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Friday, July 1, 2022

Check that a new condo is legally built and meets all codes

I’m interested in buying a new construction condominium. How can I be sure it is being built legally?

It goes without saying that all buyers want to make informed choices, find a home they like, and have a smooth real estate transaction. I would like to share some things you can do to avoid surprises and be confident that the new construction home you intend to purchase is being built lawfully.

This is important to watch out for, not only because of the potential legal implications, but also because of safety concerns. When condominiums — commonly referred to as condos — are built illegally, there is a chance they may not have been constructed to code with proper due diligence, and they may have substantial defects that can be dangerous.

Such illegal builds violate the New Home Construction Licensing Act, which is administered by the Home Construction Regulatory Authority (HCRA), and the Ontario New Home Warranties Plan Act, which is administered by Tarion.

To eliminate the risk of unknowingly buying a condo that has been built illegally, I strongly encourage you to hire a real estate agent to help you navigate the buying process. They will be able to protect your best interest throughout the transaction, and they can take steps to confirm that the home is being built following the necessary protocols and laws.

This includes getting as much information as possible about the property, the builder and the developer. As well, your agent can check the HCRA’s Ontario Builder Directory to confirm that the developer and builder are licensed to build and sell homes in the province, and whether the home is registered for the warranty program. The directory also discloses any past conduct records.

I would also encourage you to thoroughly review your purchase agreement, which contains important information about your rights, your builder’s rights and the property. I would also point out that you have 10 days to cancel your purchase according to the law. So, if you decide after reviewing the agreement that you no longer wish to proceed with the condo purchase, you can terminate the agreement and get your deposit back.

With any new home purchase, I strongly recommend that you do your research, ask questions and get advice from a lawyer who is insured to practise real estate law before signing the agreement. Your legal counsel can also help research the condo you’re interested in, review all the documents including the status certificate and ensure that you understand both, your obligations and the builder’s obligations before you finalize the deal.

All the best.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.

Joe Richer is registrar of the Real Estate Council of Ontario (RECO). This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions. Follow RECO on Twitter: @RECOhelps

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