Infill Housing is defined as housing that is built on vacant lots in built-up areas of a city. When a Buyer is considering this type of ‘New Home’ purchase from a Builder they will need to consider a number of issues to protect their purchase.
Buyers will need to determine if the project is completely new construction or only partially new. A newly built home is considered partially new if any part of the original foundation, walls etc. of the original structure is used in the rebuild. The benefit to the Builder in using any of the previous structure is that original setbacks apply meaning they do not have to comply with any new setback standards.
Buyers should be aware that any use of the previous structure in the ‘new home’ invalidates the New Home Warranty Plan and therefore the only warranty potentially available is from the Builder. Typically Builders may provide a one year warranty on the ‘New Home’, but a Buyer can ask for a longer period and ensure the warranty provides similar protection as the Tarion New Home Warranty Plan.
Buyers should also include a clause that the Builder/Seller warrants that all necessary permits have been obtained from the city for demolition, construction, plumbing, heating, electrical, mechanical etc, and that all permits have been complied with and will be cleared or satisfied on or before closing. Failure to obtain this warranty will put the Buyer in the position of being responsible for any building code issues in the event that a building inspection is performed at a later date.
Buyers should also request and ensure that a Deficiency list will be developed within ‘x’ number of days of acceptance and establish the timing for the correction or completion of the deficiencies at the Sellers expense.
Buyers should also request that Seller provide the Buyer on or before the closing date, a Statement of Declaration and/or Schedules confirming the following:
- All Subcontractors have been paid in full
- An Indemnity and Release re: Construction Lien Act
- Building code compliance for construction and home systems installed
- Building and structures are within the lot lines and setback requirements
- Home systems and chattels are in good working order
- Grading requirements and schedule
- New Property Survey and accurate drawings of the dwelling incorporating all changes
- Detailed Schedule of Finishes
Although you may think you are avoiding buying other people’s problems when you are buying that ‘New Home’ there are plenty of potential problems with Builders. What are their workmanship and business practices like? Will they still be in business? Although there are no guarantees your ‘New Home’ will be perfect, you can do some preliminary homework to minimize your exposure.
Vince Mandarano is a Sales Representative with Royal LePage R.E.S. Ltd./Johnston & Daniel Division. Vince is a regular contributor to the Muddy York Blog. Vince’s website is located at www.HeartofTorontoHomes.com
