In Ontario, buyers of new pre-construction condos have a mandatory 10-day cooling-off period. You must use this time to have a local Markham real estate lawyer review the Agreement of Purchase and Sale to cap hidden builder fees (like development charges) and explain your Tarion warranty rights.
Buying a pre-construction condo in Markham is an exciting milestone. With major new developments rising along Enterprise Boulevard and Highway 7, many buyers are drawn to the idea of owning a brand-new, modern unit. However, unlike buying a resale home, purchasing pre-construction involves signing a massive, complex contract written entirely in the builder’s favour.
When you sign an Agreement of Purchase and Sale (APS) at a builder’s sales centre, you are agreeing to rules about construction delays, extra closing costs, and occupancy fees. 🔍 Thankfully, Ontario law provides a safety net. This guide will walk you through the essential steps of reviewing your contract so you do not face a sudden financial shock when your building finally opens years down the road.
Step-by-Step Process in Markham (Ontario)
Whether your new condo is being built in the heart of Markham Centre or near the Mount Joy GO Station, the rules set by the Ontario Condominium Act and Tarion apply to every new development. Here is the step-by-step process every buyer should follow immediately after signing.
Step 1: The 10-Day Cooling-Off Period
The moment you receive a signed copy of the APS and the builder’s Disclosure Statement, the clock starts ticking. ⏳ By law in Ontario, you have 10 calendar days (not business days) to cancel the contract for any reason, with no penalty, and get your full deposit back. You must immediately send the contract to a real estate law firm. If you wait until day 9, lawyers may not have enough time to review the 100+ page document.
Step 2: Negotiating Capped Development Levies
Municipalities like the City of Markham charge builders “development levies” to pay for new infrastructure like parks and sewers. Builders love to pass these costs onto buyers. If your contract does not have a “cap” (a maximum limit) on these levies, you could be hit with a $10,000 to $20,000 unexpected bill on closing day. Your lawyer will write to the builder’s lawyer requesting a strict cap (e.g., max $5,000 for a 1-bedroom unit).
Step 3: Understanding Interim Occupancy
In Ontario, a pre-construction condo has two closing dates. The first is Interim Occupancy, when the unit is livable and you get the keys, but the building is not yet officially registered. 🔑 During this time, you must pay the builder a monthly “phantom rent” (occupancy fee) that does not go toward your mortgage. Your lawyer will explain this process so you can budget for what could be 3 to 8 months of extra payments before the final closing.
How Much Does it Cost in Markham?
Hiring a real estate lawyer is a small investment compared to the thousands of dollars they can save you by capping hidden fees. Below is a general breakdown of what to expect when paying for pre-construction legal services (in CAD):
| Service | Estimated Cost (CAD) | Description |
|---|---|---|
| APS Review (Within 10 Days) | $300 – $600 | Lawyer reviews the contract, highlights risks, and sends a request for amendments to the builder. |
| Interim Occupancy Closing | $400 – $800 | Processing the paperwork and post-dated cheques to get your keys during the occupancy phase. |
| Final Closing & Title Transfer | $1,200 – $2,000+ | Registering the title, paying land transfer tax, and finalizing the mortgage. (May include the initial review fee). |
How Long Does the Process Take?
The legal review itself is incredibly fast, strictly confined to the 10-day cooling-off period. 📅 However, the actual process of buying a pre-construction condo requires extreme patience. It is completely normal for a condo in Markham to take 3 to 5 years to build from the time you sign the contract, and builders have legal rights under Tarion to delay the closing date multiple times.
Frequently Asked Questions (FAQ)
What happens if the builder cancels the project?
If a project is cancelled, your deposit is protected by Tarion (up to certain limits) and will be returned to you. However, you do not get compensated for the lost time or the market appreciation you missed out on.
Can I sell (assign) my condo before it closes?
This is called an Assignment Sale. You can only do this if your APS explicitly allows it. Builders usually charge an assignment fee (often $3,000 to $5,000) and require you to get their written permission first.
Do I need a mortgage pre-approval right away?
Yes, most builders in Markham require a firm mortgage pre-approval letter from a Canadian bank within 30 to 60 days of signing the contract, just to prove you will eventually be able to afford the unit.
Are Tarion enrollment fees extra?
Yes. The Tarion warranty protects your new home against structural defects, but the enrollment fee is usually added to your statement of adjustments on closing day as an extra cost for the buyer.
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