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General Condo Concerns – ONHWP, Deposits, Cooling Off |
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By: Jayson Schwarz
This issue’s articles will be fairly varied as what I am going to do is to respond to a few concerns that have been sent into to me by prospective purchasers. Hope the information helps.
- TARION - How does it work? Every builder must by law be registered. Check registration numbers and Tarion rating. Each home is enrolled after a permit is issued. In a condo situation both the common elements and the individual units have separate registrations. Make sure all of these are in place before closing. How much am I covered for? Tarion insures your deposit only up to $20,000 plus accrued interest, but under the Condominium Act (“CA”) provided the money is paid to the builder’s lawyers in trust all of your deposit is protected. Your condominium is covered by Tarion from the date you take possession and have completed your Certificate of Completion and Possession (CCP) and the common elements only after registration of the Declaration and Description.
- DEPOSITS - Most Builders put the name of their lawyer in the Agreement of Purchase and Sale. This makes sense, so you know where your money is going and that it is protected. THIS IS NOT ALWAYS THE CASE!!! I recently reviewed an Agreement of Purchase and Sale that had no provision for a third party escrow of funds. I believe this is sloppy drafting by the Vendor’s lawyers and would sure scare me if I was a Purchaser and particularly if I was giving a deposit in excess of the $20,000. Pursuant to Sec. 81(1) of the CA if the deposit is placed with the vendor’s solicitor it is protected. Further a major question is what about interest? On all Condos purchased under the provisions of the CA interest is payable according to sec 82(3) from the date it is paid until the Unit is available for occupancy. The rate is the Government proscribed rate which is 2% below the Bank of Canada rate which is used for short term advances to members of the Canadian Payments Association adjusted semi annually on March 31 and September 30 of each year.
- The 10 day “cooling off” period – Sec 73(2) of the condominium Act now says that you may rescind the Agreement provided you give notice within 10 days of the later of receipt of the Disclosure statement and the date you receive a copy of the Agreement of Purchase and Sale signed by the Builder.
Good luck and happy home hunting!!!!!!!!!!!!!!! |
