Close-Up on Closings - Carefully peruse the purchase agreement's closing conditions

Published in the Globe and Mail April 6, 2001.

Delayed closings in the GTA are not a recent phenomenon. During the real estate boom of the 1980s, an overheated market put tremendous strains upon the supply of new homes.

In 1988, consumer pressure resulted in the provincial building industry regulatory body, the Ontario New Home Warranty Program (ONHWP), legislating mandatory provisions to be included in an Addendum to each Purchase Agreement for a new home (excluding new condominiums). These provisions are intended to provide consumers with a number of protections.

Firstly, certain key terms of the Purchase Agreement are highlighted in the Addendum. These include the vendor’s rights of termination, approval by mortgage lenders, the right of the vendor to alter plans and specifications and the potential for adjustments to be made to the purchase price.

The vendor is required to inform the purchaser of the state of  registration of the plan of subdivision and the availability of building permits.

In our last column, we reviewed the problems that face developers and builders in the planning and building process and how it impacts upon the timing for completion of housing. Having this information assists the purchaser in assessing the potential for risk and delay in his or her transaction.

For the complete article view the document below.