Legal Resource Guide

2013

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unilaterally reverse the layout of your unit or eliminate the balcony ���without you having any remedy whatsoever.��� Miller says the objective of getting legal advice is not necessarily to have the lawyer re-write the builder���s contract, but to educate buyers on what they are getting themselves into. He says lawyers can help buyers negotiate a cap on some of the fees and strike out some conditions, such as changing a unit���s layout without the buyer���s consent. They can also change terms so the purchaser doesn���t have to move into the condo unit while it is still under construction, but rather when construction is substantially completed. ���If you���re not prepared for changes, then don���t buy a new construction,��� Schwartz says. ���Buy one that���s already built.��� Schwartz says the costs of utility meters for water, hydro, and gas installations can also be passed on to the buyer. ���[Builders] will, very often, pass along the cost of that little connection . . . and the meter. That can be $700 or $800 right there.��� Where a subdivision or condominium is being built in a new area, the municipality may charge the developer ���standard form agreements will aDD anywheRe fRoM $5,000 To $10,000 in hiDDen CosTs onTo yoUR pURChase pRiCe.��� by a lawyer.��� He adds that although people should negotiate this term on a house purchase, they rarely do. The situation is different for new condos that haven���t been built yet. The buyer won���t actually receive a copy of the contract until after they���ve signed it. However, Schwartz notes the Condominium Act requires a 10-day cooling off period after the home buyer signs the contract. During that period, he says purchasers can have the contract reviewed by a lawyer so they know what they are buying. Miller says builders often hire sales people at their condo presentation centres who are not registered, licensed real estate sales agents. They sell the units, have people sign a contract, and ���persuade people that it���s a standard document, you don���t need to get a lawyer to look at it. ���Standard form agreements will add anywhere from $5,000 to $10,000 in hidden costs onto your purchase price,��� he says. They can also include clauses that will allow the developer to for the costs of bringing new infrastructure to that area, such as sewage, police, firefighters, ambulances, and schools. Schwartz warns that the builder may pass along these costs to the home buyer and they can be significant. If a buyer doesn���t address these issues before signing the contract for a new house or during the 10-day cooling off period for a new condo, they may be surprised later on with a large bill. Schwartz says when home buyers are aware of these potential extra costs, they can then budget another $4,000 or $5,000. As well, once these extras are pointed out to home buyers, many can go back to the builder and try to agree to a cap or ceiling on the amount they may have to pay. Once buyers have signed on the dotted line to buy a new home, it���s a done deal ��� there���s no backing out of the agreement. ���They can���t, unless the developer breaches the contract. A contract���s a contract.��� ���People are surprised at that,��� Miller says. ���[The builder] can actually force you to close. And if you don���t close, they can sue you for whatever damage they incur.��� And in the end, it���s usually the new home buyer that���s going to come out on the short end of the stick. ���By and large, the buyer is stuck with the contract and can���t easily get out,��� Schwartz says. ���There has to be some extraordinary circumstances, because the lawyers who draft [the contracts] are careful.��� 19

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