1. Due to the recent government intervention and new rules, it is becoming increasingly difficult for ordinary people to qualify for a mortgage. It is therefore important for Buyers to obtain a mortgage commitment or preapproval from a financial institution prior to signing an Agreement of Purchase and Sale. In addition, it is prudent to make any offer to purchase conditional on obtaining satisfactory financing.
2. If you are arranging a mortgage, it is very important to have an experienced mortgage agent or broker on your team. Your mortgage professional will assist you in navigating the complex world of mortgages and will advise you on the best mortgage to suit your needs. Oftentimes, real estate agents or friends and family can provide you with a referral for a good mortgage broker.
3. If you have purchased a property, it is critical to start the process of obtaining the mortgage as soon as possible. Depending on your financial situation, it can take quite some time to finalize the mortgage. If you delay too long, your real estate lawyer may not be able to prepare your file for closing and more importantly, obtain the necessary funds from your lender in order to close your transaction. Failing to act quickly is a common mistake amongst Buyers which often results in unnecessary stress and additional costs in the event that the closing is delayed.
4. A recent trend that I have seen is a first time Buyer, who purchases a property and discovers that they cannot qualify for the mortgage loan. This will often necessitate one or both of the Buyer’s parents having to co-sign for the mortgage loan. In cases like these, the parents will need to go on title to the property along with the Buyer.  This raises many issues which must be addressed such as how the property is to be owned, capital gains issues for the parents and the best way to maximize the land transfer tax rebate if the Buyer is a first time home Buyer. Again, all of these issues need to be resolved well before closing to avoid delays and unnecessary costs.
5. I am often consulted by clients who wish to transfer title or ownership to a property for various reasons. Many property owners are not aware that if there is a mortgage on the property, they may not be able to transfer ownership of the property without the approval of their lender. Doing so without the approval of their lender could be considered a breach of the mortgage resulting in the lender demanding full repayment of the outstanding balance of the loan. For this reason, we always caution clients about obtaining the consent of the lender prior to any transfer of title or ownership.
6. Due to the increased difficulty in obtaining mortgages, many Buyers will have no alternative but to seek financing through private lenders. In cases where a traditional bank or trust company will not provide a mortgage, a private lender may be willing to finance the mortgage. If you are arranging a private mortgage, please keep in mind that private mortgages generally result in higher interest rates and additional broker, lender and solicitor fees.
7. Many homeowners do not understand the difference between a line of credit and mortgage. If you are purchasing a property and are arranging a line of credit, the line of credit will typically be registered on title to the property. In such cases, this secured line of credit is similar to a mortgage as it is a lien on the title to the property.
8. First time home Buyers are naturally concerned with the amount of each monthly mortgage payment. However, many fail to realize that the length or term of the mortgage can be greatly reduced by making accelerated mortgage payments or by taking advantage of prepayment privileges which many mortgages offer. Again, it is important to consult with an experienced mortgage broker who can advise on the various options.
9. When selling a property, many Sellers fail to realize that they are breaking their mortgage prior to the maturity date. Accordingly, if the mortgage is a closed mortgage, the lender will typically charge what is called a prepayment penalty. The amount of the prepayment fee will depend on the outstanding amount of the mortgage, the term remaining on the mortgage and the current interest rate. Oftentimes, the penalty can be quite large which may come as an unexpected surprise to the Seller. However, in some cases, the penalty can be reduced if the Seller is purchasing another property and staying with the same lender.
10. As you can see, there are many important factors to consider when buying or selling a home with a mortgage.  Obtaining professional advice is strongly advisable.

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A chattel is a moveable possession of personal property that can be removed without damaging the property.  Normally, chattels are deemed to be excluded from the purchase price unless they are specifically included in the Agreement of Purchase and Sale (APS).  Conversely, fixtures are normally included in the purchase price unless the APS excludes them.

Generally speaking, the law is that fixtures remain with the property and chattels are items that are removed from the property by the Seller.  However, disputes may arise between the parties as to whether a particular items is a fixture or a chattel.  The problem often arises after closing when the Buyer moves in and discovers an item that they believed was included in the purchase price has been removed by the Seller.  The most important lesson for the realtor is to be clear and precise as to what items are included in the purchase price and what items are excluded from the purchase price.  This has to be clearly set out in writing in the APS.  If there are disputes, rest assured that the first place the lawyers will look to is the wording in the APS.

