Involving a real estate lawyer in the construction and purchase of your new home will ensure the purchase agreement works in your favour without issue or delay, and your warranty properly protects your new asset.
The purchase of a newly constructed home has many differences from purchasing a re-sale home (a previously-owned home). These differences are in the purchase agreements, closing dates, deposit protection and new home warranty.
- A new home construction contract is typically lengthier and more complicated than a re-sale Purchase Contract;
- The New Home Construction Contract will deal with additional items, such as delays in construction and possession dates, extra charges, new home warranty, most of which terms are weighted in favour of the builder;
- Due to the complexity, we would strongly advise that you review the contract with your lawyer prior to signing, or if you need to sign prior to reviewing with your lawyer, that you insert a clause indicating that your offer is conditional upon review and approval by your lawyer.
Closing Date Issues
- Most builder contracts allow the builder to extend your closing date due to strikes, shortages of labour or materials or other reasons;
- Normally, a closing date delay would allow cancellation of the contract but with New Home Construction contracts, buyers waive this protection;
- Be prepared for adjustments to your closing date and moving date, by ensuring that you have a residence to live if the possession date is delayed as well as arrangements for the storage of your possessions if you have made commitments to move out of your existing residence.
Deposit Protection and New Home Warranty
- In Alberta, all newly constructed homes and condominiums must be enrolled in a New Home Warranty Program;
- The Warranty Programs protects buyers from defective or incomplete workmanship, loss of deposits and unauthorized substitution of materials.
We recommend seeking the advice of a lawyer prior to the signing of real estate contract for a new home or condominium to discuss these issues.
If you need assistance or more information regarding the purchase or sale of a home, or for the re-financing of your existing home, we welcome you to contact our office at 780-469-0494 or email us directly at email@example.com.