General Condo Concerns - ONHWP, Deposits, Cooling Off

 
This issue's articles will be fairly varied as what I am going to do is to respond to a few concerns that have been sent into to me by prospective purchasers. Hope the information helps.
 
1. Ontario New Home Warranty Program (ONHWP) - How does it work? Every builder must by law be registered. Check registration numbers and ONHWP rating. Each home is enrolled after a permit is issued. In a condo situation both the common elements and the individual units have separate registrations. Make sure all of these are in place before closing. How much am I covered for? Your deposit is protected up to $40,000 ONLY!!!. So be careful on those long, long, long closings. Your condo is covered from the date you take possession and have completed your Certificate of Completion and Possession (CCP) and common elements only after registration of the Declaration and Description. You are basically covered on homes enrolled after 1/1/91 for 2 years for listed minor defects and 7 years for major structural defects.
 
2. DEPOSITS - Most Builders put the name of the third party escrow agent in the Agreement of Purchase and Sale. This makes sense, so you know where your money is going. THIS IS NOT ALWAYS THE CASE!!! I recently reviewed an Agreement of Purchase and Sale that had no provision for a third party escrow of funds. I believe this is sloppy drafting by the Vendor's lawyers and would sure scare me if I was a Purchaser and particularly if I was giving a deposit in excess of the $40,000. One way around this is for the Builder to provide a copy of his excess deposit insurance certificate. Now under the New Act pursuant to Sec. 81(1) if the deposit is placed with the vendor's solicitor it is protected. Further a major question is what about interest? On all Condos purchased under the provisions of the new Condominium Act interest is payable according to sec 82(3) from the date it is paid until the Unit is available for occupancy. The rate is the Government proscribed rate which is 2% below the Bank of Canada rate which is used for short term advances to members of the Canadian Payments Association adjusted semi annually on March 31 and September 30 of each year.
 
3. The 10 day "cooling off" period - Sec 73(2) of the condominium Act now says that you may rescind the Agreement provided you give notice within 10 days of the later of receipt of the Disclosure statement and the date you receive a copy of the Agreement of Purchase and Sale signed by both parties.
 
Perhaps the most difficult part of writing these articles relates not the actual writing, but thinking of a topic to address. So help me!!! Mail, deliver or fax letters to the magazine or to us, use the web site (www.schwarzgillen.com), email (schwarzgillen@sprint.ca) and give us your questions, concerns, critiques and quandaries. I will try to deal with them in print or electronic form. Good luck and happy condo hunting I'll talk to you next issue!!
 

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