By Condo Culture
There are huge benefits to purchasing pre-construction condos. In this week's blog, we take a look at our top 5 things to know before you make your purchase. To learn more about the benefits of Pre-construction condos compared to resale condos check out our earlier blog article here.
1. Work with the pros
Pre-construction condos are a specialized class of real estate, so you want to work with a team of professionals who understand the market and can help navigate the process. This team should include 1. a knowledgeable REALTOR® who is familiar with the available projects in your area and can get you access to high demand developments especially in a very competitive market 2. a lawyer, who can review relevant documentation, offer advice and is familiar with assignment sales and 3. reputable builders and developers with a track record of producing quality projects that have been executed within a reasonable timeline.
At Condo Culture, our team of REALTORS® do significantly more condo transactions than the industry average and have assisted with successfully launching the majority of Waterloo Region's top new condo developments. For a list of a few of our upcoming new development projects click here.
2. 10 Day cooling period
In Ontario, when purchasing a pre-construction condo you will have 10 calendar days from the date of signing (referred to as the cooling period) to cancel the Agreement to Purchase and Sale (APS) penalty free and for any reason. This period can be used to have your lawyer review the APS and to ensure you are comfortable with moving forward with the condo purchase.
In pre-construction, a condo unit isn't owned by its purchaser until all units in the condo development have been completed and the building has been registered. Only a purchaser’s legal rights and obligations outlined in the APS can be sold prior to the building's completion. This is referred to as an assignment sale. The seller of this contract is the assignor and the purchaser, the assignee. While assignment sales may at times be necessary and beneficial to both assignors and assignees it is a highly complex transaction that requires a lot of time and paperwork. It is important that you not only fully understand the pros and cons but that you also work with professionals when considering buying or selling an assignment unit.
In the last 6 months the Condo Culture team has successfully assisted with more than 30 assignment transactions. For more information on Assignment Sales, check out our earlier blog Condo Assignments Explained.
Also, click here for a list of available off market assignment opportunities in the Region.
__4. Occupancy __
When purchasing a pre-construction condo purchasers will receive keys to their unit and the option to move in before the building has been registered and they officially take ownership of their condo. This period is referred to as interim occupancy and purchasers will be required to pay the builder occupancy fees which consist of interest on the unpaid balance of your purchase, estimated taxes and condo fees. The occupancy period ends when the building has been registered and at this time your mortgage will begin.
5. HST Rebates
As a pre-construction condo purchaser you may be eligible for a HST rebate. If you intend for the purchased condo to be your primary residence or that of a family member, the builder will submit the rebate application on your behalf. If the condo however, was purchased with the intention of being used as a rental investment property, the HST is required to be paid upfront and an application with supporting documents (i.e. 12 month lease agreement) must then be submitted for the rebate to be received. For more information on HST Rebates check out Pre Construction Incentive: HST Rebate Explained.
For more information on purchasing condos in the Region or to learn how the Condo Culture team of experts support buyers, book your free consultation.