If you're considering a new condo, having a clear knowledge of the purchase agreement will give you peace of mind before you commit to buying. The purchase agreement is the contract you sign when you buy with a condo developer outlining everything you need to know about your purchase.
Who Is The Developer?
First and foremost, you want to make sure you're working with a reputable developer. Do some research ahead of time regarding their reputation, quality, and how they treat their clients, especially post-sale. You may even want to "check references" by talking to those who have already purchased from the developer to learn more about their experiences.
What Does A Purchase Agreement Include?
The Condominium Property Act makes it legally mandatory to have these essential parts in your purchase agreement:
a) Information on how to cancel the purchase agreement
b) A description, photograph or drawing of the common property or unit that details:
- The building's finishes
- All improvements made to the common property
- Recreational facilities and amenities
- Maintenance equipment for common property
- Any landscaping
- The location of all parking areas, roads and sidewalks
All significant utility installations
c) The amount or estimated amount of monthly condo fees for your unit
d) How your unit contributions and voting rights are determined
e) Information pertaining to the new home warranty
What Else is Included?
In addition to the purchase agreement, the developer is required to provide you with a number of other documents pertinent to you and the condo community. These include:
- The condominium plan
- Details on the community's bylaws
- The recreational agreement (this varies from developer to developer)
- The lease for the land on which the unit is located
- A copy of your mortgage agreement
The reserve fund report and plan (if the development is being converted)
10 Day Rescission Period
Under the Condominium Property Act, upon receipt of all the documentation, you have 10 days to review the agreement. Anytime within these 10 days you may cancel your purchase agreement. If you choose to end your agreement, the developer has to offer you a full refund within an additional ten days of written notice. Your lawyer will be your point of contact to help you through this process if necessary.
Now that you have a clear idea what to expect from a good developer and the purchase agreement, you can confidently move forward with the purchase of your new condo.
Lastly, if you're unsure about something, ask! A reputable developer will be more than happy to address any questions or concerns you may have.