BUYING A HOME FROM A BUILDER

When buying a NEW HOME from a builder, there are two types of transactions:

Condominium purchases; or
Freehold purchases (detached homes, semi detached homes and sometimes town homes)

CONDOMINIUMS
In addition to your unit, include interests in a common area in a building or on land, shared by all unit owners, and you have a right to access (e.g. pools, gym, party rooms, etc.). Condominiums are typically high-rise buildings but can also include town-homes and some private subdivisions. There are other types of Condominiums called Parcel’s of Tied Land (POTL) which will also including roads, parking facilities, a clubhouse, a marina,etc.

Under the Condominium Act you are entitled to a 10 day cooling off period by law, which commences on the date when the builder has signed acceptance of the Agreement of Purchase and Sale and a fully executed copy has been provided to the purchaser.

During the cooling off period the purchaser may review the agreement and provide written amendments to the Agreement. The purchaser can also terminate the Agreement if they do not wish to proceed (called Rescission of the Contract).

FREEHOLD PROPERTY
If you are purchasing a Freehold property or a resale property there is no right to a cooling off period unless their is a condition added to the Agreement. This also means that if you are buying a property that is a renovation of an existing home, there is no cooling off period.

BE CAREFUL!

There is a loophole in the Ontario New Home Warranties Plan Act that permits conversions (and attached buildings) to be exempt from Tarion Warranty Coverage. This means that if you purchase from a New Home Builder of a Converted Building (e.g. Church Lofts, Hotel turned into Condominiums, etc.) then your house or condo may not be covered by the Tarion Warranty.

Mister Real Estate Lawyer recommends that if you are buying a conversion condominium or home, contact your lawyer to discuss any possible concerns prior to signing any Agreements of Purchase and Sale.