In 2010, Cathy Dunphy and her husband, David Crichton, found their home in Toronto’s Beach neighbourhood was becoming a bit much to care for as they approached retirement. Then, they heard about a new condo development in the area – a retrofit of an old church. Crichton went to the open house and purchased a two-storey unit on the spot.
Few condos are completed on time. Most delays are only a few months, but some can last years.
While the condo wasn’t yet built, the couple was expecting to move in within a year or two. However, numerous delays kept pushing their move-in date. They finally took possession in early 2015 – almost five years after buying, and six months after they’d sold their home – and things then went from bad to worse. “There’s been problem after problem,” says Dunphy. For instance, they were surprised to find an odd column running up their living room and dining room – it was not in the plans – and that made it impossible to fit their dining sideboard into the space.
Every day, Canadians buy into condos that have yet to be built. In many cases, you can get a great deal if you purchase something that’s yet to be constructed, and moving into something that’s never been touched can be appealing. But buying a not-yet-constructed condo can be risky, too. “You’re buying, and it’s just a hole in the ground,” says Scott Thompson, a realtor with Coldwell Banker Prestige Realty in Vancouver.
Here’s how to protect yourself and make sure your new home is all you imagined.
Hire an expert
While you may get lucky and land a good unit in an attractive development, often the best suites get sold in advance of public viewings. Thompson suggests working with a realtor who has developer contacts. “You want someone who has VIP access who will get you into the sales centre before the public,” he says.
Factor in extra costs
When you buy a new condo, you pay a sales tax on closing – on top of all your other closing costs. (Some provinces rebate some of this tax.) Meanwhile, expect your condo fees to rise by at least $100 within the first year. “The developers always purposely underestimate them,” says Anne-Marie Ambert, who runs the Condo Information Centre website and has lived in Toronto condos most of her life.
Few condos are completed on time. Most delays are only a few months but, as Dunphy found out, some can last years. “You don’t want to rely too heavily on the date they give you,” says Thompson. Get a firm move-in date before you sell your house or you might find yourself temporarily homeless.
Scrutinize the plans
In new buildings, unit plans, which show how things will look when the building is completed, are a key part of the contract. The final product will likely be off by a few feet, and can contain minor changes, but there are ways to back out of the deal if the changes are dramatic. Also look at the plans for the entire development. “You may want to know what’s underneath you,” says Ambert. Nearby elevators, garbage chutes, party rooms and mechanical rooms could mean more noise, for instance.
Read the contract
In the fine print, you’ll find things like rules about owning pets, whether people can rent out their units and whether you automatically get a parking space or storage locker. If you have to sign up for such extras later on, “you have to be proactive,” says Ambert. She once bought a condo and was told that in six months they’d call to assign her a storage locker. No one called. She had to do it and was just in time to nab one.
Enjoy your new home
While preconstruction condos do come with risks, most owners love their new digs. With a new development, you get the benefits of the latest materials, and “everything is brand new and under warranty,” says Thompson. (The developer will fix most flaws you find upon move-in.) You also pick your finishes, so there’s no need for renovations. Do your due diligence early on, remain patient during construction and you’ll be rewarded with a new condo built just for you.