New Homes

The importance of Offer Review
By Jayson Schwarz

One of the most serious issues facing a homebuyer - and it doesn't matter whether you buy a house, condo, townhouse, new or resale - is the Agreement of Purchase and Sale or Offer. Over the last few months, I have had a number of people bring me their Offer long past the time when they can have a lawyer comment on it; as a result, they were stuck with the terms and extra expense. Let's review. Condominiums: You have ten (10) days from the date the Offer is accepted by the Builder/Developer and you have received the Disclosure statement, to change your mind or back out of the deal. Some Builder/Developers take the position that the ten (10) days are counted from the day you sign the Offer. It is rarely worth arguing at this stage, so agree to work from the date you sign. This gives you an opportunity to see your lawyer, get suggestions, changes, and explanations and then - still within the ten (10) days - return to the sales office and negotiate for those important items that are usually left open, which I will describe later.

New Homes and Resale Homes or Resale Condos: No time is allowed after you sign unless you have ensured that there is a schedule or clause making the transaction conditional for a given period of time upon your lawyer's review and approval. This gives you an opportunity to see your lawyer, get suggestions, changes, and explanations and then return and negotiate. Here are a number of items to look out for, but recognise that this is not a comprehensive list, just a sampling:

1. Hydro and water installation and subdivision charges - get written maximums inserted;

2. Development charges and levies - have these deleted or obtain written maximums;

3. The vendor's lawyer's Law Society Levy - get this fee deleted - you pay yours, and they can pay theirs;

4. Driveways - the builder may say it is paved, but do they specify whether paving includes base and finish coat, or only a base coat?

5. Damage deposits - get a maximum and make sure there is a process for obtaining a refund

6. Mortgage clauses - are you stuck with the builder's mortgage and terms? - is there a clause requiring you to accept the builder's lawyers undertaking to discharge the mortgage without a discharge statement or direction to pay funds to the lender? - is the builder trying to make you pay to obtain partial discharges of a blanket mortgage

7. Condos do you own your parking and storage locker, or do you have only exclusive use?

9. Extensions how long? Are you contracting out of your Ontario New home Warranty rights?

10. Title is there a clause stipulating that you have to accept the builders undertaking to give you a deed if one is not available on Closing? There are many more issues that arise in an Agreement of Purchase and Sale or Offer. This document is the most important in the whole process because it sets the rules for you and the vendor. This becomes critically important when you realise that you need independent legal advice that will properly help you deal with this document. Only a lawyer can do this. If you are directed to a closing centre, make sure before you go there that a lawyer not employed or retained by the closing centre reviews your documents and gives you the opinion and advice to allow you to move ahead safely. In the meantime have fun searching and finding that perfect home.

Jayson Schwarz is a senior partner with the firm Schwarz Gillen Barristers and Solicitors. He can be reached at (416) 486-2040.