Things to Know When Buying A New Build Condo In Alberta
Things to know when buying a new build condo in Alberta
New condominiums are often marketed before construction begins. Often, you’re in a show room selecting your unit from a floor plan or model. This can be advantageous for buyers. You have your choice in which floor plan suits your needs, which floor and direction you face. It is the perfect time to discuss accessibility concerns. Upgrades to finishes, and the complete customization is available. New home warranty protection applies. All the bells and whistles, but it also can come with risks.
If you are considering a new build condominium do your due diligence. Research to see if the developer has any past projects that have any issues now and verify, they are a reputable developer. Associated risks can range from anything from hidden costs listed in your purchase agreement to your mountain view one day becoming obstructed by future construction plans in neighboring structures. Relying on an artist’s renderings and sketches may change and you cannot truly see what you have agreed to purchase.
Title Transfer And Possession Date
Notify your lawyer when you know your possession date. Your lawyer will start the request for a title transfer of the new build condo. When the buyer has title in their name, the funds for the purchase will be released to the builder. Subject to the unique terms of your purchase contract, there may be a per diem penalty if the builder is not paid on time. Subject to the unique terms of your contract. Therefore, having a lawyer review your new build contract is also very important as well.
The Alberta Land Titles Office timeline for registration of title historically has been around 3-4 weeks, but ever since the Covid-19 pandemic, we’ve seen an increase in that timeframe to up to 3 months. This poses several delays for all involved and has a trickle-down effect into many areas such as setting up utilities.
What Do I Do If My Move In Date Changes Or Is Delayed?
Initially when you purchase a new build condo, the developer must provide you with an occupancy date statement. The statement provides a fixed date or a range of dates that your unit will be available. You will need to provide 30 days written notice that you agree to these terms.
Once you receive notice from your developer that your unit will not be ready within 30 days of the final occupancy date (and this can happen), you have the right to cancel your purchase agreement with written notice if it is allowed in your contract.
If the developer has provided you with a written notice with revised final occupancy date, you can provide the developer with written acceptance of the revised final occupancy date or if you may
wish, you can cancel the purchase agreement. You can choose to cancel, but will need to provide written notice within 10 days of receiving the notice from the developer.A developer can delay occupancy for a legitimate cause without liability. The following are examples of event where you cannot cancel your purchase agreement:
- Explosion
- Fire or flood
- Impact by spacecraft, aircraft, watercraft, or land vehicles
- Malicious acts, vandalism, or riots
For more details as to reasons why the developer can delay occupancy visit www.alberta.ca
Occupancy Fees
Occupancy fees are fees paid to the developer between the time you move into your new build condo and the time you take ownership of your unit. At this point in time the developer still owns your unit, and your mortgage payments haven’t started.
Most developers don’t want a long occupancy period. It delays them from receiving money from the bank until all units are registered. The developer must provide you with an occupancy permit that proves your unit has passed all inspection safety checks and that your unit complies with city bylaws. It is a normal process and there is no way around it. Keep in mind there is no way to determine how long an occupancy period will be. On average they are 4-6 months. It is also known as interim occupancy. No two condominiums are the same.
High-rise condominium will have a shorter period. The lower the floor, the longer the period. Once your condominium is livable, you can move in. The developer cannot exceed the occupancy fees they disclosed to you when you signed the purchase agreement. If in doubt, discuss with your lawyer as sometimes developers will apply occupancy fees towards the final purchase price. Each contract is different so discussing this with your lawyer can be of great benefit. These fees will eventually become your condominium fees.
Final Closing
Once all units are registered with Land Titles, each unit will exit the occupancy period and will enter final closing. Once ownership of title is fully transferred to your name your mortgage payments begin. At this point any occupancy fees you were paying will stop.
We Can Help
It is important for people to understand legally binding contacts they enter into. This is true for new build condominiums. Reviewing your contract with your lawyer helps ensure you remain surprise free during the whole process.
Our whole real estate team is here to help you. Email us today to start the process of reviewing your contract. We usually need 2-4 days to complete the review and go over it with you. Since most contracts include a limited time for these reviews, ensure you leave enough time. Email us your contract, as email often works the best and the fastest to set up your review. Email our real estate team here. If you want to call, please call 403-225-8810. We are always happy to let you know the process.