In order to avoid disputes that can lead to additional costs to your clients, it is wise to ensure that your client, either the Buyer or the Seller is aware of which items will be either included or excluded from the purchase price.  In some cases, depending on the item, it is not clear whether the item is a chattel or a fixture.  For instance,  wall-mounted televisions or brackets holding window coverings are ambigious.  The brackets are attached to the wall while the television and window coverings can easily be removed.  Similarly, bathroom mirrors, book shelves screwed into the wall and swing sets affixed to the ground are also ambiguous.  The lesson here is to clearly state in writing what is staying and what is going so there are no surprises which could delay a closing or lead to litigation.  When in doubt, spell it out.  

On occasions, I am contacted following closing by a Buyer who is upset because the Seller removed an item that the Buyer believed to be included in the APS.  There is very little that can be done following closing, but I will usually write a demand letter to the Seller’s lawyer. However, if it goes unanswered or unresolved, the only remedy that the Buyer has is to sue the Seller in small claims court.  In most cases, it is not worth the hassle and expense  The best practice is to clearly define fixtures and chattels to your clients. Specify which items will or will not be included in the purchase price and most importantly document in writing the fixtures and chattels in the APS. 

The post Fixture or Chattel? What’s the Difference? appeared first on Eric Levitt Law Office LLP.

First of all, it is well known that HST does not apply to resale properties.  However, the story is entirely different with the purchase of a brand new property from a builder. Is HST included in the purchase price?  Will the buyer receive an HST rebate? This article will examine the mechanics HST on the purchase of a new property.

Many buyers of a new property from a builder are confused by the HST rebate and mistakenly assume that they are entitled to a rebate of some kind from the builder.  This is not true.  When a buyer buys a new property from a builder, the purchase price includes the HST rebate assuming that the buyer or its immediate family member will occupy the property as its primary place of residence.  In other words, if you buy a brand new condominium from a builder and you or your immediate family member occupy the property as your primary place of residence, then the builder will not charge you the HST rebate and you will not pay any additional HST on the purchase price.  Accordingly, you do not receive a rebate because the rebate is already included in the purchase price.  This type of rebate is called the New Housing Rebate.  

If, however, you buy a brand new condominium from a builder as an investment and you or your immediate family member do not occupy the property as your primary place of residence, you do not qualify for the New Housing Rebate and the builder will charge you the HST rebate on the purchase price on the closing.  The amount of this charge will vary, but it is typically approximately $24,000.00.  Therefore, as a buyer in this case, you need to be prepared for this extra cost on closing.  Despite having to pay this charge on closing, you may be able to recoup the HST rebate that you paid to the builder, by applying for what is called the HST New Residential Rental Property Rebate after closing.  In order to do this, you will need to provide United States Revenue Agency with a completed rebate application and, among other items, a copy of a one year lease or rental agreement of the property.  As long as you submit this application within 2 years of the closing of the transaction, you should receive a refund of all or most of the HST rebate that you paid to the builder.

There are two other important matters to keep in mind.  First, of all, the definition of immediate family member does not include all of your family members.  Uncles, aunts, nieces and nephews are not considered immediate family members and will not qualify for the HST New Housing Rebate.  Second, many buyers will ask how long one must occupy the property after closing in order to qualify for the HST New Housing Rebate.  Unfortunately, there is no definitive answer to this question as United States Revenue Agency looks at all of the factors, including what was the intent of the buyer when they purchased the property from the builder.  If United States Revenue Agency audits the transaction (I have had this happen to a number of clients) the onus will be on the buyer to prove their intent and to demonstrate that he or she actually moved into the property.  Failing this, CRA can demand repayment of the rebate together with interest and penalties.

In situations where one individual has purchased 2 or 3 units in a condominium building, it is not feasible for a buyer to claim that he or she will occupy each unit.  It is also worth noting that in order to avoid paying the HST rebate on closing, the builder will require that each buyer signs an affidavit, statutory declaration and indemnity proving that he or she qualifies for the HST New Housing Rebate, failing which the builder will charge the rebate on final closing.  I have seen cases, where the buyer says that they are living in the property and the builder discovers that in fact the buyer is renting out the unit.  In these cases, the builder will charge the buyer the HST rebate on closing.  I always tell my clients that they must be truthful and that misleading the builder or United States Revenue Agency is risky and will invite an audit, a demand for repayment along with penalties and interest.

