House Plans

The first thing you need to is have a detailed set of plans attached to the Purchase and Sale Agreement or the Building Agreement. Make sure you fully understand the plans and are sure that the plans properly describe the house you are preparing to purchase. The plans should include a detailed set of drawings for each floor as well as detailed drawings of each exterior side. Any changes to these plans should be initialed by all parties to the agreement.

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Home Specifications

The next step is to have a detailed set of specifications attached to the Purchase and Sale Agreement. It is important to make sure you understand the specifications and are sure that the specifications properly describe all the details of the house you are expecting to purchase. Flooring, cabinets, fixtures, finish work, painting, electric work, cable outlets, central vac, construction details, plumbing, windows, doors, landscaping, driveways, paving, concrete walkways, etc. should all be detailed in these specifications.

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Building Restrictions

You should get a copy of the building restrictions and restrictive covenants, if any, and read them before you sign the agreement to make sure they are to your satisfaction

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Land Survey

When you are buying a newly built home pursuant to a Purchase and Sale Agreement, your Building Agreement should state that the survey work is to be certified in your name. The agreement should stipulate that the survey stakes are to be in the ground and visible upon closing, as the stakes are often knocked out of the ground or buried during construction.

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Building Codes, By Laws, and Regulations

You need to specify in your Purchase and Sale Agreement that the builder is to construct your home in accordance with all applicable building codes, subdivision requirements, restrictive covenants, and all applicable Federal, Provincial and Municipal by-laws and regulations. 

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Your Closing Date

If your closing date is important to you, specify in the Purchase and Sale Agreement what is to happen if the house is not ready for you to move in on the closing date.

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HST - Harmonized Sales Tax

The Purchase and Sale Agreement must specify the details of the HST and the HST rebate. Further, the Purchase and Sale Agreement must state that the appropriate HST forms and HST assignment forms, if applicable, are to be signed and delivered prior to closing.

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Mechanic's Liens

The Purchase and Sale Agreement must also specify the details of the 10% Mechanics Lien holdback and confirm who is to hold the funds, under what conditions they are to be released and who is to collect the interest on the holdback.

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Extras and/or Changes

If the work is not detailed in your Purchase and Sale Agreement expect to pay extra for it. The builder will be charging you upon closing for all extra work you have added, in addition to your contracted price.

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Allowances

If you are making your own arrangements pursuant to your Purchase and Sale Agreement for the installation of flooring, cabinets, fixtures etc., your Agreement must specify how these items are to be paid for and how the payment is to be adjusted upon closing if at all. If the GST is being assigned to the builder, it may be easier for the builder to make all the payments and for any required adjustments to be done upon closing.

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Credits

A credit against the purchase price for work not completed by your builder, that is in your agreement, may be given only with your consent for the cost of this work.

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Deficiencies

The Purchase and Sale Agreement should stipulate that any work required in your Agreement to be completed upon closing that is not completed, shall result in a holdback of funds pending the completion of the work to your satisfaction. An amount sufficient to cover the cost of having the work completed should be held back. A specific dollar amount should be designated for each item to be completed and a date that the funds held back are to be released to you so that the completion of the work can be done by another contractor.

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New Home Warranty

Your Agreement should stipulate that all new home warranty forms are to be signed and delivered prior to or on the closing date.

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Occupancy Permit

Your Purchase and Sale Agreement should stipulate that you are to be in possession of an unconditional occupancy permit prior to your closing date. If the actual permit is not available then you should at least confirm with the municipality that the required inspections have been completed to the satisfaction of the municipal inspector. You may want to hold back funds until the actual permit is delivered to you. 

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Well and Septic Certificates, Water Tests

In the event that your home does not have municipal services your Purchase and Sale Agreement should specify that satisfactory Well and Septic Certificates and Water Tests are to be given to you as soon as they are available or prior to your closing date.

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Insurance

If the home you are having built is on a lot you have already purchased, your Purchase and Sale Agreement should have attached to it your insurance policy and the builders insurance policy.

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Damage and Cleanup

Your Purchase and Sale Agreement should say that the builder is responsible for repairing any damage to roadways, curbs, and adjacent lands. Your Purchase and Sale Agreement should also say that the builder is responsible to remove all garbage, debris, rubbish, rocks and excess fill from your property as well as removing all tools, scaffolding, and any surplus materials from your property prior to your closing date. 

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Permits, Licenses, Inspections

Your Purchase and Sale Agreement should say that the builder is responsible to obtain and pay for all the necessary permits, licenses, and inspections required to complete the agreement.

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Pre-Closing Inspection

Just before your closing date, you should do a final inspection of the property, and make a list of anything that is not complete or done to your expectations that you were expecting to be done as per your Agreement. 

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