There are various financial complexities that come with a home purchase. Understanding the associated costs is crucial in determining the steps you should take in your real estate transaction. This article provides a comprehensive overview of closings costs, including mortgage and property-related fees. These costs can add up quite quickly, so it is important to educate yourself of these costs before stepping into a real estate transaction.
Closing costs are the administrative and legal fees associated with a real estate transaction. These costs can vary significantly depending on the property’s location, mortgage loan amount, and the mortgage provider. Here is a brief closing cost breakdown to provide you with a little homebuyer assistance.
Title insurance: If you intend on purchasing your property with a mortgage, one of the conditions in your mortgage commitment will require that you obtain a title insurance policy. This is a one-time fee paid at closing and the policy remains active throughout the duration of your home ownership.
Land Transfer Tax: This tax is payable for any purchase of real estate, including condominiums, cooperative apartments, and vacant land in Ontario and other provinces. The amount of the tax increases as the purchase price increases. Some cities, such as Toronto, also have a municipal Land Transfer Tax.
Home inspection fee: The buyer is expected to cover the cost of home inspection. Home inspection is not required but it is highly recommended as they often reveal major structural issues that the buyer should be aware of before completing the transaction. These issues are usually not simply noticed by walking through the house with a realtor.
Survey fee: Mortgage lenders typically require a land survey to be presented by the seller to the homebuyer. If a survey exists, it will be handed over to you by the seller. This is a map of a property’s boundaries outlining the beginning and end of a property’s borders. If the seller does not have a survey, the homebuyer may be required to pay for one.
Legal fees: These fees cover services such as title searches, contract reviews, and document preparation, which are provided by the real estate lawyer. They vary depending on the complexity of the transaction and the expenses involving title insurance, land registry fees, and courier fees that the lawyer incurs while representing you on the transaction.
Homeowners Insurance: Securing home insurance coverage is vital for your property. It is essential for you to obtain home insurance coverage effective as of the proposed closing date and it is a necessary cost for closing. If you are obtaining a mortgage, your lender’s interest as first loss payee must be noted on the property. Prior to closing, we must receive a copy of your policy or binder letter.
Pro-rated property taxes: When buying a new home, your lawyer will confirm that all of the seller’s expenses have been covered up until the closing date, including property taxes. If the seller is not up-to-date with the property taxes, they must pay the outstanding balance to the municipality. However, if the seller is ahead and paid the taxes for the year, the buyer must reimburse the seller for the amount paid between the closing date and end of the prepaid period.
Home appraisal fee: A conventional mortgage requires the order of an appraisal on the home being purchased. This mortgage-related fee is for lenders to verify that the property you are securing a mortgage against is worth the value being paid for it. By conducting an appraisal, lenders can provide you with accurate loan estimates. Going forward, any mortgage refinancing done on the property would be subject to a home appraisal fee as the value of any home changes over time.
PST on CHMC-insured premium: CMHC (Canada Mortgage and Housing Corporation) Insurance protects lenders if borrowers ever default on their mortgage. This is required if you are not able to make a down payment of 20% or more on the home you wish to purchase. This cost is added to your mortgage and paid over the course of the mortgage loan. However, there is a Provincial Sales Tax (PST) associated with CHMC that must be paid for upfront. In Ontario, the PST on CHMC Insurance is 8%.
For example, if the CHMC Insurance Premium is $6200 with the 8% tax rate in Ontario, the PST owed would be $496. This would be paid on closing day.
This article provides you with a concise summary of some of the general costs associated with the purchase of a home. However, there may be fees subject to your particular real estate transaction. On the day of closing, your lawyer will guide you through the Statement of Adjustments as well as the Trust Ledger Statement, which will provide you with an accurate picture of the costs associated with your transaction.
The statement of adjustments outlines a list of debits of amounts already paid (such as the deposit) and a list of credits (such as the purchase price and prepaid fees on the property). The credit column subtracted from the debit column provides you with the amount owed to the seller on the closing date.
