different from purchasing a new house. Ask your real estate lawyer to inform you about your rights and responsibilities, including the following:
a. Cooling off period
If you are purchasing a new condo, you have an initial 10 days under the Condominium Act to cancel a sales agreement. During this time, make sure to review your purchase agreement and the disclosure statement.
b. Interim Occupancy
You might move into a new condo before the condo project is completed and registered. This is called interim occupancy. Make sure to ask your real estate lawyer about the following:
- Condominium ownership
- Monthly payment of interim occupancy fees
- Duration of interim occupancy
- Other rights and responsibilities during the interim occupancy period.
Following these tips will help take some of the worry out of the purchase of your new home or condo. Please share this with family and friends who are in the market to buy a new home in Ontario.