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How to Protect Yourself When Buying New Construction

Following up with the article: New Condo Building Collapsing. Another great article by William Marsden from the Gazette, on how to protect yourself when buying new construction. The tips are quite interesting, I will add my own comments between the square brackets [ ]

The New Home Guarantee covers new condos that are part of small, one-to-fourstorey condo buildings. Highrise condo buildings are covered by private insurance plans.

Like all insurance policies, it’s important to understand fully the conditions of the Quebec government’s plan so you can protect yourself at every step during and after the construction process.

HERE ARE SOME TIPS:

1. Check with the Régie du bâtiment that the contractor is properly licensed and check his experience. Just because he holds a licence to install a foundation doesn’t necessarily mean he knows what he’s doing. [ Very Important!! - also check for any awards won by them, written articles and reviews about their company etc]

2. Make sure you read the entire condo purchase agreement so that you know exactly what you are buying and so that you understand your rights and liabilities relating to your condo and your building’s common spaces. This will help you make sure that at the end of construction, you get exactly what you were promised and that you are not liable for unforeseen payments to, for example, unpaid subcontractors.

3. The warranty covers up to $39,000 as a down payment. So don’t pay more than that. If the contractor goes bankrupt, you will probably lose anything above that amount. [ Again, do your homework about the previous work from the company to establish their credibility, financial strength, etc. Some units, depending their price, will require more than 39K as a downpayment ]

4. Get to know your fellow condo owners as soon as possible. Don’t wait until after construction is finished to form a condo association. Hire your own inspector to assure the work is done properly while the building is still under construction. Get the inspectors to supply written reports on the progress. If you can’t afford an inspector, call the city and get them to inspect the construction progress.

5. At the end of construction, your association must hire an inspector to inspect the entire building. Make sure that you get everything you paid for and that the work conforms with the building code. If the inspector finds any problems, make sure they are repaired before the condo association accepts ownership. DON’T make your final payment until all the work is completed to your satisfaction. Contractors might make empty promises and harass you for the money. If you give in, you’ll might never see them again.

6. Make sure that any communication with the contractor is done by registered mail so that you have an official record. You must make any claims on the warranty within six months of finding the problem, so you have to have a record of all communications. And make sure you send notification of faults immediately after they are discovered by registered mail to the administrators of the New Home Guarantee program. According to the Régie, many owners find they are not covered because they allowed a contractor to delay the work past the six-month period and then had no record of communications to prove their claim. [ Email will also work. Keep records of all of the messages sent and received ]

7. The guarantee lasts only five years.

8. Remember, in the end, only you can look after your interests. [ I could not agree more.]

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in condos and revenue property in the metropolitan area of Montreal. For buying or selling contact Deya at: 514.917.7889

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