The trust ledger takes the amount you owe to the seller and outlines how the amount is allocated. The list of credits includes the loan amount from the lender and your down payment. The list of debits outlines where all of that money is going and how it will cover the different closing expenses.
Buying a home is a significant life decision and it is important that buyers do not walk into this decision blindsided. Navigating the closing costs associated with purchasing a home can be complicated, which is why you require the expertise of a real estate lawyer to guide you through the process. At Bradshaw & Mancherjee, we provide you with the support and knowledge you need to make informed and confident decisions about the purchase of your home.
A recent phenomenon that we are starting to observe in the real estate market is the brutal state of condo assignment sellers. An increasing number of pre-construction condo assignors in the GTA are facing major difficulties in closing deals. This shortfall is triggering a sell-off, with unit prices dropping and sellers losing all of their deposit and more! First of all, what is an assignment sale?
An assignment sale is a type of real estate transaction that with pre-construction properties. This is where the original buyer transfers their rights and obligations under the Agreement of Purchase and Sale to a new buyer, before closing or taking possession of the property. The new buyer then steps into the original buyer’s position and completes the deal directly with the builder.
In a market where all odds are against the assignor, it is important for assignors to be aware of the heavy competition surrounding them. There are desperate assignment sellers who bought units that they cannot afford to close and there is more assignment inventory than there has ever been. To top it off, there are even more resale condos on the market than there has been in the past decade. That means the only way to succeed at an assignment sale is to make the unit better priced than other competing assignment listings AND the resale market. This surge in assignment availability has driven unit prices to take a major plunge below the original purchase price. Consequently, assignment sellers are often forced to accept significantly lower offers than anticipated. Not only failing to make profit but facing extensive loss out of their own pockets.
The interest in assignment flipping really escalated after the year of 2020 due to its belief of high profitability. Stories of people making hundreds of thousands of dollars without closing between 2018-2020 circulated through the market. Family, friends, and realtors passed along such anecdotes gambling their interests without being fully aware of the risks involved.
In the midst of this dilemma, appraisals are serving as the safety blanket for newly completed condo units, providing them with value and allowing people to close. When observing the prices of resale condos between the years of 2018 to 2024, it can be seen that the price per sqft remains the same, that is $1000/sqft. That is zero nominal change in a period of six years! This is a whole building cycle for pre-construction properties. Pre-construction condos purchased in those years are worth way more than $1000/sqft with closings coming up in 2025 and onwards. In this situation, if appraisals don’t come in, then the average investor would not have hundreds of thousands of dollars to make up for the substantial shortfall.
Another trend that we can observe in the preconstruction market is the steep decline in projected completions as presales are not happening. The only people active in the preconstruction market right now are end users, people who are buying to downsize or upsize. However, it is worth pointing out that end users only make up 20-30% of the pre-construction buying pool and the rest are investors. This is because end users don’t want to wait 5 or 6 years for their unit to complete, so they are more active in the resale market. Less investors active in the pre-construction market means that there will be much less project completions in the future.
What does this mean for the real estate market? This means that we have a real supply issue for the future if our population continues to grow at this rate, as the fastest growing metropolitan area in North America. However, waiting for this demand to play out is not a solution for the dilemma in assignment sales today. This phenomenon may take longer than expected to come to play.
Assignors are backed into a corner in the situation of today’s market. Assignors are forced into a situation of selling at a loss, and refusing to sell at a loss means that they are forced into closing as the buyers of the unit. Either way, assignors in the pre-construction condo market are finding themselves in a tough spot.
With the dynamic nature of Ontario’s real estate market, things do not always go as planned from the initial agreement to the final closing. However, it is important to remember that the Agreement of Purchase and Sale is a legally binding contract. This means that there are legal implications for all the parties involved when certain parties choose to withdraw from the agreement. Depending on whether they are the buyer or seller, parties are vulnerable to significant legal and financial consequences. This article will uncover the legal and financial consequences facing sellers who choose to withdraw from real estate contracts as per Ontario real estate law.