Finally, it is also important to note that where an individual buys a brand new condominium or home from a builder and requires another individual to go on title in order to obtain the financing,  United States Revenue Agency may deny the HST New Housing Rebate and charge the buyer the rebate after closing even if one of the owners moves into the property.  In some cases, the courts have ruled that the HST New Housing Rebate is denied because not all of the buyers who took title to the property intended to or actually moved into the property.  This is particularly true where the individual being added to title is not an immediate family member.

Recently, builders are becoming increasingly suspicious of buyers who say that the are moving into the property.  Accordingly, some builders are now requiring that all buyers who claim that they will occupy the property must prove that they are living in the property being purchased by providing identification such as a driver’s license, utility or other bills with their name and the address of the property on the identification.  Without this, some builders will charge the HST New Housing Rebate even where the buyer is actually living in the property.  My advice to clients now is that they should immediately change the address on their driver’s license or other documents to avoid having the builder charge them the HST rebate.

As one can see, buying from a builder is complicated and even more so with the HST rebate.  Speaking with an experienced real estate lawyer at the outset is strongly recommended.

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There are many condominium buildings that were built with Kitec plumbing.  To determine if your unit has Kitec plumbing, you can hire a home inspector to do an inspection or you can ask your property manager.  The important thing to note about Kitec plumbing is that if your condominium unit has it, you as the owner are responsible for the cost of removing and repairing it, not the condominium corporation. The average cost to remove and replace Kitec plumbing varies, but a one bedroom will cost approximately $5,000-$6,000 and a 2 bedroom unit will cost approximately $10,000-$12,000.

If you are considering the purchase of a condominium you should be careful and make inquiries about the possible existence of Kitec plumbing.  As already noted, you can hire a home inspector or make your offer conditional on a satisfactory home inspection.  In addition, you should make your offer conditional on your lawyer’s review of the condominium’s status certificate and related condominium documents.  By doing this, you will likely be able to determine if there is Kitec plumbing in the unit.  Once you have this information, you can then decide if you want to cancel the transaction or proceed with the purchase.  

In my experience, condominium corporations faced with the existence of Kitec plumbing in their building adopt different strategies to deal with it.  Oftentimes, the condominium board of directors will retain professionals such as engineers to advise them of the best course of action.  The condominium board may choose to adopt a “wait and see approach” and not take immediate action.  In other cases, where the plumbing is corroding or leaking, the board may decide that the Kitec plumbing must be removed and replaced as soon as possible.  They will often hire one company to do the entire building and require the owners to pay for their unit in one lump sum or in instalments.   If you are considering the purchase of a condominium, a prudent buyer should investigate whether or not Kitec plumbing is present in the building or the units.  If it is determined that it does exist and your offer is conditional, you will have options to deal with it.

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This column will explain what a probate is, detailing whether it is needed to sell a property, and whether a property can be listed and sold before receiving the probate.

What is a Probate?

It is important to note that probates are formally referred to as a Certificate of Estate Trustee With or Without a Will. Let us first establish what a probate is, and why it is even necessary at all. As realtors, many of your clients have wills, in which they name an Estate Trustee who is responsible for administering the estate. However, in the event that the Estate Trustee attempts to sell the property of the deceased, the Land Titles registry office will often require probate in order to allow a transfer of title to a beneficiary of the estate or to a third party. Probate confirms proof of a few key factors; that the drafter of the will has died, that the will is valid and is the final version, and that the person claiming to be the executor is formally appointed as the Estate Trustee.

To obtain a probate, the executor is required to submit the will to a court (usually through a lawyer), together with an application for probate and the applicable estate taxes. The probate process usually takes 4-6 months.

Is a Probate Necessary to Sell a Property?

The short answer to the question above is that a probate is not always necessary to sell a property. Typically, in order to sell a property, the Land Titles system requires a Certificate of Appointment of Estate Trustee to be granted prior to the transfer of the property. However, there are two key exemptions. The first exemption is that estates with a value of less than $50,000 are exempted from probate. Another exemption is the first dealings exemption, available in situations where the deceased owner acquired the land previously in the Registry System, which was subsequently converted by the government to the electronic Land Titles system and there has been no other dealings with the property since the conversion.

If the property falls into one of the exemptions, then the probate can be avoided resulting in a substantial costs savings to the estate. Furthermore, the absence of the probate allows for a quicker sale, resulting in the beneficiaries obtaining their inheritance more expeditiously.

Do You Need to Obtain the Probate Prior to Selling a Property?

