Purchasing property is no small decision.
Every prospective homebuyer has a lot to think about, including mortgage repayment, how much money they need to put down, closing costs and a host of legal agreements.
Having second thoughts is part of being a human, especially if you’re clouded by a quick opportunity to purchase a pre-construction condo.
Any pre-construction condo buyer is legally allotted 10 days to “cool off” once they sign the Agreement of Purchase and Sale. This gives them some serious time to contemplate their purchase without facing financial or legal penalty if they decide to walk away from the seller.
Who can you use the cooling period?
It’s important to note that this 10-day cooling period does not extend to resale condos or detached home purchases. The mandatory cooling period is strictly accessible to those who sign on to a pre-construction unit directly from the builder. If you are buying an assignment, this 10-day cooling period has likely already passed.
When does the cooling period apply?
Buyers of pre-construction condos can cancel the Agreement for any reason. The window of time allows buyers to research the developer, get mortgage pre-approval and check out the neighbourhood. If anything makes them change their mind, they can walk away without giving an explanation.
How to walk away from an Agreement?
If within those 10 days you decide to go in another direction and effectively walk away from the pre-construction sale, the buyer needs to provide written notice that they intend to walk.
The builder or its attorney must get this written notice within 10 days of the date you signed the Agreement. If you received the disclosure statement first, it will be 10 days after that.
The easiest way to make sure you follow all purchasing, contract and cooling period steps properly is to hire a real estate attorney, one that knows their way around the pre-construction process.