Condo Shopping

[Keebler Elf]

Let's say a new building is sold out and people are beginning to move in. From what I understand the condo has to register (?) and until it does people are just renting and don't actually own their units (or something to that effect).

Is it also correct that people can't sell their units until the building is registered?

The reason I ask is because I'm wondering if units will become available for resale once the building is registered.

p.s., I went looking for the recent thread I started on condo/real estate buying tips but it seems to have disappeared...

 

[Gentle Ben]

p.s., I went looking for the recent thread I started on condo/real estate buying tips but it seems to have disappeared...

This one? https://terb.cc/vbulletin/showthread.php?t=119045

 

[Keebler Elf]

How the eff did you do that??? I searched for threads under my handle with the search term "condo" and all I got was stuff from years ago...

But thanks!

 

[Tangwhich]

Is it also correct that people can't sell their units until the building is registered?

It's my understanding that before the first closing date (interim occupancy) you can sell your contract, if the contract allows for it. If it does allow it, it will likely have a clause saying you must pay a fee to do it.. likely something like $5000.

As far as I know, once you've passed the first closing date, you cannot sell it until it's registered and you've become the actual owner of the unit.

I am not an expert though. I would recommend you consult a real estate lawyer.

 

[Mia.Colpa]

It's my understanding that before the first closing date (interim occupancy) you can sell your contract, if the contract allows for it. If it does allow it, it will likely have a clause saying you must pay a fee to do it.. likely something like $5000.

As far as I know, once you've passed the first closing date, you cannot sell it until it's registered and you've become the actual owner of the unit.

I am not an expert though. I would recommend you consult a real estate lawyer.

Some errors in your terminology and post. The terminology "closing date" is misused, and it is the date after the building is registration and the date that the developer picks for you to pay up whatever is left so you can now have your name on title and own the unit, that's the closing date. Occupancy date is the date the developer assigns to your unit and which is considered sufficient enough to be inhabited according to city bylaws and which allows the owner to take possession of the unit prior to registration. You can either move in or rent it out, but the owner still does not have his/her name on title yet. So, you can't sell something you don't own yet prior to registration as your name is not on title.

You can not "sell" your unit prior to registration, however you can do an assignment prior registration date. Prior to the registration date you can "assign" your rights to ownership by completing an assignment agreement. However, developers are getting smarter or more greedy, you take your pick, and some condo docs now do not allow assignments, so please read your docs or have your lawyer read them. If an assignment is allowed, the developer now typically wants a hefty fee, ie $10,000 and more, so they can make money on you again, bastards, they sure are greedy.

However, there is still a way to get around docs that do not allow assignments, but too complicated to explain on this board. I've found a loop hole and it works.

 

[thompo69]

Some errors in your terminology and post. The terminology "closing date" is misused, and it is the date after the building is registration and the date that the developer picks for you to pay up whatever is left so you can now have your name on title and own the unit, that's the closing date. Occupancy date is the date the developer assigns to your unit and which is considered sufficient enough to be inhabited according to city bylaws and which allows the owner to take possession of the unit prior to registration. You can either move in or rent it out, but the owner still does not have his/her name on title yet. So, you can't sell something you don't own yet prior to registration as your name is not on title.

You can not "sell" your unit prior to registration, however you can do an assignment prior registration date. Prior to the registration date you can "assign" your rights to ownership by completing an assignment agreement. However, developers are getting smarter or more greedy, you take your pick, and some condo docs now do not allow assignments, so please read your docs or have your lawyer read them. If an assignment is allowed, the developer now typically wants a hefty fee, ie $10,000 and more, so they can make money on you again, bastards, they sure are greedy.

However, there is still a way to get around docs that do not allow assignments, but too complicated to explain on this board. I've found a loop hole and it works.

There's some good stuff here, but read over your purchase agreement carefully as it will outline any conditions. With a new building, if the builder hasn't sold all of the units, they may include a clause prohibiting you from selling until they've sold the last of the units so that they don't have to compete with resale in the same building.

 

[Keebler Elf]

So once registration occurs, do new condos typically have units come up for resale?

 

[Mia.Colpa]

So once registration occurs, do new condos typically have units come up for resale?

Absolutely, especially from investors who feel they have made enough money since they put money down before the shovel hit the ground and it's a couple or three years after purchase. But, it still depends on the market, I've held on longer even after registration in certain locations as I feel there is still room for growth. You really have to know what you're doing, do your research, again, and again, and again. Downtown Toronto is still a good investment as long as you know what you're doing, this is not for novices.

 

[Mia.Colpa]

With a new building, if the builder hasn't sold all of the units, they may include a clause prohibiting you from selling until they've sold the last of the units so that they don't have to compete with resale in the same building.

Are you sayin that some developers include a clause to prevent you from selling your unit after registratin until the developer sells all of his??? I don't think that is legal, if I own my unit, I can sell it whenever I want and this will over ride any clause a developer includes in the purchase agreement. I've never heard of a developer doing this and I've been buying for many years.

If you are saying the developer prevents you from selling prior to registration, I can believe that, but then again, you don't really own it yet as it's not registered, so it would not be binding in that situation.

 

[Hangman]

So once registration occurs, do new condos typically have units come up for resale?

Absolutely. I'm in interim occupancy now, but I know that several units were purchased by speculators. When I was in the purchasing centre, there was one guy buying four at once. The ones with enough money for the down payments take advantage of the pre-construction pricing, but their risk is that the building will take too long to complete and register.

Now, a building that was selling at $315 per square foot is over $475 per square foot, but it's been 4 years. Trust me, those units will be on the market, and priced to sell...

 

[Keebler Elf]

So if the builder still has a couple units left to buy, is it better to wait for the resale units to come on the market once the registration is complete?

 

[Hangman]

I'm no real estate expert, but the more units available on the market (after registration) it would seem that there'd be more price competition... Unless it's some awesome must-have buildng with insane demand.

 

[thompo69]

Are you sayin that some developers include a clause to prevent you from selling your unit after registratin until the developer sells all of his??? I don't think that is legal, if I own my unit, I can sell it whenever I want and this will over ride any clause a developer includes in the purchase agreement. I've never heard of a developer doing this and I've been buying for many years.

If you are saying the developer prevents you from selling prior to registration, I can believe that, but then again, you don't really own it yet as it's not registered, so it would not be binding in that situation.

When I bought my condo, the Agreement of Purchase and Sale included a clause that for a period of one year after the closing date, or until the Vendor has sold all of the units in the condominium, whichever is earlier, I would not sell my unit without the prior written consent of the Builder, which consent may be withheld for any reason whatsoever.

I am no expert in contract law, but I see nothing illegal about it. My lawyer certainly didn't raise any red flags when he reviewed the Agreement.

 

[Keebler Elf]

I know a couple people who had condo contracts that said if they sold before a certain time period, 50% of the profits went to the condo company. Apparently you can try to negotiate out of that, but that's what was in the agreement.