Purchasing Property from a New Builder in Ontario: A Buyer’s Guide

Purchasing a newly built home from a builder in Ontario is an exciting yet complex process. Unlike resale homes, new builds come with unique considerations that buyers must be aware of. This blog explores what buyers should do before and after purchasing a new build, the importance of legal advice, rights under the Tarion Warranty program, and the legal consequences of failing to close the transaction.

Steps Buyers Should Take Before and After Purchasing a New Built

Before Signing the Agreement

Research the Builder – Check the builder’s reputation, past projects, and customer reviews. Ensure they are registered with Tarion.

Understand the Agreement of Purchase and Sale (APS) – New build agreements are often lengthy and complex. Buyers should thoroughly review all terms and conditions.

Get Legal Advice – A real estate lawyer in Ontario can help identify hidden clauses, additional costs (e.g., development charges), and any potential risks.

Check for Cooling-Off Period – In Ontario, buyers of new condominium units have a 10-day cooling-off period to reconsider their purchase. However, this does not apply to freehold properties.

Know Your Rights Under Tarion – Ensure the builder provides Tarion warranty coverage and review the protection it offers.

After Signing the Agreement

Monitor Construction Progress – Keep track of completion timelines and communicate with the builder.

Review Adjustments and Closing Costs – Be prepared for extra costs such as utility hook-ups, development levies, and HST adjustments.

Conduct a Pre-Delivery Inspection (PDI) – Document any deficiencies before taking possession.

Secure Financing – Ensure mortgage financing is in place before the closing date to avoid delays.

Importance of Legal Advice Before and After the Purchase

Obtaining legal advice is crucial to avoid unexpected costs, understand your rights, and ensure a smooth transaction. Before signing the agreement, a lawyer can help you negotiate terms, clarify additional costs, and explain your obligations. After the purchase, legal counsel can assist with closing procedures, reviewing title issues, and ensuring the builder fulfills their obligations under the contract.

What to Do If There is an Issue with Closing

Issues can arise at the time of closing, such as:

The builder delays occupancy or fails to complete construction on time.

Unforeseen closing costs that the buyer was unaware of.

Financing issues preventing the buyer from obtaining the required mortgage.

If there is a problem with closing, buyers should:

Consult The Builder’s Lawyer Immediately – A real estate lawyer can negotiate extensions, dispute additional fees, or explore legal remedies.

Check for Tarion Coverage – Tarion may provide compensation or assistance if the builder fails to meet their contractual obligations.

Negotiate with the Builder – Some builders may offer alternative solutions, such as delayed closing compensation.

Buyers’ Rights Under Tarion Warranty in Ontario

Tarion provides warranty protection to new home buyers, covering:

Deposit Protection – Refund of deposits if the builder fails to complete the home.Delayed Closing Compensation – Buyers may be entitled to compensation if the closing is delayed beyond permitted limits.Defects and Workmanship Issues – Coverage for construction defects, major structural defects, and Ontario Building Code violations.Warranty Periods:

o   1-year warranty for workmanship and materials.

o   2-year warranty for major plumbing, electrical, and heating issues.

o   7-year warranty for major structural defects.

Legal Consequences of Not Closing the Deal

If a buyer fails to close the transaction, they may face serious legal and financial consequences, including:

Loss of Deposit – The builder may retain the deposit if the buyer defaults.Lawsuits for Damages – The builder may sue for losses resulting from the failed transaction.Impact on Credit Score – A lawsuit or mortgage default could negatively affect credit ratings.Resale Restrictions – Some builders impose conditions on assignments or resale before closing.

Conclusion

Purchasing a newly built home in Ontario is a significant investment that requires careful planning and legal guidance. Buyers should take proactive steps before and after purchasing, be aware of their rights under Tarion, and seek legal assistance if issues arise. Failing to close the deal can have severe consequences, making it essential to be financially and legally prepared. If you are considering buying a new home, consulting an experienced real estate lawyer can help you navigate the complexities and protect your investment.

Resource : https://nhashmilaw.com/blog/purchasing-property-from-a-new-builder-in-ontario-a-buyers-guide/

Insights into Commercial Litigation: Comparing Power of Sale and Receivership

Are you facing legal challenges concerning receivership or understanding various powers of sale aspects? We are here as top-rated, reputable legal advisors to make everything simple. Lenders have two primary methods to receive money from someone who can’t repay a loan. The common methods are the power of sale and receivership. The lender applies these techniques to recover the loan amount. But these two methods are different. Let us explore further details.

The meaning of the power of sale

It gives the lender, like a bank, to sell a property when the owner fails to repay the loan. We, HASHMI LAW GROUP, have experienced commercial litigation lawyers in Mississauga, who regularly oversee these legal issues. Power of Sale involved a few steps:

1.There is a 15-day waiting period when the borrower can’t repay the loan installment. Please don’t hesitate to contact us, certified and top-rated commercial litigation lawyers in Mississauga, to understand the detailed legal framework of the process.

2.After 15 days, there is a notice period of 35 days. The borrower gets a notice from the lender.

3.The lender gets the power to sell the property unit when the borrower fails to repay.The lender decides the property price. Also, the lender decides the buyer.

4.When the lender sells the property, the lender uses it to recover the loan and legal fees. The borrower can get the remaining money.

1.Main Features

1. It is faster than other strategies.

2. Expenses are less.

3. There is more control over the selling process.

4. There is difficulty in ensuring a fair market price for the property. It can lead to legal challenges.

5. When there are complicated issues concerning the property sale, it is not an intelligent method.

The Meaning of Receivership

It is the second way to recover money from a borrower on non-repayment of a loan. There is an independent expert, called ‘receiver’, on behalf of the lender, who handles the property issues and selling the property. The main aspects of the method are:

1.      The lender appoints the receiver with legal approval, compliant to the mortgage agreement.

2.      The receiver takes control of the property unit and shoulders its sale process.

3.      The receiver may need court approval to sell the property.

4.      There is more surety of selling the property at a competitive market value.

5.      The borrower receives the money to recover the loan amount.

Main Features

1.      The court oversees the process. It provides legal protection to the lender.

2.   The receiver manages the property. The receiver can manage a business or maintain the property value before selling the property.

3.      The method is effective when selling a complex property like a hotel, factory, or business unit.

4.      The method is more expensive than the Power of Sale.

5.      The method takes a longer time.

Which is a better method?

It depends on a few factors. If the property is a residence or an empty plot, Power of Sale is the correct choice. If the property is a hotel or factory, and requires court approval and monitoring, Receivership is the correct choice. You can consult us to get more information.

Resource : https://nhashmilaw.com/blog/insights-into-commercial-litigation-comparing-power-of-sale-and-receivership/