Seller’s remorse is a real phenomenon. It happens when the seller believes they made a mistake in selling their home. They may face regret for not making enough money from the sale of their property, missing their old neighbourhood, or simply just regretting the decision to sell in that particular point in time. The court’s response to seller’s remorse is not generally a favourable one and it is not a legally recognized reason for breaching an agreement. In these circumstances, sellers may face legal disputes or financial penalties.
In order to understand legal implications, one needs to understand the legal footing of real estate contracts in Ontario. Upon signing the property sale agreements, both the buyer and sellers are obligated to fulfil the terms outlined in the contract. The primary duty of the seller is transferring the ownership of the property to the buyer by the stated closing date. Further duties of the seller are outlined in the contract for the period of due diligence, from when the contract is signed up until the closing of the property. During this period, the buyer is given an opportunity to conduct an appraisal, a title search, organize their mortgage, perform property inspections. Meanwhile, the seller has the obligation of maintaining the property in the condition it was agreed upon for closing, providing access for inspections, clearing encumbrances, and conducting agreed-upon repairs or modifications on the property before the closing date.
Sellers backing out of an APS face detrimental consequences for contract cancellation. Ontario property law is sincere in upholding its duty of protecting both buyers and sellers’ rights in real estate transactions. During a real estate closing, seller obligations must be upheld to avoid seller penalties. When the seller breaches the agreement, legal recourse is readily available to the buyer. This could involve potential lawsuits for damages, specific performance, losing the deposit, or reimbursement costs involved in the execution of the agreement of purchase and sale. A buyer has the right to seek damages from the seller in courts, where the seller would owe monetary compensation for any losses incurred by the seller’s contract termination. By requesting specific performance, buyers can have the court forcefully order the seller to sell their property in honour of the purchase and sale agreement. Buyers can also have the costs involved in the property purchase process recovered at the expense of the seller if the closing process cannot be completed due to the seller. Such costs include inspection fees, legal fees and moving costs.
The breach of a real estate contract is not immediately sent to court for resolution.
Real estate disputes that occur through contract breach are usually first attempted to be resolved through negotiation between the buyer and seller. There may be a possibility that the parties themselves come to a compromise that prevents the breach of the agreement.
Next, to avoid the time and expense of a court case, the parties may reach a settlement through mediation, where a neutral third party helps to facilitate a mutually agreeable resolution.
Finally, If the conflict fails to be resolved through mediation, parties may decide to proceed with court litigation. This is when courts will intervene and decide the consequences depending on buyer’s rights and seller’s rights outlined in the law and with the consideration of the terms in the agreement of purchase and salw.
To prevent seller’s remorse and the significant legal and financial repercussions that sellers may face in breach of contract, there are some basic steps you can take:
We can help you!
Fortunately, these are all precautions that our legal team at Bradshaw & Mancherjee would be happy to assist you with. Our proficient experience in the field of real estate law means we specialize in protecting both sellers and buyers.
With our meticulous attention to detail, we will review your contract for potential contract contingencies, negotiate terms that safeguard your interests, and represent you in disputes that may arise in the course of your real estate transaction. Bradshaw & Mancherjee offers strategic advice and legal solutions tailored to protect sellers’ interests and navigate complex contractual obligations in Ontario.
By working with our team of professionals, you can make confident real estate decisions every step of the way. For any inquiries you may have or to schedule an appointment with one of our expert legal professionals, please feel free to contact us.
The Ontario real estate market is dynamic and constantly changing. Navigating the intricacies involved in open bidding and real estate auctions requires a thorough understanding of the underlying legal framework. We help buyers, sellers, and investors make informed and confident decisions. The expertise and comprehensive legal guidance provided by our lawyers at Bradshaw & Mancherjee will help you succeed in the competitive real estate arena. This article explores the dynamics of open bidding and auctions surrounded by the complexities of Ontario real estate law and essential tips for thriving in this competitive market.
