Contractual Issues Related To Purchasing A New Home

Hello folks, this is my first time writing a blog, so please forgive me if it is not what you are used to seeing. I am a real estate lawyer in Brooklin and the Durham/GTA area and I look forward to providing as much information as I can on this site to help you understand the process of buying and selling a home from a real estate lawyer’s perspective. Please feel free to email questions to me that you would like to see answered here on you may send your questions to me by emailing from my site .  I very much look forward to your questions.

For this blog I will discuss the contractual issues related to purchasing a new home. Like many homeowners in Brooklin and surrounding areas I purchased a new home from a builder a one point. I have also represented many clients with many different builders and I have seen an awful lot of these new home contracts. The most important thing you need to know is that the contract was drawn up by the builder’s lawyer. Obviously, almost everything in the agreement favours the builder (even the tiny size of the type). Most of these items are not really negotiable and if you try to change them (particularly if the builder is selling houses like hot cakes!!) they will say no, they just move on to the next customer.

A real estate lawyer can help in a number of ways and most lawyers (including me) will review the agreement for free if you use us for the transaction. The most important thing a lawyer reviews are the “adjustments on closing” these are additional fees the builder intends to charge you on closing (no they are NOT included in the purchase price on the first page) – they can relate to tree planting charges, grading fees, hydro and water hook-up charges, development charges etc. etc. and believe me if you do not have your agreement reviewed and these items negotiated and capped it can be very painful (one client, who did not have his agreement reviewed, paid over $20,000 in such fees – and had no legal recourse). It is critically important (as there is no statutory “cool-down” period when buying a new home – unlike a new condo where you have 10 days to change your mind and  say no thanks) to negotiate into the agreement on the day you sign, that you have 10-15 days to have the agreement reviewed by a lawyer. Do not delay in getting it to the lawyer. We can and will save you thousands of dollars.

There are other items in these agreements that may not be negotiable to you, for example most of these contracts contain a “mirror-image” clause which means they can flip the plans you decided on and build to the reverse mirror-image – so if you really do want the door and kitchen on the left you need to amend this clause. They usually also reserve the right to substitute materials and colours for the various finishes – again, if you don’t like this idea you need to build in a clause that requires your approval or that insists on the materials you have chosen (you must, however, be prepared to walk away from the deal if they cannot meet your requirements).

Also, and not many people do this, but you can use a real estate agent to help you negotiate the new home purchase contract – otherwise it is just you and the builder’s representative and you can guess whose interests he/she is representing. At the very least put in a clause for review by a lawyer, it will save you more than the lawyer’s entire fees for the purchase transaction – and that is money well-saved.