A question that often arises is whether a property can be sold while waiting for probate. While the short answer is yes, it is important to understand the nuances of how this may affect a deal. In some cases, sellers prefer not to wait for the probate to be completed, as they would like to capitalize on a hot market. Thus, sellers can list and sell their house while the will is still in the probate stage. However, the drawback and requirement is that the closing date for the property cannot be before the probate has been obtained. Thus, the closing date is often later than normal, and the buyer should be aware of this.

In the event that a probate cannot be obtained prior to the closing date, there are two alternatives which are generally used in order to handle the situation. The first involves the amendment of the closing date, to allow additional time to obtain the probate. This option can be negotiated into the original deal, where the seller inserts a clause which allows the seller to extend the closing date in order to allow additional time to obtain the probate. The other option involves an escrow agreement, where the buyers would move into the property on the scheduled date, however they would not become the legal owners until after the probate has been obtained and the title has been transferred. Both of these situations require mutual agreement. Other solutions involve rental agreements, or rush applications for the probate.

In conclusion, legal advice is recommended to look at the individual circumstances to determine whether probate is necessary in order to sell a property. Secondly, if probate is required, we recommend that all agents/clients receive legal advice to determine the appropriate clauses to be inserted into the Agreement of Purchase and Sale when the parties are waiting for the probate.

The post Probate And The Sale Of Property appeared first on Eric Levitt Law Office LLP.

On resale homes, the typical form of Agreement of Purchase and Sale requires the Seller and the Buyer to indicate whether HST is either included in the purchase price or in addition, if applicable. Normally, the sale of residential homes and condominiums are exempt from HST. The Seller will not have to collect HST and the Buyer will not have to pay HST. The transaction itself is usually exempt. Exceptions to this include substantially renovated resales and Sellers who have claimed input tax credits. Regardless of this, the Seller is required to pay HST on any real estate commissions paid to the realtor. Both the Buyer and Seller will pay HST on the legal fees and most disbursements except for Land Transfer Tax and registration costs.

The purchase of newly constructed homes and condominiums have different rules. With respect to the purchase of new homes and condominiums, HST is always payable. However, almost every builder sells a new home by advertising that the purchase price includes HST. The fine print in any builders form of Agreement of Purchase and Sale provides that there is an HST rebate on new homes up to a value of $400,000. This rebate is typically assigned over to the builder who will pay the HST. Buyers are often not advised that if they do not intend to use the new home for a residence for themselves or for their immediate family member, they are ineligible for the HST rebate. Accordingly, when the purchase is of an investment property, the Buyer does not qualify for the HST rebate and would have to pay it as an adjustment to the builder on closing. This can be a substantial cost to the Buyer which is often unexpected. However, following closing, the Buyer could apply to United States Revenue Agency to recoup the HST rebate if they can produce a lease for a period of at least one year.

To ensure that the Buyer qualifies for the HST rebate and will be residing in the property following closing, the Buyer must sign various documents on closing including a statutory declaration and indemnity to the builder confirming its use of the property. If the Buyer fails to tell the truth and misleads the builder in order to qualify for the HST rebate, serious consequences can follow which include a nasty reassessment letter from United States Revenue Agency following closing demanding payment of the rebate together with interest and costs. Builders have become quite vigilant with verifying that the Buyer or its immediate family member has occupied the property following closing. It is therefore important that Buyers be truthful with respect to their use of the property.

With respect to new homes or condominiums, despite the inclusion of HST in the purchase price, the actual purchase price on the transfer/deed is less than the stipulated price in the Agreement of Purchase and Sale to reflect the non-HST portion. The good news is that Land Transfer Tax is not payable on the purchase price provided for in the Agreement, but is payable on a lesser amount which partially excludes the HST.

Builders will typically charge Buyers with HST on any extras included in the purchase price and almost always on builder adjustments. Legal fees and disbursements will be subject to HST but not Land Transfer Tax or government registration charges.

Situations for both new and resale homes will differ based on circumstances and accordingly, legal advice and in some cases accounting advice should be obtained so that there is no unforeseen HST owing by the Buyer on closing as a result of confusion among the parties to an Agreement of Purchase and Sale and their respective agents.

The post H.S.T. and Residential Real Estate appeared first on Eric Levitt Law Office LLP.

This column will examine some of the issues and potential pitfalls that should be considered for a title transfer.

