Amendment to Tarion Addendum: More Disclosure for Condo Purchasers
The Ontario government just enacted amendments to the regulations to the Ontario New Home Warranties Plan Act. Included in the amendments are new Tarion Addendum forms which are available for use effective July 1, 2012 and which are mandatory for any new condominium project where the first sale to an arm’s length purchaser is signed on or after October 1, 2012. These changes will not affect the many condominium projects that are currently being marketed.
The major change in the Tarion Addendum is a new Schedule “B”. Part I of Schedule “B” requires a list of all the purchase price adjustments where there is a specific dollar amount set out in the agreement of purchase and sale, such as, for example, the $100 charge for the status certificate, fee for partial discharges of mortgage, per cheque administration fee for each cheque deposited, etc.
Part II of Schedule “B” requires a list of all other adjustments to the purchase price where the actual amount of the adjustment is not specified in the agreement of purchase and sale, such as, for example, adjustments for new taxes and development charges and increases in taxes and development charges, levies for public art, cost of installation of utility meters, utility deposits etc.
The lists in Schedule “B” must contain a cross-reference to the sections in the agreement where the charge is specified. Any additional charges or adjustments not listed in Schedule “B” cannot be charged to the purchaser on closing. In the past many purchasers, particularly first-time home buyers, were caught off guard at closing as they were not aware of these additional charges and had not budgeted for them. With the inclusion of Schedule “B” purchasers should be alerted to the fact that there will be additional charges and we expect that more purchasers will try to negotiate either the removal or capping of some of the charges.