April 7th - 2008

More paperwork needed for new homes

Tarion Warranty Corporation is introducing new regulations regarding delayed closing and delayed occupancy warranties for new homes and condominiums which will come into effect on July 1.

Tarion Warranty Corporation is introducing new regulations regarding delayed closing and delayed occupancy warranties for new homes and condominiums which will come into effect on July 1.
 
These new rules mean all Agreements of Purchase and Sale used for new homes and condominiums must have the Tarion form of addendum attached. The addendum addresses issues, such as critical dates and early termination conditions, related to delayed closings or delayed occupancies.
 
There are separate addenda for freehold and condominium homes and under the new rules there are two types of addenda which may apply:

  1. Firm Closing or Firm Occupancy Dates option: These are transactions in which the vendor chooses a firm closing date (for freehold) or firm occupancy date (for condominiums) from the outset.
  2. Tentative Closing or Tentative Occupancy Date option: These are for transactions in which the vendor sets a tentative closing date (for freehold) or a tentative occupancy date (for condominiums) – a date on which the vendor believes the home can be delivered, but allows the vendor certain extension rights without having to pay delayed occupancy costs.

All Agreements of Purchase and Sale on or after July 1, 2008 must have the Tarion addendum attached, and it must be completed in full. For condominiums, as a general rule, one of the two forms must be attached to any Agreement entered into on or after July 1. However, there is a transition rule that if one Agreement in a condominium project (or a phase of a phased condominium project) is signed before July 1, 2008, then the whole project (or that phase of the project) is subject to the existing (not the new) delayed occupancy rules and therefore an Addendum need not be attached.
 
Copies of the final forms will be made available on Tarion’s web site at www.tarion.com.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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