All real estate transactions involving the purchase, sale, and leasing of properties are governed by Ontario real estate law. This law ensures fair and transparent transactions between buyers and sellers through a wide range of regulations. Whether you are a first-time homebuyer or an experienced investor, understanding these laws is essential for all of those who participate in the field of real estate.
Open bidding in real estate is when an offer for a property is proposed by potential buyers and accepted by potential sellers through a transparent bidding process. In contrast to closed bidding, open bidding allows for potential buyers to be aware of all competing bid details, including the purchase price, financing, market activity and terms. Potential buyers are given the opportunity to make informed adjustments regarding their offers accordingly. With increased transparency, a real estate competition is fostered, and this often causes a surge in sale prices of properties. True market demand is demonstrated, providing sellers with a realistic idea of their property’s value.
High-demand properties may utilise the method of real estate auctions for property sales. In a real estate auction, properties are sold to the highest bidder through a competitive bidding process open to the public. These auctions take place in-person or online and consists of the participation of bidders, auctioneers, and sellers. Successful auction strategies require an understanding of certain dynamics in the auction process such as the reserve price, bidder behaviour, and auctioneer’s role. The reserve price is the minimum price that the seller is willing to accept from potential bidders. Bidder behaviour, that is the way bidders interact with one another and strategize, creates the atmosphere of the auction. The auctioneer is responsible for managing the process, ensuring the rules are followed, and encouraging bids from bidders.
Auction houses are the establishments that facilitate the sale of real estate properties. Understanding auction house procedures can help you be prepared and navigate the process effectively. Some important procedures that take place within the auction house include:
While both open bidding and auctions involve competitive bidding, there are some key differences between both methods. They vary in transparency, where open bidding is completely transparent, but auctions may or may not publicly reveal all bids. Auctions are fast-paced and conclude in a short period of time, but open bidding can continue over multiple days or weeks for a particular property.
How to handle bidding wars in real estate
Bidding wars are a common phenomenon in competitive real estate markets like Ontario. Successfully navigating a bidding war requires a clear strategy and the ability to remain calm under pressure. Below we offer some quick buyer and seller auction tips that you can use in bidding wars.
There are strict regulations put in place to govern Ontario property auctions and ensure fairness and transparency in transactions. The auction law in Ontario is enforced by the Real Estate Council of Ontario (RECO). This body oversees the regulation of real estate auctions, ensuring compliance with the Real Estate and Business Brokers Act (REBBA). These rules cover the conduct of auctioneers and outline the rights and responsibilities of buyers and sellers. Some of the aspects dealt with in these auction regulations are the disclosure of property information, the setting of reserve prices, and the management of deposits and payments. Being a participant in the real estate bidding process makes it essential for you to understand the legal implications of your actions. This includes knowing your rights and obligations for property bidding in Ontario, understanding the terms of the sale, and being aware of any circumstances that may affect the transaction.
Our lawyers have extensive experience in Ontario real estate law and have the expertise to guide clients through the intricacies of auction dynamics. We will guide you through all the legal aspects of bidding that you need to be aware of to make confident and well-informed decisions. For example, one of these aspects are disclosure requirements, which require all the relevant property information to be provided to potential buyers. Auctioneer conduct is governed by such regulations, where auctioneers must have a valid license and they must act according to specific ethical standards. There are also particular bid handling rules that entail how bids are received, recorded, and accepted. From understanding real estate auction rules to developing auction strategies and giving you great real estate bidding tips, we ensure that you are empowered to make informed decisions to achieve your real estate goals.
Achieving success in real estate bidding requires the right expertise and guidance. Our team of professionals can assist you in making informed decisions and help you secure the best possible outcomes. Contact Bradshaw & Mancherjee today to learn how our specialized real estate lawyers can assist you in the competitive Ontario real estate market.
