New pre-construction condo developments in Ontario will soon require an extra information sheet in the Agreement of Purchase & Sale thanks to a new mandate by Tarion Warranty Corporation.
Tarion made two announcements recently; they made updates to the Ontario Builder Directory, and condo developers now need to include a detailed info sheet highlighting the risks of purchasing a pre-construction condo in the purchase Agreement.
Starting January 1, 2020, the new condo purchase Agreements will include a sheet outlining the following:
“pre-construction condominiums come with the risk that they may never be completed;
early termination conditions that would allow a developer to cancel a project;
information about the status of the development (e.g., formal zoning approval, relevant approval authority and date of commencement of construction);
information about any restrictions on the developer’s land title that may prevent the project from going forward;
a purchaser has an initial 10 days under the Condominium Act, 1998 to cancel a sales agreement; and
the expected date when a purchaser can take occupancy.” (via Tarion)
Leasehold, common element, and vacant land condominiums will be exempt from requiring the info sheet outlining the risks of purchasing a pre-construction condo.
Condo buyers can also use the Ontario Builder Directory
to look up condo projects now by name or location, and see important info like status of the project and unit count. You can also look up any cancelled projects.
“The purchase of a new home is often the most important one that many Ontarians will make,” said Tarion’s President and CEO, Howard Bogach, in a release earlier this week. “At Tarion, we’re doing our part to ensure that these purchases are informed by a thorough understanding of the risks, builder history, and status of a given project. The initiatives that we’re announcing today will contribute to a better informed purchasing process.”
We’re all for homebuyers being as informed as possible when it comes to their purchase, and the updated Builder Directory and info sheet will help, but it doesn’t necessarily prevent condo cancellations or even deter developers from cancelling projects. The changes may convince some people to not buy, but the risk of condo cancellations has not changed.
That said, condo cancellations actually represent an extremely small percentage
of condo units brought to market. Educating condo buyers on the risks of buying is important, and if the risk is more understood by the masses, then news of a cancellation may not be as surprising (or worse, heartbreaking).
Remember, buying real estate
is always a risk, whether it’s resale, new construction, residential or commercial. Prices go up and down, trades strike, interest rates change, construction is delayed, etc. Anything can happen. All you can do is research as much as you can and understand that there’s a certain level of risk no matter where you buy.