The purchase of a new construction home or condominium can differ from a property that is a resale. This is due to the fact that you are purchasing directly from the builder. The residential sector for the development industry is strong in Ontario. With the growing population and more residents moving outside the city, more new build development projects are expected to be completed to meet the province’s housing needs. However, purchasing a new construction home will come with additional obligations specific to the purchase of the new build. Outlined below is what to expect when considering purchasing a new construction home.

New Build Agreement of Purchase and Sale

New build Agreements of Purchase and Sale do not use the standard OREA form that is used in resale agreements. The ones provided in new construction homes are more descriptive and tailored to the developer. Included with the Agreement of Purchase and Sale are TARION Addendums which are added to include the following:

• Statement of Critical Dates
• Conditions
• Rights and Obligations
• Occupancy
• Termination Clauses
• Early Termination Conditions
• List of closing adjustments the vendor proposes.

With these additions, it is important to have a lawyer review everything as some Agreements of Purchase and Sale can shift time frames for review. As well, there are a number of clauses and conditions that can be reviewed, removed, and negotiated for the purchaser’s needs. Along with hidden restrictions for Purchasers before purchasing the home, there are some that could come into place upon taking possession of the home.

TARION

Ontario’s new home Agreements of Purchase and Sale include a Warranty by the Tarion Warranty Corporation (“TARION”). This regulates and enforces the Ontario New Home Warranties Plan Act (“ONHWPA” or “Act”). Most new homes fall within the purview of TARION; with this, TARION Addendums. These will consist of a Statement of Critical Dates, which outlines the terms of the agreement and two schedules. Schedule A, the first schedule, will list types of permitted termination conditions. Schedule B, the second schedule, will identify all closing adjustments that the Vendor intends to charge the Purchaser.

The Statement of Critical Dates is a crucial aspect of the new build agreement. Depending on the Firm Closing Date or a Tentative Closing Date, the Vendor could have the chance to extend the closing date numerous times. Similar to this is the Interim Occupancy Date which can be tentative or firm. This differs from the closing date as condominiums are generally available to occupy before the Vendor transfers ownership. If this happens, the Purchaser will pay Occupancy Rent until the closing date. If there are any delays in closing, there is compensation available through the TARION Warranty. This will come into effect after closing.

Schedule B Adjustments in a new build agreement differ from resale purchases where the adjustments include property taxes and other common expenses.

Purchasing a new home or condominium can come with lots of excitement. While there are new developments appearing every month, the importance of enlisting a real estate lawyer to thoroughly review your agreement of purchase and sale and other related documents is paramount.

If you have any further questions on New Build Construction Homes or would like to speak to someone about reviewing your New Build Agreement of Purchase and Sale, please contact Woitzik Polsinelli Lawyer Jonathan Dippolito at jonathan@durhamlawyer.ca Or you can call him at 289-220-3229 for assistance with this matter.

“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see or speak to a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”