If
you are buying a newly constructed home, you will want to know the
reputation of your builder. Before
selecting your builder, you can check on the standing of that builder with the Ontario New Home Warranty Program. You can also speak with your lawyer to see if your
lawyer is familiar with the builder.
The
warranty program essentially maintains a report card for builders. Although this is not an endorsement of any
particular builder by the warranty program, it does provide you with some
indication on the performance of that builder over the recent past.
As
in all Real Estate purchases, it is a good idea to have your lawyer review the
Agreement of Purchase and Sale before you sign it. This is the case with builder’s offers as well. It is not uncommon for builders to include
extra charges for various items in the Agreement of Purchase and Sale. Although most local builders do not pass on
many additional costs in this way, there are some builders who pass on many
additional costs to purchasers. We have seen
purchases where these extras exceeded $3000.00.
Some
of the costs passed on to you might include:
Most
builders’ offers have a standard provision to allow the builder to extend the
closing date if the house cannot be finished on time. This is a paragraph that
can be modified or deleted. Market
conditions will dictate the extent to which the builder will be flexible in
this regard. The Ontario New Home
Warranty Program provides closing extension rules for builders. If a builder has to extend closing for up to
five days, he may do so without any notice to the purchaser. If the builder wants to extend closing for
between five and thirty days, he must provide 35 days notice. If the builder wants to extend closing for
31 to 60 days, the builder must provide 65 days notice. If a builder does not give the required
notice, the builder may be liable to pay the cost incurred by the purchaser as
a result of the delayed closing for up to $100 per day to a maximum of
$5,000.00.
Most
builders’ offers provide that the builder may construct a house using the
mirror image plan of the house layout that you selected. This means that for some reason the builder
is not able to use the orientation you have selected, they may use the reverse
plan. If the orientation of your house
is important to you, you should make sure that this clause is deleted or
amended in your agreement.
Land
Transfer Tax is a large component
of the expense of every home purchase.
If you have never owned a home before, and you are buying a new home,
you may be eligible for a rebate for some or all of your Land Transfer
Tax. Your offer must be signed by March
31, 2000 and your transaction must close by December 31, 2000 in order to
qualify. This program has been extended
from year to year over the last number of years. It may or may not be extended in 2000.