As more and more people are choosing condos as their entry into the market, we thought we would remind you of some of the essentials of condo buying.
Status Certificate: Make your deal conditional on Status Certificate review even if you know the building and have closed deals in it before. This is because the particular unit being purchased may have liens, notices of violation, common expense arrears or outstanding notices from the Condo Corp. Also, Special Assessments, increases in common expenses or lawsuits may arise at any time. Order it fast and try to allow 3 days for review if possible.
New Condos: Have the agreement reviewed by a lawyer well within the 10 day cooling off period. These deals often contain provisions for significant extra charges, changes to the closing date, changes in design and material, cancellation clauses and extended occupancy fee terms. The buyer needs to be made aware of these matters and, although difficult to do, give us an opportunity to limit their effect. Dealing with a reputable builder with a good track record is a plus.
HST & Investors: If investing in a condo remember that most new condo agreements require that the purchaser be using the condo as a primary residence for him/her or a family member. If not, the purchaser may be charged back 36% of the G.S.T. on the purchase. There are also capital gains tax considerations so if the purchaser is investing and wants to sell after closing, tax advice should be considered in these matters. Also, if the purchaser wants to be able to sell before actually closing with the builder, a right to assign should be inserted into the agreement obtained.
Keys and Pass Cards: Try to put a clause in the agreement requiring the vendor to deliver all keys and pass cards on closing. This will save your buyer some expenses and headaches as these are not all necessarily turned over on closing.
Inspections: Don’t assume that a condo should not be inspected. Although uncommon, we have become aware of condos being used as grow houses. This can damage electrical work and cause mold. Also, even condos have leaks, possible electrical problems, roaches, etc… Consider each condo individually.
Rules – Pets, Satellite Dishes, etc… If the buyer has a pet or wants to use a satellite dish you should ask about the rules before proceeding and, even then, specifically tell the lawyer to watch for rules regarding these and any other specific matters.