You have seen the signs – you are driving past a vacant lot or empty field in the country and a bright, shiny sign exclaims to you “Condominium Coming Soon – Units Starting from $500,000!”

What that sign does not tell you is all of the “hidden” fees you will pay on final closing, sometimes years after signing your Agreement of Purchase and Sale.  It is important that you understand where to find a list of these fees, what they are, and what they can cost you on final closing. But even more important, is knowing what you can do to be prepared.

Where can I find these fees?

In your Agreement of Purchase and Sale (“Agreement”), you will find closing fees in two places: within the body of the Agreement of Purchase and Sale, and then summarized in a Tarion Schedule to the Agreement.

In the body of your Agreement, builders are required to include a list of the fees and a description of them. The descriptions are sometimes included under a heading that may say “Adjustments”, “Reimbursements”, or “Other Fees”.

Then, in the Tarion Schedule to your Agreement, they will be listed (sometimes), more concisely, without a full explanation of each fee.

What are these fees?

In short, the fees can be almost anything, if the Purchaser agrees to it. It would be impossible to list all of the potential fees in this blog. However, some common fees include:

• Meter Installation/Connection Fees for the building.
• Wire Transfer Fees for every deposit you make, or payment you send to the builder.
• Default Letter fee, for letters issued to you if you have missed a payment, or are otherwise in breach of the Agreement.
• Assignment Fee for the administrative work involved if you wish to sell your rights under the Agreement to a third party (or even sometimes to someone else in your family).
• Failure to Inform Vendor About Change of Contact or Lawyer Information if you do not advise them of the change, requiring them to seek that information on their own.
• Increase in Development Charges and Education Development Charges for reimbursing the municipality for all of the extra infrastructure required to support the development (think: electricity, roads, schools, parks, etc.).
• Payment of HST Rebate if you do not qualify for the new build HST rebate, in many cases you will be required to pay the builder the amount that you would otherwise qualify for.
• Vendor’s Legal Fees for reimbursement of the legal fees the builder incurs in order to complete your transaction. The more work involved due to any special requests you make, the more you will pay in legal fees.

Be sure to check out Part 2 of this blog, which will get down to brass tacks: how much these fees are going to cost you and what you can do about it!

If you have any legal questions regarding the purchase and/or sale of your property, please do not hesitate to contact us to speak with one of our lawyers at (905) 270-6660 or e-mail us at:  Info@kormans.ca