Buying a home? Congratulations! It’s exciting, but there is a lot of documentation. A notary public is essential to the success of your real estate transaction.
Every detail matters in real estate transactions, from the first contract to the last important exchange. Notary services are essential to guaranteeing the security and legality of these transactions. Due to the intricacy of real estate transactions in Ontario, notaries are frequently needed to formalize and verify the multitude of papers needed.
Let’s check the role of notaries and highlight little-known but important details of real estate transactions.
Notaries public are licensed legal professionals in Ontario who can witness signatures, confirm the parties’ names, and give legal standing to documents including mortgages, powers of attorney, and deeds. They protect against fraud and forgery by signing and sealing the documents with their official seal. This is especially important when there is a lot on the line, such as when large amounts of money or valuable property are being transacted.
Although notary services are provided by banks, they are often restricted to transactions involving specific clients. Independent legal professionals are recommended for comprehensive real estate transactions, which require unbiased legal oversight. These lawyers guarantee that all legal obligations are fulfilled without any potential conflicts of interest that may occur in a banking setting.
In Ontario, the lawfulness of remote notarization has changed, especially because of the current trend toward digital alternatives. These services combine the ease of remote processing with the security of in-person notarization. They are especially helpful for those who are unable to visit in person. However, in-person notarization may still be necessary for some essential documents to satisfy particular legal nuances, particularly those involving large transactions like real estate.
Ensure your documents are legally binding and compliant with professional notary public services. The cost of notary services varies according to the kind and quantity of papers.
A notarization, including the notary’s stamp and signature, costs $37.99 plus HST for up to 20 pages requiring a single notarization. Although some could argue that these costs are unnecessary, they are essential for comprehensive legal verification and provide a level of protection that exceeds their expense. These are usually simple fees that are expected to be included in the closing expenses of a real estate transaction.
Our experienced team provides comprehensive document certification and notarization services at competitive prices. Book your notary appointment today to secure the authenticity and legal validity of your important documents with ease.
For more details on the costs involved in purchasing a new home, visit our page on New Home Cost.
Using notary services in North York has several benefits. They guarantee that:
The likelihood of future legal disputes arising from property ownership or terminology misunderstandings is greatly decreased by this procedure.
Here’s a list of typical documents that commonly need a notary’s touch:
Notaries help make sure these important documents are done correctly and are legally binding. This prevents fraud and makes sure the document can be used in court if needed.
A real estate transaction’s closing phases are crucial. For example, notarizing the closing paperwork guarantees the legal recognition of the property transfer. Clients may plan their relocation more effectively if they are aware of the key collection timeframe and process, which are explained in ‘When do I get the keys?’ Hiring a skilled notary is essential since delays in notarization might cause relocation plans to be affected by the delivery of keys being postponed.
A real estate transaction’s closing phases are crucial. For example, notarizing the closing paperwork guarantees the legal recognition of the property transfer.
Clients may plan their transfer more effectively if they are aware of the main collection timetable and procedure, which were previously explained. Hiring a skilled notary is essential since delays in notarization might cause relocation plans to be affected by delayed delivery of keys.
Without an experienced notary, navigating the intricacies of real estate transactions can leave parties vulnerable to legal risks. Both individuals and companies may ensure that their real estate transactions in Ontario are safe and compliant with the law by being aware of the functions and advantages of notary services.
In Ontario, are you starting a real estate transaction? With our skilled notary services, you can protect your investment and feel at ease. Get in touch with us right now for thorough assistance with your real estate endeavours.
Assume you have discovered your ideal home in Toronto. Its location, in addition to its characteristics and size, makes it ideal and you consider making the purchase. However, you are aware that there are many legal issues to take into account. At that point, a real estate lawyer in Canada can assist.
From managing transactions and title transfers, real estate lawyers also handle disputes that may arise between parties during a real estate transaction. Let’s get more into the specifics.
