Humber Real Estate - Course 3, Module 3, Completing Agreements of Purchase and Sale For Residential Condominiums|60 questions and answers

No. They can vary significantly from builder to builder or even from project to project. Is there a standardized form for builder's agreements? - Dimensions - Materials of rooms, cupboards & countertops - Descriptions of future facilities planned for the site - Schedules for deposit payments & occupancy dates What information is usually defined in a builder's agreement? The builder's lawyer (to serve the builder's best interests). Who generally prepares a builder's agreement? Declaration: • Address, boundaries, amount each unit pays for common expenses, type of condo, which parts are exclusive-use common elements, repair & maintenance obligations & insurance requirements) Description: • Survey, description of all elements & assets, diagrams, description of what's included in with each unit Bylaws and Rules Budget: • First year's projected budget, monthly common expenses, % to be added to reserve fund, any circumstance which may increase common expenses after the first year and the amount of potential increase Features Occupancy Dates Management & Contracts • Type of condo management (self-managed or contracted professional manager), any committed contracts entered by the builder on behalf of the corporation (incl. service contracts for repairs, landscaping, etc.) Occupancy Fees • Fees paid during interim occupancy prior to the condo being registered and the title transferred What's included in the disclosure statement provided when a new condo is purchased? - Interest calculated on a monthly basis on the unpaid balance of the purchase price at the prescribed rate (if applicable) - An amount reasonably estimated on a monthly basis for municipal taxes attributable to the unit - The projected monthly common expense contribution for the unit The monthly occupancy fee cannot exceed the total of what amounts? Yes. This is considered a material change. However, if the amount was 10% or under, no notification is required by the builder. If a builder of a new condo increases projected common elements fees by 15%, are they required to notify a buyer? 60% - 65% What is the average minimum percentage of units that must be sold for a new condo build to proceed? 90 The occupancy date can usually be extended several times by the builder without compensating the buyer, if there is ____ days' notice given for each extension. The Ontario Builder Directory This directory provides information on builders with a history of project cancellations. Tarion provides support for condo buyers through what resource? The Tarion Addendum What is attached to every builder's agreement and includes a Statement of Critical Dates - Delayed Occupancy Warning? The buyer and the builder. Who must sign The Tarion Addendum? False. The builder can set 1 or more occupancy dates. True or false? There can be only 1 occupancy date listed in The Tarion Addendum. The Firm Occupancy Date If the occupancy date cannot be met, a builder (with 90 days' notice) can extend the occupancy date up to ____ days by setting the ______________________. The Outside Occupancy Date The latest date a builder agrees to provide occupancy is called the _____________________________. If completion of the unit is delayed beyond this date, a buyer has the right to terminate the purchase agreement. 30-day Purchaser's Termination Period To receive compensation in case of delay beyond the Outside Occupancy Date, a buyer must exercise the right to terminate within the ________________________. Delayed occupancy compensation ($150 per day up to max of $7500 total). If the Firm Occupancy Date is not met (the buyer cannot terminate the APS yet), what is payable to the buyer? Mutual agreement The Tarion Addendum contains specific rules for changing dates by _______________________. Their right to compensation. Therefore a real estate lawyer should be consulted before any change to occupancy date is agreed upon. Accepting a change of occupancy date may result in a buyer waving what right? Advising buyers that future development may occur on lands adjacent to the proposed condominium development. What does the 'Adjacent Property Clause' in the builder's agreement cover? A buyer's access to the condominium development site. It is likely the builder's agreement will include an 'Access To Development Site' clause limiting what? Larger Pre-construction condominiums usually require a buyer to make a _________ deposit than is typical for other residential properties. $20,000 This protects a buyer's deposit in case a builder does not complete a project due to bankruptcy or terminates the purchase agreement for other reasons and the deposit is not returned. A buyer's deposit on a new condominium is protected by Tarion up to a maximum of _____________ per condominium unit. Builder's lawyer's According to the Condominium Act, condominium deposits must be placed in trust in the _________________________ trust account. 10 If a builder terminates a purchase agreement, the buyer's deposit must be returned in full within how many days? Deposits Once construction begins, a buyer may upgrade finishes or features inside their unit. A builder can require buyers to make payments prior to these upgrades, but these are not considered ____________, and may not be protected by the Tarion warranty coverage. - Floor plans - Procedures for handling deposits - Decor selections - Tarion warranty information What information may be included in the builder's agreement schedules? $30,000 The purchase of a pre-construction condominium may involve a rebate to offset the HST costs related to construction costs. The rebate may be up to a maximum of ______________, if the unit is used as a principal residence. Occupying the property. In order to claim an HST rebate, a buyer must sign a statement under oath stating that they or a family member will be doing what? The fair market value of the property at completion (not occupancy), when ownership is transferred from the builder to the new owner. Note: The result is usually a smaller rebate for an investment property. The unit must also be leased for a minimum of 1 year from the occupancy date, and if sold before that date, the owner must refund the HST rebate in full. For investment properties, what is the eligible HST rebate amount based on? Sales prices Most builders factor the HST rebate into their _____________, therefore the buyer may not be eligible for it. Whether the property is subject to the Ontario New Home Warranties Plan Act. What does the 'Warranty Program' clause in a builder's agreement cover? - Protection for deposits - Compensation for delays in closing or occupancy - Protection against unauthorized substitutions - 1 year and 2 year warranties for certain defects in work and materials - 7 year warranty for major structural defects *Condominium common elements are also protected What is covered in the Ontario New Home Warranties Plan Act? The amount of the interim occupancy fee and what it includes. The 'Interim Occupancy' clause in a builder agreement covers what details? Prohibits selling the condo unit without the builder's consent. The 'Prohibition of Assignments' clause in a builder agreement dictates what? - 'Terms' clause (defines terms relevant to the agreement) - 'Finishes and Features' clause - 'Occupancy of a unit prior to completion of construction' clause - 'Builder's Right of Entry' clause (effective during interim occupancy - builder can enter unit to complete construction work or address deficiencies in the unit ... buyer can't refuse entry for 6 months) What are some additional clauses in a builder's agreement? After the turnover meeting when the new owners receive title. When selling a new condominium, when will you be paid your commission? - Name of the condominium property - Legal name of the condominium corporation - Condominium plan number - Unit number and level number - Building number - Parking space and locker levels and numbers (including whether they are owned, exclusive use or assigned) What information is included in the property description of a condominium that's not included in a freehold property description?