Looking at buying a new home from a builder? If so, there are some important considerations to keep in mind. While having a newly built home comes with its own set of pros, it’s important to know from a legal standpoint that unexpected situations can have costly and significant consequences if you are not prepared. Possession day delays, high interest penalties and incomplete work are just a few situations that can arise.

Move In Delays

One common issue that can arise is a delay on your move in date. If you were planning to be unpacking on possession day and your home is not ready, things could begin to really go wrong. Not only do you not get to move into your long anticipated space, but now you have to find alternate accommodation and put your belongings in storage, all at an additional cost and inconvenience to you.

While it may seem like the builder will need to assist with those costs, be ready to pay the full purchase price even if there is incomplete work, paint touch-ups required or other deficiencies. The typical builder contract does not allow for holdbacks in these situations.

Mortgage Funds Release

A further complication can arise where you have a mortgage and your lender does not send mortgage funds to your lawyer in time for possession. When this happens, you will likely be charged substantial penalties until the funds are paid to the builder, or worse, the builder may choose to terminate the contract which means you risk losing your deposit and you may be sued.

Additional Considerations

There are further considerations when buying a new home, such as whether there are restrictions against future selling, who the warranty provider is as not all are the same, using the builder’s lawyer to save on legal costs which ironically can end up increasing your costs, the lack of a Real Property Report and more.

Buying a newly built home can be very exciting and to keep it that way you should be aware of the risks and pitfalls before signing the contract. At LeClair Thibeault, our Calgary lawyers would be happy to discuss the new home purchasing process as well as your risks and obligations under the contract. Contact us via our website or call us today at 403-245-3500.