It is always exciting to buy a brand new home. New builds are often customized to you in ways that buying a home that is already built would require extensive renovations to achieve. This advantage comes with it own set of potential issues. One of the big common ones is "deficiencies". These are the things that are not completed by the builder as of the closing date. Best case scenario there are none, or they are minor things that needing to be finished.
There are a few things that you should do in order to make dealing with deficiencies in your new build a lot less stressful.
· Make a list of the deficiencies with your builder - in writing. It is hard to be on the same page if you and your builder have not agreed on what still needs to be done. Do this on or just before closing day, and create a detailed list of what still needs to be done.
· Set deadlines. In addition to simply identifying what the deficiencies are, you should also figure out how long your builder expects to take to complete them. Having timelines makes the process clearer, and no one is simply waiting around in limbo waiting for repairs indefinitely. These deadlines should be incorporated into the list of deficiencies. If after the deadline has expired and the repairs have not been done, you can see to it that they are taken care of with the holdback money.
· Holdback $$ - If you end up with a list of deficiencies, an approximate cost to complete it should be assigned to each item on the list. On closing day, your lawyer should holdback the amount that would be required to complete these deficiencies from the purchase price. This money is held in trust and is either released to the builder once they have completed the deficiencies within the agreed deadlines, or it is released back to you so you can pay to have the issue resolved.
· You should also have your lawyer review the new home contract you have with the builder to determine whether this is an option, and help you understand what is actually included in the purchase price (e.g. landscaping often isn’t).
· Taking these steps can help you avoid a nightmare situation when you move into your home.: http://www.cbc.ca/news/canada/newfoundland-labrador/costello-dream-home-skymark-unfinished-1.4065397
There are a lot of things to consider when you decide to buy a home, sometimes it can be overwhelming. If you have any questions about making this decision we offer a flat fee consultation service. You can come to chat and ask questions. We'll give you some advice about your options and what your next steps might be. There is no commitment after the consult. If you have decided to go ahead with a purchase, and wish to retain us we would love to work with you. You can find our information at : www.highlanderlaw.ca.
By: Briana C. O'Grady, J.D.
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