The purpose of this article is to share some thoughts for people thinking of buying a new condo, who haven’t done so before. It is based on my experience working for a condo development company, where I did walkthroughs with purchasers. It was surprising how many people did not know how the industry works and what to expect.
Most new condos are sold (or there’s an attempt to sell) before the condo is built. So, as a buyer, you really don’t know when it will be built. Fortunately, the new Condominium Property Amendment Act will hopefully improve things, by requiring set dates for completion, but it won’t fully solve the practical reality that delays happen (even after it is fully implemented). Nobody can guarantee absolutely a building will be built by a set date. Even if you can get your money back, you’ve still had your capital and your life disrupted for a lengthy period of time when things aren’t completed. Also, if real estate prices go up, you probably don’t want a refund on your deposit. You just want your home built on time.
The next reality of new developments, is they are generally still being developed when you take possession. Unless the property is 100% done when you agree to purchase it, it may not be 100% done when you take possession. That means have construction on the project after you have moved in your new home. It probably even means things being fixed in your individual unit. Some people just never realized their family would be living in the middle of a heavy construction project.
It goes without saying you need to read your contract. But, it does need to be said that a contract is only worth something if you are actually prepared to go to court to enforce it. Any developer will without hesitation go to court to enforce a purchase agreement. But, it is daunting task for a purchaser. Often, a purchaser’s lawyer does little for them, except process paperwork. Everyone knows to hire a lawyer, but not everyone knows to actually use them for what they’re good for advice, and action. If you have the funds and willingness to sue if needed, don’t buy a condo that has not been built yet.
If you have already purchased a new condo and have encountered deficiencies, what should you do. Document, document, document. Make sure you go to your prescribed pre-occupancy walkthrough with the developer. Take pictures or video of all problems. Take your own notes of issues. It’s best to have at least one person with you, so one can record things, while the other talks to the developer’s representative. Repeat that when you have the possession day walkthrough. After you’ve moved in, you’ll find more problems. It’s normal. Put everything in writing. Keep records of all your communication.