Carl Minicucci in Home Buying Tips, Condo Buying Tips, Legal
In the market and planning the purchase of a new freehold home or condominium in the next few months? If so, you will find the upcoming two-part blog posts of particular interest. I will highlight and discuss the expected pending changes to delayed closing and occupancy provisions of the Ontario New Home Warranties Plan Act.
Overview
In March of this year, Tarion Warranty Corporation (the Government approved private corporation responsible for administering the Ontario New Home Warranties Plan Act), announced a change effective July 1, 2008, to Ontario purchasers of new freehold homes or condominiums.
These changes to the Ontario New Home Warranties Plan Act and Regulations have stemmed from growing concerns and frustrations from the public and media over the lack of clarity and transparent disclosure facing Home Buyers.
Highlights of the changes include the need for:
- Improved disclosure
- Greater clarity of closing dates
- Better notice periods (including extensions)
- Clarity in respect of permissible delays
- Clarity on methods for changing the firm closing date
- Improved compensation for purchasers
- Termination of Purchase Agreement
According to Tarion (and assuming Government regulatory approval), Ontario consumers will benefit from enhanced delayed closing and occupancy warranty protection provisions as follows:
- A new standard form information statement will be required in every Agreement of Purchase & Sale for a new home (known as “the Addendum”), which will outline for consumers the closing details in clear language, including disclosure of critical information about the current status of the property being purchased;
- The Addendum will feature a cover page that lists each important date related to a home’s closing or occupancy;
- Builders will be required to disclose key information at the time of purchase, such as when construction is scheduled to start, whether a building permit has been issued, whether sewer and water services are currently available, as well as any conditions precedent that must be met in order to complete the contract. This information will assist consumers to better understand whether a delay in closing is probable, and will assist consumers to manage their own affairs, including the timing of the sale of their current home; and
- A 50 percent increase in compensation for home buyers who experience a legitimate delay in closing, raising total compensation to $7,500.00 from $5,000.00.
The changes to the warranty provisions will distinctly address Freehold and Condominiums separately, giving due regard to the fact these markets operate differently. On a broad level, purchasers of Freeholds will be given either a choice of a “Firm Closing Date” option or a “Tentative Closing Date” option. For purchasers of Condominiums, choices will include either a “Firm Occupancy Date” or a “Tentative Occupancy Date.”
Accordingly, in my next two blog posts, I will highlight details each option for new Freeholds and Condominiums along with overall changes to each Warranty and attempt to make some sense of it all.
Stay tuned!
Carl Minicucci is a sales associate at Humber Valley Realty in Vaughan. Email Carl
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