When it finally is ready,
it's the wrong colour; it's a two-door instead of a four-door; it's
a completely different model and 10 inches shorter than the one
originally ordered; the promised CD player, power steering and trim
package are missing and the dealer wants another $4,000 in extras, a
detail buried in the small print of the contract.
If this scenario actually
happened, the repercussions would be swift and severe. The Ontario
Motor Vehicle Industry Council would be all over the car dealer, and
the federal government would not be entirely pleased with the
But when the same thing
occurs in the new home construction industry on a house worth many
times the value of a car, consumer protection is virtually
non-existent. That's why it's extremely risky to buy a new home
without having the offer reviewed literally line by line by an
experienced real estate lawyer.
While you're still in the
sales office, it's a good time to play 20 Questions. Even before the
offer gets to the lawyer, here's a list of questions the home
shopper should ask in the sales office:
you provide and sign a list of all of the extra costs hidden in the
pays development charge increases, the Ontario New Home Warranty
premium, new or increased municipal taxes and levies, utility
connections, provincial sales tax on appliances, sewer charges,
carbon monoxide detectors, blue box charge, tree planting costs and
survey fees? What's the maximum potential cost of these items?
the appliances going to be delivered and installed, or just
closing, does the offer require the builder's lawyer to clear title
unconditionally, or only if and when he or she receives a discharge
of the construction mortgages?
the offer oblige the builder to complete the ordered extras and
upgrades, or are they shown only as a purchaser request?
does the offer say that verbal promises made in the sales office are
not part of the home purchase deal?
aren't the architect's floor plans and the draft or final
subdivision plan attached to the offer?
does the builder have the right to change the building size, room
sizes, brick and interior colours and finishes, floor plan, exterior
design, and roof lines? Why can't we be sure now what house we are
the offer clearly state that the square footage is based on exterior
measurements? How much can this figure change? Is there any
guarantee of minimum room sizes?
the price include the furnace and water heater or do I have to lease
them? How much are the lease charges?
guarantee do I have that there won't be a hydro transformer vault on
or in front of the house?
the sales agent licensed by the province? Does he or she carry
mandatory professional insurance? Is he or she bound by the
regulations and requirements of the Real Estate Council of Ontario?
can't we attach the colour brochures to the offer as a schedule
showing the design of the house?
don't I get a rebate if the house or lot size is smaller than
do you know when the subdivision will be registered or when the
building permit will be issued?
happens if the municipality won't issue a permit for the promised
house style on my lot?
this offer is conditional on financing or my lawyer's approval,
where is that written?
I put a satellite dish, flagpole, clothesline, fence or swimming
pool on my lot?
guarantees do I have I'll get a refund of my subdivision damage
compensation do I get if the statutory 250-day closing extension
runs out and the house isn't finished? Will the builder kill the
deal at that point?
And a bonus question or
two: When do I get to meet the builder personally? Will he drop by
after closing to see how I like my house? Remember, verbal answers
don't count. Get them in writing. If sales staff won't answer the
questions in writing, it might be time to look elsewhere.