Ask a Lawyer: Condo Conundrums

Rachel in Condo Buying, Legal, Ask an Expert 

This post is a collection of some popular questions that I have received over the last little while that I thought might be of interest to other home buyers considering purchasing a new condominium.   If you have a specific question, please feel free to contact me by email and I will respond as soon as I am able.  I reserve the right to use your question in any future 'Ask a Lawyer' blog - but I will not use your name or anything that is unique to you in my post.

How many days before my interim closing is my Pre-Delivery Inspection (PDI) supposed to occur?

There is no fixed time, but PDIs are usually conducted sometime within the week before your occupancy date.  You will want to keep your schedule pretty flexible during that week to be able to accommodate the PDI.

I signed an agreement of purchase and sale with a developer for a condominium.  The project is not scheduled to be completed until 2010, but I found something else that I like.  Can I sell my unit?

In general, the contract you sign to purchase new construction is drafted by the developer specifically to prohibit 'flipping' by the buyer.  This is because the developer usually will want to take advantage of any increase on value.  The reason that you will need the permission of the developer is due to the fact that you do not actually own the unit that you want to sell yet.  You merely have an interest in it until registration is complete.  In order to be certain, review your contract and talk to the developer.

I just signed an agreement to buy a condo and the lady I spoke to in the showroom told me that I would get a granite countertop upgrade at no charge.  Now I have been told that the developer did not approve this deal.  What is going on and why don’t they have to honour their word?

I don’t know why sales people in development offices are able to say anything they want with zero accountability.  What I do know is that very little of what you hear in the showroom has any bearing on what the final contract may look like.  If it is important to you, make sure it is in writing and signed by the developer – make sure it says ‘I have the authority to bind the Corporation’ under the signature - otherwise, don’t count on it.  If you are within your ten day rescission period take the opportunity to walk away if you do not feel comfortable or if you are not going to get what you had been 'promised'.

My new condo project has been delayed and I am anxious to see it.  I have heard that some of the other residents are sneaking on to the site to check out the progress of their units and I think I am going to do the same.

Most contracts for new development strictly prohibit purchasers on the site without the developer’s permission.  This is for many reasons, but the first one that comes to mind is liability.  This is still a construction site, with materials, tools and potentially dangerous stuff lying around.  It is not a safe idea for you to be lurking around there.  This is entirely separate from the fact that you are likely trespassing.  Your best bet is to call the developer and schedule a visit.  Refer to your contract to be sure, but I would bet that this is just not allowed.

I have discussed my new condo contract with my lawyer and it seems unfair.  Everything seems to be in favour of the developer and I don’t even know how much this thing is going to cost me in the end.  Why can’t anybody help me?

The contracts are standard forms, designed by developers to make the administration of the building smoother.  Because they are designed by the developer, they are drafted with a mind to protecting the developer’s interest.  Not yours.  Having said that, some developers are willing to limit or cap certain costs.  Others will not.  Largely this will depend on market conditions as well as the phase of construction.  As an example, the closer a condo is to being registered, the more likely the developer will be able to estimate, and therefore cap, costs.  For you early birds, this usually means greater uncertainty.  The more flexible your expectations with respect to your condo, the happier you will be. 

Rachel Loizos is an associate lawyer at Sotos LLP in Toronto. She practices in the area of real estate law.
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