Researching the local real estate market around the Greater Toronto Area is one of many things to do when you’re ready to purchase your next home. If you’re set on buying a condo, the condo developers’ track record, especially when it’s a pre-construction residence, will be something you want to look at closely.
After you’ve paid your deposit, signed the agreement of purchase and sale your lawyer notices that the contract is missing the all important capped levies clause. It’s possible you’re having a case of buyer’s remorse. In either situation there is often a way to get your money back in order to back out of the deal.
10 Day Cooling Off Period
In Ontario, Section 73 of the Land Act allows buyers a loophole when they purchase a pre-construction residence directly from a home builder, with a 10 day cooling off period during which they can rescind their sales agreement for any reason and walk away with no penalty. Any time after the 10 day time period will leave them with a legal and financial nightmare. Some things to keep in mind with regard to the 10 day cooling off period are as follows:
- The ability to rescind a sales contract is only good for 10 days after signing an agreement to purchase
- The 10 days includes weekends and not just business days
- The cooling off period only applies to pre-construction condos bought from a builder and excludes any other type of home purchase
Considering this small window of opportunity, buyers are advised about the following points:
- Have a real estate lawyer look at any agreement of purchase or sale to see if it contains any terms that are unfair to you the buyer. Development levies should be capped as well as clarification on whether the unit can be rented during the occupancy period are things that should be addressed before the 10 day cooling off period is up.
- Contact me, your mortgage specialist, to ensure you’re pre-approved and all financing is in place
- Should you need to use the 10 day cooling off period, don’t rely on verbal notification. Submit your intent in writing- it’s highly recommended using the services of a lawyer for this
Laws vary from province to province, in Ontario the cooling off period of 10 days is automatically granted to pre-construction condos purchased from the builder, while in British Columbia it’s only a 7 day period. If you need a mortgage broker like myself to help you with your mortgage process, contact me today to see how I can help
