Once you have signed your deal, the Condominium Act provides that you have ten days from the latter of either the date you receive the disclosure statement or the date you receive an offer executed by the builder, to rescind the deal. This gives you an opportunity to see your lawyer, get suggestions, changes and explanations and then within the ten days return to the sales office and negotiate for those important items that are open.
Your lawyer will explain to you that in most offers, the following are standard:
- Measurements of space are made from the exterior of outside walls and half-way through the demising walls, so your condo square footage is not usable area but total area
- The builder can substitute materials of equal or better quality
- Bulkheads can appear where you least expect them
- Layouts can vary
- The builder can add, remove or rent units
- You may end up with a reverse floor plan
- Colour, textures and materials may vary
Your lawyer will examine the adjustments section of the offer, review each adjustment and make suggestions as to what parts you should try to delete and those changes you need to cap (such as levies, GO transit, development charges, connection charges).
Another important thing to remember is that the offer is different from freehold because you have two closings. The first closing is the occupancy closing date, the day you move in. Until the condominium is registered you are paying money to the builder that does not reduce your principal on the mortgage. It is like rent and is a total of the interest on the outstanding balance of the purchase price plus your proportionate condominium common expenses. The second closing date is the day that title is turned over to you. This is the date you pay the balance of the purchase price, own your condo, register your mortgage. It may be anywhere from the same day as occupancy to a year or more later. Your lawyer should review the offer and tell you what the real, fully extended occupancy date will be. It can vary up to two to three years down the road.
Your lawyer should keep an eye open for those tricky clauses that builder’s lawyers sometimes include allowing for cancellation of the offer based on the builder’s perception of “economic viability”. Make sure there is a measuring stick for this clause that is fair to both sides.
Another important issue relates to your disclosure documents and how you read them. Remember that great big pile of documents you received when you signed the deal? The Act requires that the builder provide you with a number of documents so you know what is really the going on with that new condominium before it is too late. They include the Disclosure Statement, and the documents that go with it being; a Budget statement, a Proposed Declaration, the Proposed by-laws, a Proposed Insurance Trust Agreement, a Proposed Management Agreement, Proposed Rules and the Proposed Condominium Plans. A condominium real estate lawyer can explain how to read and understand these documents.
Now you go back to the builder with your changes, get the necessary amendments and now you formerly retain the lawyer. This means you get a contract in writing. This contract, called a Retainer, sets out what services the lawyer will provide, how much it will cost and what is included in the fee agreed upon.
For the occupancy closing your lawyer will ensure all documents and funds are processed and assist you in a smooth transition to your possession. On final closing, your lawyer will search the title, prepare all necessary documents, issue your title insurance policy, process and register your mortgage and handle all the details necessary for the closing of your deal.
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