A real estate lawyer has many responsibilities, including:
This is the summary of the responsibilities a real estate lawyer has, but for better understanding, let’s understand “What does a real estate lawyer do for home buyers and home sellers separately?”
The presence of a real estate lawyer is essential for house sellers to ensure a seamless and compliant transaction. In this way, they assist:
Here is the table summarizing the main responsibilities of real estate lawyers.
Here are cases when buyers and sellers should consider a real estate lawyer:
For Buyers:
For Sellers:
But why do you need a real estate lawyer in Toronto, Ontario?
Let’s now tackle the most important query: how much does a real estate lawyer cost in Toronto?
Real Estate Lawyer Fees in Toronto
In Ontario, total costs for real estate legal services can range from $700 to $2,000. This often includes a base fee covering several components of the real estate transaction process, such as disbursements (e.g., fees for document registration, obtaining necessary certificates, etc.).
A real estate lawyer is crucial in ensuring that a transaction involving the purchase or sale of a house complies with legal requirements. They help with everything from contract writing and review to the finalization of property rights transfer.
The most important lesson to learn is that, even though the first outlay seems high, think of it as an investment in a safe and easy transaction. Consider potential concerns a lawyer can help you avoid, such as unresolved legal disputes, hidden problems, or expensive closing costs. Their knowledge might result in savings that considerably surpass the original charge, giving you peace of mind.
Now you know all about why you need a real estate lawyer and their responsibilities. Ready to make your next big move? Let us handle the details so you can focus on the joys of your new home. Contact us today to secure your closing with confidence!
Resale of existing property when purchasing a new home from a builder
One of the most difficult decisions that the purchasers of a new home have to make is when to market their existing home. More often than not the closing date for the new home is months if not a year or 2 into the future. The problem is compounded by the fact that the closing date for a brand new home is nearly always fluid (i.e. the Agreement of Purchase and Sale provide that closing dates may be delayed or escalated B it is hard to gauge). In the last few years we have experienced a new housing boom in Ontario. More often than not the original closing date agreed to by the Builder and the Purchasers is delayed by the builder as a result of unforeseen circumstances. These unforeseen circumstances could consist of:
The conservative approach is to list your house for sale as soon as you have entered into a firm Agreement with the Builder. You would close the sale of your existing house in a month or two; thereafter you would bank the equity, perhaps in a term certificate which may pay better interest, and reside in temporary housing for the time up to your closing of your brand new home. For younger couples with parents with ample space this could actually provide an opportunity to accumulate a greater down payment. The advantages of this conservative approach are four fold.
The first advantage is that you are buying and selling in the A same market. Accordingly, if prices depreciate you have had the advantage of selling your existing home in a better market. Of course, the converse is also true. In an appreciating market you loose the benefit of your existing home increasing in value prior to its being sold.
The second advantage is that the stress of trying to market your existing home so as to coincide the closing dates is eliminated.
The third advantage is that the risk of having the new home closing date approach and still have an unsold existing residence disappears.
The fourth advantage eliminates any concern over the builder accelerating the closing date. Many Builder Agreements allow for the Builder to accelerate the closing date. This means that the closing date could actually take place earlier than expected. If you have already sold your existing residence then the result of such an escalation could be much less dramatic.
The less conservative and more risky approach is to market your existing residence only 2 or 3 or 4 months prior to the anticipated new home closing date. This approach has its own advantages and disadvantages. The greatest pitfall to this approach is that in a slow market you will be left frantically trying to scramble for closing funds because you have been unable to secure an acceptable offer on your existing residence. Obviously, people with a treat deal of equity in their home are able to withstand this disaster by arranging short term mortgage financing or bridge financing through their bank. However, the failure of people without equity to secure an acceptable offer would usually lead to default on the new home purchase. The default results in a loss of your deposit and a potential law suit. One must remember that the Builder is not obligated to grant an extension of closing because the purchasers are unable to sell their existing residence. Finally it has been my experience that these risk taking people who market their homes at the last moment and do manage to coincide their closing dates are quite often inconvenienced in the end as a result of last moment delays by the builder. In other words, the best laid plans often go awry.
