Surprise Closing Costs
A builder’s agreement to purchase a newly constructed condo (in contrast to the simplicity of a resale condo) contains pages of fine print which are NOT standard for each builder since each has it’s own pet clauses. The “adjustments” chargeable on closing (in addition to the upgrades ordered by a purchaser at time of colour selection and in addition to the closing costs of legal fees, legal disbursements and land transfer tax) can be substantial. In the last few years, many builders have been more creative in their fine print for items charged on closing which adjust the ultimate purchase price upwards- e.g. the unit’s share of the building’s sewer connection charges, education development charges, bulk hydro meter, estimated property taxes for the year after closing (as well as for the balance of the year of final closing), initial reserve fund contribution, subway connection charge, (if applicable) etc., with each such charge ranging from a few hundred dollars to two thousand dollars plus. The total of such adjustments (depending on the builder’s fine print) can add up to a nasty surprise on final closing.
Room Sizes and Square Footage
Walk into a new condo site and you will be provided with glossy brochures showing layout (floor plans) of the various models with room dimensions and square footage of the model which can magically disappear from the floor plan (with many builders) as soon as an offer to purchase is being signed. Remember, the builder’s promotional advertising is not meaningful since what counts is the actual terms in the agreement of purchase and sale signed by purchaser and by builder. If it is not in writing within the terms of such agreement, the contents of the glossy brochure mean nothing. Verbal assurances by the builders