For most, their home is the largest investment they’ll ever make. You cannot afford to make a mistake. You have a right to truthful and complete information, but sometimes the information won’t come out unless you take the time to ask the right questions. Here are four questions you should ask a condo developer.
What Happens If There Are Delays?
What happens if there are delays in construction due to financial difficulties, labor shortages or other issues? Ask if there is a clause in the preliminary contract that lets you be indemnified in case there is a late delivery. The worst-case scenario would be to pay for secondary living arrangements for a year or two before your condo is ready to move into. However, luxury units like the 100 Davenport often have a “no later than” date to reassure buyers that this won’t happen to them.
What Are All the Costs I’ll Have to Pay?
You’re not just paying for a condo up front or taking on mortgage payments for the unit. New condos come with a wide number of associated fees, the least of which is not the monthly condo association fees. You’ll have to pay the HST, utility connection fees, and possibly builder adjustments. All of these can pump up the purchase price one to three percent.
Another consideration is the budgeted common expenses. Developers are supposed to create a budget forecast for the first year of co-ownership. This should include foreseeable current expenses and administration of the common areas. Look over the numbers. Are they setting up a contingency fund to pay for major repairs and replacing the common portions as they wear out?
Are the Materials Used Those Specified?
Your condo may not look like the demo unit because they may not be required to use the same materials in your unit as they did in the showroom. Conversely, if they use materials other than those you choose and they are more expensive, you’re on the hook for the extra expense.
Developers can amend their larger plans, too. The outdoor pool may end up enclosed or completely open. The red bricks on the brochure may become red and gray in the final phase of construction. Would you be happy if they made changes like this? And what happens if the project is modified, reducing the superficial area in your apartment?
How Do You Determine the Size of Superficial Areas?
Take the time to inquire about “superficial” areas, because it is anything but superficial. Ask how they calculate the size of these superficial areas. If the builder says they use a detailed plan for the condo, ask to see the plan and how they determine the size. You don’t want to buy a unit based on gross numbers and feel cheated by the net size. Ask if the livable superficial area is based on the surface of the floor before or after things like walls, doors, windows and staircases are put in. This doesn’t just affect your quality of life; it affects the resale value of the unit, too.
As a future home owner, it is your responsibility to ask as many questions as possible so that you have all the information you need to make the right decision. A good developer will welcome these questions from prospective home buyers.