Are you considering the purchase of a pre-construction home or condominium? Here are some Frequently Asked Questions and Answers to assist with your decision.
How does buying a pre-construction home differ from buying resale?
Buying pre-construction means purchasing a home before it is built. Unlike resale, buyers commit to a future completion date, pay deposits over time, and secure a mortgage closer to final closing. Pre-construction offers new designs and warranties, plus an opportunity to select your specific finishes but involves longer timelines and builder-specific closing costs.
What is an Agreement of Purchase and Sale (APS)?
An Agreement of Purchase and Sale (APS) is a legally binding contract outlining the price, deposit structure, closing conditions, occupancy dates, and builder rights. Pre-construction APS agreements often include schedules and addenda with further details regarding costs and timelines, so careful review is essential.
Can the purchase price change after I sign the APS?
The base price is fixed, but final costs may change due to development charge adjustments, utility fees, HST on upgrades, or other items detailed in the APS addendum. Remington will provide you with a list of expected and potential Closing Costs in your APS.
Do I need a real estate lawyer for pre-construction?
Yes. Pre-construction contracts are complex. A real estate lawyer can review the APS, explain risks, and ensure you understand your obligations before firming the deal.
Should I use a real estate agent when buying pre-construction?
A knowledgeable real estate agent can help compare projects, assess builder reputation, explain pricing, and guide you through the process—often at no direct cost to the buyer.
What does freehold ownership mean?
Freehold ownership means you own both the home and the land outright, with no time limit on ownership. You are fully responsible for maintenance, insurance, and compliance with municipal bylaws.
What is a POTL (Parcel of Tied Land)?
A Parcel of Tied Land (POTL) is a freehold home tied to a Common Elements Condominium Corporation (CECC). Owners pay monthly fees for shared amenities such as private roads or landscaping, while remaining responsible for their individual home.
What is the difference between a POTL and a condominium?
Unlike a standard condo, POTL owners usually maintain their own roof, windows, and exterior. Condo corporations typically maintain both common elements and parts of the building structure.
What are condo fees?
Condo fees are mandatory monthly payments that cover maintenance, insurance, management, amenities, and reserve fund contributions for shared building components.
What do condo fees usually include?
They often include building insurance, cleaning, snow removal, amenities, security, management fees, and contributions to long-term repair funds. Some utilities may also be included. Condo owners are still responsible for individual Homeowner Insurance for the contents of their homes.
Why do condo fees vary so much?
Fees vary based on unit size, building age, amenities, staffing levels, and reserve fund requirements. Older buildings or luxury amenities generally result in higher fees.
What is an occupancy date vs. a closing date?
The occupancy date allows you to move in, while the closing date is when ownership legally transfers. Builders may extend these dates under conditions outlined in the APS.
Why do pre-construction projects get delayed?
Delays can occur due to material shortages, labour constraints, weather, or municipal approvals. Buyers should plan for flexibility and potential temporary housing needs.
What are occupancy (interim occupancy) fees?
Occupancy fees are paid during interim occupancy for condos and typically include interest on the unpaid balance, estimated property taxes, and estimated condo fees. Occupancy does not equal ownership.
What happens if the builder cancels the project?
If a project is cancelled, buyers are entitled to a return of their deposits. Deposit protection under Ontario’s warranty program may apply if deposits are not returned promptly.
What are typical closing costs for a pre-construction home?
Closing costs typically range from 1.5% to 7% of the purchase price and may include development charges, land transfer tax, legal fees, Tarion fees, utility hook-ups, HST on appliances, and occupancy fees (condos). Remington will provide you with a list of anticipated closings costs with your APS.
Do I pay HST on a pre-construction home?
HST is usually included in the purchase price for primary residences, assuming the buyer qualifies for the rebate. Investment properties may require the rebate to be paid upfront and applied for later.
When do I need a mortgage for a pre-construction purchase?
A mortgage is generally required shortly before final closing. Buyers typically pay deposits during construction and arrange financing closer to completion.
Are development charges capped?
Some builders cap development charges, while others allow increases up to a maximum amount. This information is detailed in the APS addendum.
What are assignment sales?
An assignment sale occurs when a buyer sells their pre-construction contract before closing. Builder approval, fees, and tax implications often apply.
What is Tarion?
Tarion is the not-for-profit organization that administers Ontario’s new home warranty program, ensuring buyers receive statutory protections for defects, delays, and deposits.
What is the Ontario New Home Warranties Plan Act?
The Act requires builders to provide warranties covering workmanship, building systems, structural defects, delayed closings, and deposits—up to seven years.
What is a Pre-Delivery Inspection (PDI)?
A PDI allows buyers to document deficiencies before or shortly after move-in. Not conducting a PDI with the builder does not affect warranty rights.
Is my deposit protected?
Yes. Freehold deposits are protected up to $60,000–$100,000 depending on price. Condo deposits are held in trust, with additional warranty protection up to $20,000.
What is homeowners insurance?
Homeowners insurance protects the structure, personal belongings, liability risks, and temporary living expenses. It is typically required by lenders.
Who maintains my home after I move in?
Maintenance responsibilities depend on ownership type. Freehold owners maintain everything, while condo and POTL owners share responsibility for common elements through monthly fees.
What happens if something breaks after I move in?
Most new homes are covered by statutory warranties. Issues should be reported to the builder and documented within required timelines. Remington purchasers can consult their Homeowner Manuals or speak with a customer service representative with questions.
Is buying pre-construction a good investment?
Pre-construction can offer long-term value, but returns depend on market conditions, location, and holding period. It is best suited for buyers comfortable with longer timelines.