So, you are thinking of buying a new condominium?
Below is some basic information you may need to find out before making a purchase.
Check with the developer and municipality about construction plans in the neighbouring area. Is the building part of a larger complex? What are the plans to build other structures, such as a high-rise, nearby? Could new buildings change the view from your unit significantly?
Be clear about what is and isn’t included in the purchase price so you can compare overall costs with other condominiums. For example:
- Are there amenities, such as pools and parking, and how are they paid for?
- Are finishes in the units included in the purchase price?
- Are there other charges over and above the purchase price you should be aware of?
- Are utilities (gas, electricity and water charges) covered in the monthly condominium fees or are they separately metered? (You don’t want to end up paying part of your neighbour’s utility bills.)
Verify, as best you can, that your monthly condo fees are realistic. Condo fees often increase after the condominium’s first year of operation because the developer may have agreed to pay for certain expenses in the first year, such as a concierge’s salary, but not in the second year. Fees can also increase after the first reserve fund study has been completed.
Investigate whether there are any “hidden” costs. For example, some developers take out long-term leases on building fixtures, such as furnaces, to save on capital costs. These costs are inevitably passed along to owners.
Check if the unit comes with a new home warranty, which ensures that the building is properly constructed and meets legal regulations. You should know what the warranty covers and for how long. Coverage on major components can run for as long as five to seven years after a building is completed. For more information on new home warranties, see CMHC’s online guide
Evaluate the current state of the construction project. Is it likely that the project will be completed by the date set out in the purchase agreement from the developer? It’s important to assess this before making your moving and financing arrangements. There can be an unexpectedly lengthy wait before a new condominium project is completed and you can move in.
Request a “disclosure statement” from the developer in those jurisdictions where legislation stipulates a developer must provide you with one before the sale agreement is binding. A disclosure statement will give you some indication of the rules, regulations and financial situation of the condominium corporation before you buy and includes, among other things:
- a summary of the condominium’s features and amenities;
- the condominium’s governing documents; and
- the condominium’s budget for the first year after registration.
Find out if your purchase agreement lets the developer extend the occupancy date. This is especially important if you are making arrangements to vacate your existing home by a specific date based on the original closing date. You should also check your provincial or territorial homeowner protection legislation to learn your rights if your agreed-upon occupancy date is missed.
Consult with your Real Esate Representative & your Lawyer before signing any documents.
If you need help call Kashif Siddiqui your real estate Professional @ 905 330 8556 e-mail email@example.com