A recent caller to my office wanted me to give him a straight answer to his question: “Should I sign the Agreement for Sale?”
John, not his real name, had noticed that:
- The Agreement for Sale he was about to sign had no Volume and Folio number assigned to the house plot he was about to purchase.
- The statement of accounts the developer sent him had an “escalation fee” added to his invoice of 10% of the sales price.
- The lot number of the property he was interested in purchasing, did not appear on the diagram posted on the company’s website.
A Jamaican, who lives in Toronto, Canada, John was poised to purchase one of the units in a new housing development on Jamaica’s North Coast. He phoned me to get a dose of advice and satisfy his cautious instinct.
I could not answer his question regarding whether or not he should sign the Agreement for Sale, but I suggested that he ask the lawyer for the financial institution handling the mortgage, to address his suspicions about the above items. Alternatively, he could hire his own lawyer as a source of advice.
John took the first correct step by checking the details of his documents before he signed the Agreement for Sale or paid any money.
When you are purchasing a unit in a new development, you, too, should carefully check your documents.
In addition to checking the documents, be sure to get background information on the development and the developer by seeking answers to the following questions:
- What other housing developments has the developer completed?
- Is the developer known to deliver what is promised in the sales literature?
- Do his projects regularly experience excessive delays?
- Is the quality of workmanship of a high standard?
- Is the developer registered with the Real Estate Board (REB)?
- Does the REB have a record of complaints against the developer?
What problems, or positive experience, if any, have you had with housing developers? Drop me an email and share your story.
- What you Need to Know Before you Buy a Strata Unit
- Three Ways to Prevent the Deal From Going Sour
- Read Carefully Before Signing that Agreement for Sale