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The Disclosure Statement
Upon signing a new construction condominium agreement of purchase and sale, the Builder will provide a purchaser with a disclosure statement. The disclosure statement, also known as the disclosure document, will eventually form part of the condominium declaration. The statement deals with some of the following matters:
1) Whether the condominium is a freehold that is a standard condominium corporation;
2) Whether the property or part of it is subject to the Ontario New Home Warranty Plan Act (“ONHWP”);
3) Whether the common elements are also protected under ONWHP;
4) Whether the property is a conversion from a previous use (i.e. a retro-fit);
5) Whether some of the units in the condominium will be used for commercial purposes;
6) Whether there are pet provisions on the property;
7) Whether there are restrictions and or standards with respect to the use and occupancy of the units;
8) Whether the Declarant (Builder) intends to own and lease a portion of the condominium units;
9) Whether parking is available and is owned or used as exclusive use and whether there is parking for visitors either free of paid;
10) Whether the corporation is required to purchase units such as a superintend suite or guest suite;
11) How many dwelling, parking and locker units the project will contain;
12) Copies of property management agreements;
13) Proposed budget of the Condominium Corporation;
14) Disclosure of utility agreements with service providers; and
15) Whether the Declarant intends to institute a car share program in the project.
The disclosure statements will also contain a draft copy of the Condominium Corporations by-laws, contain rules with respect to the use and occupation of units and state what utilities are included in the common expenses. The disclosure document is very thorough and contains a lot of important information that a potential purchaser should know about the condominium project they are buying into. This document stems from consumer protection laws and is so important that if a Builder does not provide it to the purchaser, the purchaser is not bound by the agreement of purchase and sale. Further, if the Builder decides to make a material change, they must provide notice to the purchasers and if the change is so material that a purchaser would have not otherwise purchased the unit, the purchaser has rescission rights (subject to any qualifications in the agreement of purchase and sale).
During the 10 day cooling off period, a prudent purchaser should always have their lawyer review the disclosure documents as well as their agreements of purchase and sale before the agreement becomes binding.