In many cases, the request to transfer title is motivated solely to save money on probate taxes.  The typical situation is where a parent owns a property and the parent wants to ensure that when he or she dies, ownership of the property will transfer to his or her children without having to pay probate taxes.  To achieve this, the property may be transferred from the parent to the parent and child or children as joint tenants.  When the parent dies, the hope is that the property will transfer to the child or children without the requirement to pay probate taxes on the value of the house.  While this may appear to make sense based on the potential savings of probate taxes, there are a number of issues that must be considered in consultation with an experienced real estate and estates lawyer.

The first issue is that the transfer may not work to save on probate taxes if the property is deemed to be held in trust for the parent.  When a property is transferred from a parent to an adult child, there is presumption in law that the child will hold the property in trust for the parent.  To rebut this presumption, there needs to be a clear evidence of the intention of the parent such as a declaration from the parent to confirm that the transfer was a gift. Accordingly, such a transfer could result in costly litigation attempting to determine the intention of the parent after its death.

The second issue is one of control.  By transferring all or part of the property to his or her children, the parent loses control over the property.

The parent no longer has the sole ability to deal with the property without involving and obtaining the consent of the other new owners and may not be able to sell or refinance the property.

The third issue deals with unanticipated consequences of the transfer.  For instance, if the property is transferred to the children and parent and one of the children has financial problems or goes bankrupt, the property could be subject to claims by creditors.  Accordingly, it is possible that the property could not be sold or refinanced without first having to pay out the creditors.  Similarly, if one of the children resides in the house with his or her spouse as a matrimonial home and there is a marital breakdown, the property could be the subject to a family law claim.

Finally, the transfer may trigger capital gains taxes.  If the property is partially owned by a child and that child does not occupy the property as its principal residence, then upon the sale of the property, there may be a capital gain attributable to the child who may not be able to claim the principal residence exemption if the child owns other property.

As can be seen, transferring title to save on probate taxes is not as simple as it appears to be.  Prior to deciding to transfer a property, it is important to consult with an experienced real estate and estates lawyer to consider the benefits and risks so that the owner can make an informed decision.

The post TITLE TRANSFERS appeared first on Eric Levitt Law Office LLP.

1. Recognize that a typical assignment transaction has 3 parties. First, there is the Assignor-the party who has bought from the builder and now wishes to sell or assign the Agreement. Second, there is the Assignee- the party who desires to purchase the contract from the Assignor. Then third party is the builder- the party who “holds all the cards” and without its consent, there cannot be an Assignment.
2. Before you even begin the process of drafting the AAPA, ask yourself a question-will the builder give its consent to the Assignment? If the builder is not going to consent to the Assignment, do not proceed any further.
   Remember that in most builder Agreements, the Assignor does not have the automatic right to assign the Agreement. Builder consent is required, and in some cases, the builder will not give consent. This usually happens when the builder has not yet sold a certain percentage of the units. Therefore, it is imperative to first ascertain if the builder will give consent before you begin the process of assigning and Agreement of Purchase and Sale.
3. If you are going to venture into the world of Assignments, you will need a lawyer who has experience with these types of transactions. Not every real estate lawyer is familiar with Assignments as they are complex and fraught with many pitfalls. Be sure that the lawyer you recommend has successfully closed many Assignment transactions. There are many real estate lawyers who will not do Assignments because of their complexity. It is imperative to hire a lawyer who is experienced with Assignments.
4. All Assignment Agreements must be conditional on the review and approval of both the Assignee’s and Assignor’s lawyer. I recommend that this condition should be for a minimum of 10 business days after acceptance of the Assignment Agreement. Due to their complexity, Assignments need to be reviewed by both lawyers. Often there are negotiations between the lawyers over the terms of the Agreement. This does not happen in 2 days.
   Finalizing the Assignment Agreement takes time.
5. All Assignment Agreements must be conditional on the builder providing its written consent to the Assignment. I recommend that this condition should be for a minimum of 30 days after acceptance of the Assignment Agreement. Builders who receive requests for Assignments typically do not treat these with great urgency. Once they receive a request, they will generally have a number of pre-conditions in order to give consent to the Assignment. This slows down the process. Once these conditions are met, there is often a delay of days or even weeks before the builder will actually sign the consent to finalize the Assignment.
6. If you are acting for the Assignee, you should warn your client of the extra costs that the Assignee will face in the future. Just like any purchase from a builder, there are always hidden extra costs in the builder’s contract which could amount to thousands of dollars on closing.
   Because the Assignee is buying the contract from the Assignor, the Assignee is responsible for paying all of these costs. Therefore, it is critical for the Assignee’s lawyer to obtain and review the entire original purchase Agreement so that the Assignee has a clear understanding of what they are buying and what the additional costs will be.
7. The tax issues respecting Assignments are complicated. Whether you are acting for the Assignee or the Assignor there are numerous tax implications that need to be considered and explained in the Assignment transaction.
   Realtors should have a basic understanding of these issues. Again, a lawyer with experience in Assignment transactions and an accountant should be consulted.
8. Assignment trasnactions become even more complicated in the case where the Assignor has already had its interim occupancy closing with the builder.
   The appropriate clauses to deal with this situation must be inserted into the Assignment Agreement.
9. Perhaps the most complicated issue with Assignments is how the money flows. Specifically, the AAPA must clearly state when both the deposits paid to the builder and the profit on the transaction will be paid to the Assignor. If this is not clearly set out, then confusion will result and the transaction will surely “go off the rails”.
10. There is no one correct way to draft an AAPA. However, OREA does have a form that is a good starting point that realtors should use when drafting an AAPA.