Read also
What is the difference between a Power of Attorney and a Will?
What is Land Transfer Tax and how is it calculated?
New Home Cost
Moving Numbers
Condo Insurance
Purchasers of new homes from builders.
The process of purchasing a new home is VERY different from that involved in the purchase of re-sale home. Aside from the possibility/probability of a number of extra closing costs – see below there is the simple fact that the agreement of purchase and sale is very much more complicated than the type of agreement used in are-sale.
This brings me to my first point – it is imperative that our clients READ and UNDERSTAND the agreement. Although, We will read this document in order to ensure that there are no particularly onerous or unusual provisions, your reading of the agreement will educate you as to the general process and also as to the particular clauses included in your deal. Please call us with any questions that arise from your review.
In general, although your agreement may be conditional upon a lawyer review, this provision is not intended to give you the opportunity of re-negotiating your arrangements with the builder. Rather, it is intended to allow you to withdraw if the legal review brings to your attention provisions that you just cannot live with and that the builder is unwilling to amend. Some builders are more willing than others to entertain changes. A few builders actually design the agreement with the idea that the purchaser will seek legal advice and propose changes to which the builder will agree. This is all part of the game!
There are a few things to remember when buying a new home:
Your agreement with the builder contains ALL of the terms of your deal. Any verbal promises or representations are non-binding on the builder. If a particular issue is important to you GET IT IN WRITING.
The builder is entitled to delay the closing in accordance with the agreement and the Tarion – Ontario New Home Warranty Plan. Please visit their website at www.tarion.com for more details with respect to permitted delays.
In terms of closing date, you, the buyer, can best compare the scheduled closing date with the state of construction at any given time. For instance, if the builder is telling you that the home will be completed, on time, in three months and if no foundation has been poured, then, obviously, the builder is not being straight with you! As a rule of thumb, four months is the required time to start and complete an average home. This is assuming no strikes, labour shortages, weather or governmental delays.
Every agreement for the construction of a new home permits the builder to make minor changes to plans and specifications. They also permit builder substitutions for buyer colour selections etc. Efficient builders will consult with their customers when these types of changes are contemplated.
However, it has been our experience that many of our clients discover that the builder has made changes only when our clients make one of their periodic visits to the property! Unfortunately, in most circumstances builders nowadays are not responsive to their customer’s complaints that the customer was not properly consulted or notified of changes. Indeed, we have had many clients in the past few years who have negotiated for and paid for changes/upgrades, only to visit the home and discover that these items were not implemented. Rather than re-do their work most builders will simply credit the purchaser with the amount paid for the extra or change. If your agreement does not specify a dollar amount then the credit is likely to make the purchaser very unhappy. Accordingly, if your purchase price includes specific extras or changes make sure that a dollar value is listed, in the agreement, for each item.
As with many consumer-oriented decisions the best protection for the consumer is to obtain references from others that have bought from the same supplier of goods or services. A person who has bought from the same builder and is unhappy will be delighted to steer you away. By the same token, a happy consumer will gladly give the builder a positive review. How do you find someone from whom to obtain an opinion? I suggest that you knock on a door or two. The decision to buy a home is as important as any non-personal decision in a person’s life. Accordingly, a little self-protecting legwork by the purchaser is certainly in order. Although the costs involved in the purchase of a new home are, undeniably, higher than those for are-sale, there is one redeeming feature for first time purchasers. If you have never owned a home anywhere in the world then you are entitled to deduct from the land transfer tax otherwise payable an amount equal to the lesser of the tax or $2,000.00. There are special rules for persons who are otherwise eligible but who are married to an ineligible spouse as well as rules for eligible/ineligible unmarried co-buyers.
In the event that the builder requires an extension/extensions of closing do NOT sign any documents without speaking with us first. We do not want you to give up any of your rights under the Tarion – Ontario New Home Warranty Plan.
