Have Money Waiting in the Wings - Prepare for those closing costs

Published in the Globe and Mail July 20, 2001.

Parts 1 and 2 of this column looked at many key provisions of the Agreement of Purchase and Sale to help purchasers better understand their legal rights and negotiate their agreements. This column will look at the two sets of additional costs associated with a new home purchase.

Depending on the competitive circumstances of the housing industry, a builder may seek to recover various costs, deposits and adjustments. Many of these adjustments reflect the out-of-pocket costs that builders incur because of municipal or governmental requirements. These costs can include some or all of the following:

1. Utility connections: The utility company usually charges a fee to install a hydro or water meter in a new home. The charge can be between $300 and $650 a metre.
2. ONHWP enrollment fees: Every home in Ontario is enrolled under the Ontario New Home Warranty Program (ONHWP) Plan Act. ONHWP requires every builder to provide statutory warranties insured by the government's insurance corporation. Usually, the purchaser must pay enrollment fees based upon the purchase price and ranging from $350 (plus GST and PST) to a maximum of $700 (plus GST and PST). In effect, the purchaser is paying the insurance premium for the extended warranty coverage provided.
3. Boulevard landscaping: Most subdivision agreements require tree planting on the street or boulevard in front of each house. This cost, often around $500, is usually passed along to the purchaser.
4. Driveway: Many homes are sold with gravel driveways, with the cost of the driveway paving being charged separately. You can usually expect to pay approximately $600 for paving.
5. Survey: Both the purchaser and the vendor need a survey showing the location of the actual building in order to confirm that its location complies with the municipal requirements for front, rear and side yard setback requirements and that it is located on the property. The survey cost may be passed along to the purchaser by way of   adjustment, and is usually around $500.

For the complete article view the document below.