Toronto’s condominium market is soaring as Canada’s largest city continues to attract more people for work and play. Currently, there are more than 100,000 units under construction, 123 high rise projects underway and 160 planned to start soon. That’s more than any other city in North America. Prices have soared too, up almost 26% in the last five years.
While this demand is encouraging more investment in pre-construction condos, with it comes concern that such speedy projects are compromising on workmanship and quality and that some condos will be in need of major repair when their Tarion new home warranties run out after seven years. Critics suggest developers are more concerned with pleasing the appetite of investors than building high quality, long-lasting structures. If you’re an investor or buying for yourself here’s what you need to know about buying into Toronto's condo boom.
What's in a Warranty?
In Ontario, newly constructed dwellings are covered under the Tarion Warranty, which protects homeowners from major structural defects (MSD) for seven years. This includes, as described by the Ontario new Home Warranties Plan, any defect in work or materials in respect to a building, including a crack, distortion or displacement of a structural load-bearing element. The seven-year MSD warranty includes significant damage due to soil movement, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials. For most condominium projects, warranty coverage also includes the shared areas of the building, referred to as common elements. However, many are worried that Toronto's condos will continue to have issues after this warranty expires - with homeowners on the hook for the cost.
Look Into Developer History
News of glass falling from some of Toronto's high rise projects has called current building standards into question - will today's buildings last 50 years? Tarion recommends buyers should look beyond the marketing materials and research their builders. The Ontario Builder Directory at Tarion.com shows a listing of every registered builder in Ontario and includes a 10-year history of any chargeable conciliations and the number and amounts of certain claims.
Don't Settle on Standards
If you’re concerned about the quality of construction of a condo building, then it would be wise to look at another project. With so many units available there is a no reason new condo buyer should settle on a building that they are not 100% satisfied with. We all know that not everything goes to plan, especially when it comes to a new development. So many factors, like weather, shipment of materials and availability of workers, can all delay a project. Builders are entitled to extend the occupancy date specified in a purchase agreement as long as they provide proper notice. Owners are entitled to compensation if proper notice is not given.