Purchasers of a new build condominium sometimes find themselves in the unfortunate position of having paid deposits towards their purchase, but having to deal with lengthy delays in the completion of the project. When buying new build condominiums, purchasers should ensure that thorough research is conducted on the developer of the condominium. Researching other projects undertaken by the developer, as well as reviews from other purchasers will be time well spent when deciding whether or not to contract with a developer.
Section 82 of the Condominium Act makes provision for a developer or builder to pay interest on any funds paid as a deposit towards a purchase. However, purchasers should note that the prescribed rate as defined in the Ontario Regulation is defined as 2% below the bank rate. With bank rates between 2014 and 2018 averaging 1.25%, the purchaser earns zero interest on his deposit. Getting legal advice both before and after signing any preconstruction home contract can assist a purchaser in fully understanding the advantages, as well as the risks in buying a new build condominium.
