LIFE

Tips & Lessons Learned from a First Time Buyer: Pre Construction, Tarion, Toronto Real Estate

Let’s talk about real estate in Toronto and the GTA. My husband and I purchased a pre-construction townhome in Toronto in 2014. We took occupancy in 2017. Last year, we sold it and purchased a new detached house. We were first time buyers and first time sellers. There was much to learn during this whole real estate ordeal and the learning curve was steep! So I wanted to share my experience as a real person, not a realtor or builder trying to sell something or earn commission.

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Buying Pre-Construction from a Builder

We were first time buyers in our mid-20s who were way too naive. We trusted people, believed in the salesperson/builder and what they said and showcased. We didn’t realize they could outright lie when answering questions about the property. There is no recourse because by the time the building is finished, it’s several years down the road and the salesperson who lied to you doesn’t even work there anymore. The only way to protect yourself is to get everything you asked about in writing on the ‘Agreement of Purchase and Sale‘. The salesperson at the presentation centre/sales office will most likely refuse to do so, since they are either not allowed (because whatever they’re “promising” will cost the builder money) or they don’t want to be held responsible. Their only goal is to earn commission in any way possible, even if that means lying to you.

Are floor plans and square footage firm?

As you may know with pre-construction, there is nothing real to look at, only digital renderings of what it “may” look like in the future finished project. The floor plans and listed square footage could all change even after you’ve signed the purchase agreement without notice or compensation. Think you’ve bought a 900 sq ft home? Well, the builder just realized the stairs in their initial floor plans don’t fit, so now you only get 870 sq ft but you’re still paying that same $400,000 price tag. You just lost $13,000. In our case, the second level layout changed completely and we lost a window.

Delayed Occupancy

Delays are so common it’s expected, with 2-3 years being the norm. Ours was delayed 2 years, I will never understand how this can be acceptable. But anyway, take note of your ‘Firm Occupancy Date‘. This is super important because every day of delay past that date, you’re entitled to $150 per day automatically. We received the maximum of $7,500 from our builder. It’s a big chunk of change you don’t want to miss! You have one year after occupancy to file a claim through Tarion.

Report Deficiencies to Tarion

As a homebuyer you are pretty helpless going against a builder trying to get them to fulfill their promises. Tarion is the only thing that can help you hold the builder accountable. They provide new home warranty protection in Ontario. Make sure you enroll and fill out your claims forms.

In our case, after filing out the 30-day form, the builder sent over a handyman and external contractors over a 3-month time span to fix the issues. Almost everything was addressed except our stairs. We upgraded our stairs from carpet to hardwood, but apparently repairs cost too much so the builder didn’t want to hire the stairs company to come back. We had 3 flights of stairs and the problems weren’t small. There were multiple nails sticking out from the wood, some areas were cracked, splintered and broken, there were tons of gaps some even stuffed with different-coloured woodfiller.

The builder refused to correct this, so after the 120-day deadline was up, we scheduled a ‘conciliation inspection‘ with Tarion. You have to pay $282.50 upfront but it’s worth it. This pushes the builder to action because if Tarion sides with you, it will cost the builder $1,000 and it will go on their record which they don’t want. In our case, the builder offered us $5,000 compensation if we cancel the conciliation inspection. The stairs upgrade cost $10,000 and quotes for repairs we’ve gotten back were in the $15,000 range so this wasn’t a satisfactory result but we agreed anyway because we’ve already spent hours arguing with the builder and documenting everything. It was extremely stressful and exhausting.

We didn’t even have the worst of the problems. One homeowner had their furnace explode causing a fire, luckily no one got hurt. Another homeowner’s bathtub pipes weren’t connected properly so it flooded their unit and the unit below. All the floorboards had to be ripped up and redone. Yet another unit’s front door and door frame weren’t aligned properly and over time their entire wall cracked. So many horror stories. This wasn’t a new inexperienced builder either, they’ve had multiple completed projects in Toronto. Even this project had 2 phases with almost 200 units. I should also note the builder only hired 1 handyman for the entire community, so you can imagine how slow repairs went.

Is a townhouse or other types of multi-dwelling unit right for you?

We found out the hard way that living in a stacked townhome was not for us. Imagine this: every single day when you come home from work you can hear your left-side neighbour’s TV music thumping away vibrating your walls. Your right-side neighbour has a baby and it’s crying and screaming. Your downstairs neighbour has their vacuum and laundry on. This was our everyday life, there were never long periods of peace or quiet.

Noise Levels

Before we decided on purchasing a stacked townhome, we did our research on noise levels. We were told that there would be cement walls in between each unit and there were building codes in Ontario that govern how thick the walls have to be to minimize noise. We were reassured by the salesperson that noise would not be an issue here. Well, none of that made any difference. We can hear the neighbours sneeze, we can hear their toilets flush, and we can definitely hear their party going on at 3am.

This living situation was too stressful for us. We hardly wanted to be home anymore. But everyone is different and it depends on your personal preference, others may not be as sensitive to noise as I am. We have friends with freehold townhouses and semi-detached houses and they can also hear their neighbours. This was the deciding factor for us in buying a detached house for our next purchase.

Wow! This post got way longer than expected, I guess I have a lot to say on this subject. You can probably tell I didn’t have the best experience with my builder. There were so many other issues, just thinking about them is getting me worked up. I wish I knew beforehand the dishonest practices and underhand tactics builders use. My eyes have definitely been opened. In my next real estate post I’ll talk about our experience selling and buying in a resale market. That post will be much more fun!

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