Patricia Katz

5 Important Points to Check when Buying a “pre-construction” Residence

• For a detailed history of properties sold or currently available in your neighbourhood, you can contact me in confidence @
•  416-879-2094 or email patriciakatzrealestate@gmail.com

“when you call me, you speak to me, not an assistant”

The Purchase of a “pre-construction” residence can involve a certain set of risks! The following 5 steps can help the buyer gain knowledge in how to navigate the buying process:

with a lot of paperwork such as **the purchase agreement **the addendums **the warranty information sheet **the condo information sheet and much more

Keep in mind that there is a 10 day cooling off period beginning from the time  the buyer signs the purchase agreement

1. Check if the builder is licensed — to confirm if the chosen builder is licensed check the Ontario Builder Directory. This is the official source for licensing information. This directory will let you view if a builder has any disciplinary activities, court charges or convictions. Also the builder’s past warranty record is available.
2. Get to know what a warranty covers — most newly built houses/condos come with a warranty that’s provided by the builder and supported by Tarion. In some cases where the vendor and the builder are separate entities, the warranty coverage is the vendor’s responsibility. *includes some deposit protection *delayed closing/occupancy coverage *financial loss protection for contract homes: for more information about what the warranty covers, check the Tarion Website.  Tarion Website
3. Know your deposit protection — *a certain amount of the deposit and some $investment towards upgrades & other extras gets protected a)Freehold deposits: $60,000 in deposit coverage for purchases up to $600,000 or 10% to a maximum of $100,000 for anything that exceeds that amount b)Condo deposits: the Condominium Act states that the deposit to the builder/vendor must be placed in trust *if the purchase agreement is terminated by the builder/vendor or the condo project is cancelled, the deposit must be returned within 10 days *the new home warranty protects the deposit for up to $20,000. Check with Tarion Website for more information
4. Your pre-construction home gets delayed — the delay warranty guarantees that *a condo unit will be ready for occupancy by a)a mutually agreed-upon Occupancy Date or by b)the Occupancy date has been properly extended *for a freehold home, the same warranty applies except that it is referred as  the Closing Date instead of the Occupancy Date. There is more information about Delayed Closings on the Tarion Website
5. How the Buyer’s Lawyer is involved in the purchase — there is a lot of complicated paperwork concerning the purchase of a pre-construction house/condo * it’s best to have this paperwork reviewed by a “real estate lawyer” to make sure all the terms of sale, including any potential delays and or terminations are understood by the buyer & also to know what is NOT included in the purchase price.

Patricia Katz, Broker, SRES, Platinum Award

Sutton Group-Associates Realty Inc., Brokerage

416-966-0300