Our clients are the parents of a student who plans to attend the University of Toronto in two years’ time. The parents wish to purchase a new condominium unit in which their daughter and her friend would reside for the duration of their studies. Their daughter’s friend would pay them rent to help offset the cost of the mortgage they planned to obtain. They found a project they liked, signed an Agreement of Purchase and Sale with the developer, and received a Disclosure Statement from the project’s salesperson. Disclosure Statements contain a description of the condominium project’s most important features and copies of the proposed declaration, bylaws and rules, budget, common expense amounts, proportionate shares upon which common expenses are calculated, and condominium plans setting out the units, common elements, exclusive-use common elements, and restricted access areas. The Condominium Act gives a purchaser a 10-day cooling off period to review and be satisfied with the developer’s Disclosure Statement. After that time, the purchaser is bound by the terms of the contract. Our clients asked us to review the condominium documentation and advise them how to proceed.
Our review disclosed several concerns about the proposed project, including the following:
- Although the project’s salesperson assured our clients that the unit would be ready for occupancy in time for their daughter’s anticipated starting date for university, the condominium documents contained the usual significant extension rights for the developer. If these rights were to be exercised, the project would not meet our clients’ deadline.
- Many of the proposed amenities (parking garage, swimming pool, gym, car rental sharing, outdoor barbecue, biking area) that were part of the reason they sought to purchase the unit might not be ready until much later than the four years of their daughter’s studies.
- Our clients deemed the anticipated monthly common expenses in the first year’s budget to be reasonable, but the Disclosure Statement indicated that new costs (mortgage payments for a superintendent’s suite and a guest suite) would come into effect in the second year, meaning that the common expenses might increase beyond their expectations.
- If our clients needed to sell or assign the Agreement of Purchase and Sale before closing due to unforeseen changes in circumstances (e.g. if their daughter decided to attend a different school or no longer had a roommate), there was no right to assign the Agreement of Purchase and Sale.
- There were some restrictions on rental units requiring disclosure and consent by the Condominium Board, which would affect our clients’ ability to lease the unit to their daughter’s friend.
After our comprehensive review of the Condominium’s Disclosure Statement, our clients decided to purchase a unit within a different Condominium project that had already been registered and could provide the certainty they needed for their daughter’s school plans.