Deal with adjustments early or pay for it later
With a pre-build contract, get the adjustments ‘capped.’
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Q: I am about to close on a condo that I purchased a number of years ago as a pre-build and it is now complete and ready for final closing where I take ownership of the unit and move into my new home. However, I have just had a huge shock when my lawyer provided the Statement of Adjustments and there are close to $20,000 in additional costs. These fees are for things like meter hookups, park levies and development charges. I want my lawyer to go back to the builder and their lawyer and see if he can negotiate a reduction in these costs. I am a first-time homebuyer and I don’t have the money to pay these additional costs. What can I do?
A: When you signed your agreement of purchase and sale many months, if not years ago, there was a section in the contract that outlined “adjustments.” These set out in general terms the additional costs that the builder assumes on your behalf and on final closing, they transfer to you for payment. At the time of signing the contract, you were provided with a 10-day rescission period when you can have the contract reviewed and go back to the builder with any changes. When I am retained to review a pre-build contract, I always advise clients to go back to the builder and get the adjustments ‘capped.’ Typically the builder won’t cancel these charges but they will often put an upper limit on these fees, thereby providing you with manageable, budgeted costs.
At this late date, unfortunately, you have no recourse with the builder. The time to deal with these costs has long since passed. You had best start searching for extra funds to assist you with your closing.