Last week we broke down some of the most commonly heard homeowner comments with respect to: What to ask your real estate lawyer when buying a new home. Here are a few more things to keep in mind when you find yourself sitting across from your real estate lawyer and are about to sign an Agreement of Purchase and Sale for your new dream home or condo.
I didn’t know that certain delays are not covered by the delayed closing warranty
If a builder misses the outside closing date in your contract, or does not properly extend other dates contained in your agreement, you may be eligible for delayed closing compensation from Tarion for up to $7,500. But there are some caveats to this warranty – one of which is based on whether the delay was unavoidable and out of the builder’s reasonable control.
In the spring of last year, new home builders across Ontario were impacted by a series of strikes held by framers and other industry trades. Since they could not hire a number of trades, work slowed and in some cases stopped. That had a ripple effect on other trades being able to work and even on the supply and delivery of materials. For some builders, that created what is called an “unavoidable delay.” A delay that, was beyond the reasonable control of the builder and was not caused or contributed to the builder, does not trigger the delayed closing warranty unless the delay is longer than the length of the unavoidable delay period. So long as the builder extends the closing dates appropriately, the builder can extend the dates in these circumstances without the consent of the purchaser and without having to pay delayed closing compensation.
I didn’t know closing costs would be so high
Not every cost to build a home can be predicted in advance. This means that builders need flexibility to make adjustments at the time of closing to manage unexpected costs. They are called closing costs, and have always been part of the new home buying process.
However, these unknown costs can create unexpected and unwelcomed surprises for new home buyers. That’s why, in 2012, Tarion made changes to the Addendum – attached to every Agreement of Purchase and Sale – that gives consumers better disclosure around closing costs. Home buyers can now view on one page all the potential additional cost items associated with buying a house or condominium. Tarion also required that developers distinguish between fixed costs and additional charges.
Still, there is still some estimation attached to identifying these costs and so knowing exactly what the closing cost figure will be is hard to guarantee. One option some buyers consider with their real estate lawyer is whether the Agreement of Purchase and Sale can stipulate that these costs do not exceed a certain amount or percentage.
An experienced real estate lawyer will provide a basic explanation to their clients about their warranty rights and responsibilities before they sign their Agreement of Purchase and Sale.
When I moved into my new home, my builder didn’t respond to me and I didn’t know where to turn
When buying a new home, your builder should be providing you with information about the statutory warranty at or before your Pre-Delivery Inspection (PDI). Almost all new homes in Ontario come with a seven-year warranty. It is the builder’s warranty. If your builder cannot or will not fulfill their warranty obligations, Tarion is here for you.
An experienced real estate lawyer will provide a basic explanation to their clients about their warranty rights and responsibilities before they sign their Agreement of Purchase and Sale, this includes deposit protection and delayed closing compensation.
Once you move into your home, your builder is responsible for meeting their warranty obligations. If your builder is not responding to you, call Tarion. We’re here to help new home buyers and homeowners when their builder cannot or will not.
Have a question? Contact Tarion.
- Always use an experienced real estate lawyer when buying a new home.
- Use Tarion as a resource while making the purchase. Visit Tarion.com to read tips for making the deal.
- Don’t wait until it’s too late – read up on your warranty rights and responsibilities before you sign on the dotted line! Get more information about your warranty coverage Ontario’s New Home Warranty and your warranty coverage.