A $3-million class action by Ottawa condo owners is a cautionary tale about what can go wrong when buying a new condo.
So, how can you protect yourself? Toronto real estate agent David Fleming says his advice to clients is simple — don't buy new.
"I liken it to buying a pair of jeans. If you walked in [to a store] and you couldn't try them on and didn't know how long they would be, and what the waist was … that's a hundred-dollar pair of jeans. So why would someone buy a million-dollar condo the same way?"
Fleming said in his 13 years selling real estate, he has not been involved in the sale of a pre-construction condo.
Here are his tips on what people should think about before stepping foot into a showroom.
1. The people in the showroom are salespeople
Fleming reminds his clients that no matter how nice they are, the people in the condo showroom work for the developer.
His advice: if you are serious about buying, bring along your own real-estate agent.
2. You can back out
In Ontario, there is a mandatory 10-day cooling off period. Fleming said this law is in place to protect consumers.
Even if you fall in love with a display unit and sign a contract with a developer, he says you can still back out of the deal — with no penalty — within that 10-day period.
The clock on this 10-day period starts from the time you receive a copy of the fully signed purchase and sale agreement or the disclosure statement, whichever comes later.
3. Hire a lawyer
A condo is major purchase, so Fleming says buyers should always hire a lawyer to look over all the documentation.
This can take place during the 10-day cooling off period.
Fleming adds that if the lawyer finds things that concern them, the changes should be presented to the developer.
"If the developer says no, then don't go ahead with the transaction," Fleming says.