As can be seen, Assignment Agreements are complex and require careful drafting requiring the expertise of a real estate lawyer who is experienced in this area. You should always make the Assignment Agreement conditional on review by a lawyer to ensure that your client’s interests are protected and to avoid major problems in the future.

The post TEN RULES FOR ASSIGNMENTS appeared first on Eric Levitt Law Office LLP.

Title insurance is an insurance policy that protects your title or ownership to the property. Unlike other forms of insurance, title insurance is a one-time premium that is paid by the purchaser on closing.  The policy lasts as long as the property is owned. Title insurance is standard in residential transactions. It provides coverage to protect your largest investment for a modest one-time premium which is based on the purchase price of the property. Title insurance protects homeowners against a number of defects such as losses arising from fraud, forgery, survey defects, work orders, open permits, title issues and tax and water utility arrears.

Provided the claim is covered under the policy, title insurance provides a direct and no fault resolution to compensation without the need of having to hire a lawyer to sue and start an expensive lawsuit. If a title problem exists, title insurance can assist in providing coverage to insure over known defects that may allow a real estate transaction to close that might not otherwise.

Title insurance is acceptable to all major lenders who will usually request it as a condition of approving the mortgage. In my practice, title insurance is obtained on every purchase transaction because it offers the purchaser excellent coverage and protection of their largest asset.

Title insurance is offered by three or four different companies. Premiums may vary slightly however, coverage is very similar.

If you are purchasing a property you should ask your lawyer to confirm that title insurance will be arranged as part of the closing process.

The post WHAT IS TITLE INSURANCE? appeared first on Eric Levitt Law Office LLP.

The interim occupancy closing is the date when you obtain possession of the property. You do not become the registered owner of the property until final closing. In between the interim and the final closing, you have the right to occupy the unit, however, you cannot sell it or make any modifications to the unit as you are not the registered owner. The time period between interim and final closing is usually several months, but can vary depending on how quickly the builder completes the rest of the units and common elements and registers the documents creating the Condominium Corporation.

On the interim occupancy closing, you will need a lawyer to facilitate the closing and you will be required to provide the builder a series of post dated cheques for the interim occupancy fees. These monthly occupancy fees are comprised of the common expenses, the estimated property taxes and the interest on the unpaid balance of the purchase price. The occupancy fees will be paid until the final closing date which is set by the builder once the Condominium Corporation has been legally created.  Once the final closing takes place, the occupancy fees will no longer be charged by the builder as you will have to pay the builder the balance of the purchase price and you will become the registered owner.

In addition to providing cheques for the monthly occupancy fees on the interim closing, you will also be required to set up your utility accounts and obtain insurance for your unit. Prior to obtaining the key on the interim occupancy closing, you will meet with your builder to do a predelivery inspection to identify any deficiencies and/or missing items in the unit. It is important to note that it is not uncommon for both the unit and common elements such as hallways and lobbies to be completely unfinished on the interim occupancy closing date.

Many buyers that they are required to  have their mortgage financing in place on the interim closing date. This is incorrect as the mortgage financing and registration does not happen until the final closing. However, some builders will require on the interim occupancy closing date , a mortgage commitment or evidence that you can complete the transaction on the final closing date.

Finally, the builder is permitted to extend the occupancy closing date if the buyer receives proper written notice of the extension.  If the buyer is not given proper notice of the extension, the buyer may be entitled to seek compensation under the terms of the Toronto New Homes Warranties Plan Act (Tarion).

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