If you are arranging a new mortgage you should obtain a mortgage commitment that is binding upon the Bank/trust Company for a period of time expiring well after the closing date. This will guaranty your interest rate in the event of extensions of closing imposed by the builder.
Attached to this memo is a list of POSSIBLE closing adjustments. Unless your agreement includes an adjustment, either specifically or generally, then you are not subject to that adjustment. It is recommended that you insist that your builder quantify the amount to be charged for a specific item. If the builder is not prepared to do this then insist that h& at the very least, “cap” the amount to be paid. For instance, if you are responsible to pay for a water meter ask that the agreement contain something such as “said cost not to exceed $250.00” . You absolutely and unequivocally CANNOT rely upon the verbal representations of the salesperson or builder as to the amount of these adjustments. Finally, you should be very wary of any adjustments relating to municipal/governmental/educational charges or levies. You should absolutely insist that the builder deletes or “cap” these types of adjustments. If you do not, you could be faced with an unexpected adjustment of$500.00 to $5,000.00 depending upon municipality and house price.
Guidelines for insurance for condominium unit owners.
This memorandum is intended to provide you with some basic guidelines and information. Your insurance requirements should be determined in consultation with your insurance agent.
Betterments and Improvements
The insurance the Condominium Corporation maintains on your unit will only cover the unit as it was originallybuilt by the developer, excluding any extras or improvements acquired at the expense of the original purchaser. It does not cover the contents of your individual unit or locker, nor any betterments and improvements made to the unit by you, a previous owner of the unit or the developer. For example, these betterments could include wall-to-wall carpeting, mirrored walls, other wall coverings, remodelled kitchen or bathroom finishings or improved light fixtures and appliances.
If changes have been made to the condominium unit (apartment or townhouse) as originally supplied by the builder, you should ensure that these items are covered and your insurance increased by the amount of each improvement. There is no provision in the condominium’s policy for cost sharing. If you have replaced the kitchen cupboards, you must insure the incremental value of the replacement if you expect to have the damaged cupboards replaced by a like kind. The condominiums policy will only replace the cupboards in a similar quality to those originally supplied by the builder.
Liability Insurance
Your insurance program should include personal liability coverage to protect you against any actions by third parties for personal injury or property damage caused by any personal act or omission or failure to repair or maintain your unit. You should discuss the appropriate amount of insurance to carry with your insurance agent.
Living Allowance
If your unit is damaged to the extent that it is uninhabitable, your insurance policy should provide coverage for any living expenses you may incur as a result of not being able to reside in your suite as repairs are being made. Again, discuss the amount of coverage with your insurance agent. This coverage is not provided in the Condominium Corporation’s policy.
Sewer Backup Rider
If you have purchased a condominium townhouse you should confirm with your insurance agent that your policy of insurance provides protection in the event the sewers back up into your basement or other area of your home.
Contingent Building and Liability Insurance
This provision covers damage to your unit when the Corporation’s policy cannot respond or is insufficient. It is, in effect, excess coverage beyond that of the Corporation. The Corporation’s policy will always be primary because it will respond first. If the cause of the loss is not covered by the condominium, or if the extent of the coverage is insufficient (depending on the event) this contingent building insurance may help you out. It very rarely applies but it may be useful and is typically fairly inexpensive.
Land Transfer Tax or “sales tax” levied by the Province of Ontario. The amount of the tax increases as the purchase price increases. Tax is payable in connection with the purchase of any real estate (including condominiums, cooperative apartments and vacant land) in Ontario Land Transfer Tax (L.T.) is calculated as follows:
Land Transfer is paid at the time of closing with a real estate lawyer Toronto. When you co for your appointment to sign the closing document, the bank draft or certified check that you will be asked to bring with you will include the balance of your down payment, your Ie I fees and out-of-pocket expenses, any money deducted by the mortgagee from the advance of mortgage proceeds and the Land Transfer Tax.