Tips for Purchasing a Pre-Construction Condo

Buying a pre-construction condo is a great way to get into the market as the price points are typically lower than a resale unit. The selection of floor plan/layout and finishing's are yours to decide, based on what the builder offers. However, the pre-construction buying process, particularly with condominiums proves to be slightly trickier than that of a re-sale.

Sales Centre Visit

One may find it quite difficult to envision a unit coming to life from analyzing a floor plan. Most condo sales offices are equipped with a ‘Model Unit’ or Suite mock-up where you are able to scale the unit size and view the finishings. Sales representatives are on-site to help you envision the future, educate you on the area, answer your questions and provide pricing and renderings of the building and amenities. A price list and floor plan package should be provided for you to take home and review.

Amenities and Maintenance Fees

A condo building amenity is a common space reserved for unit-owners. These shared spaces become a part of your new condo living experience. When shopping for a condo, it is important to think about what type of amenities best suit your lifestyle. For example, if you are an avid gym-goer, a building with a fitness facility will save an extra monthly membership expense. If you happen to entertain often, perhaps a party room or terrace will better serve you. Or maybe you want it all-whatever the case is, ensure your consideration of maintenance fees. Usually, the more amenities a building has, the higher the monthly maintenance costs. Maintenance fees are calculated by the square footage of your unit and can increase at any time.

Although yet another expense may be difficult to digest, it is not uncommon for building management companies to ask unit owners to contribute to the building’s reserve fund -which is essentially an emergency repair fund. This fund ensures the coverage of any major unforeseen repairs the building may incur. The condo corporation is required to hire an architect or engineer within the first year of registration to conduct a study that will determine how much money is needed for the fund. The Ontario Condo Act states that a reserve fund may only be used for major repairs and not regular wear and tear maintenance which is covered by regular building maintenance fees.

Parking and Lockers

If you are a vehicle owner, it is imperative that you ensure the acquirement of a parking spot. Some builders offer a parking space and locker with the purchase of a unit, however, in some cases, you may have to purchases these separately.

Upgrades and Finishes

When purchasing pre-construction, your unit will likely include standard features and finishes. Leave room in your budget for upgrades. There may come a point where the builder’s finishes aren’t satisfying your design taste.

Deposit Schedules

Pre-construction deposit structures vary. Normally, a deposit is due upon firm sale of your unit, with post-dated cheques for further deposits due in the future. Ensure a copy of your deposit structure is provided to you so that you are able to arrange for funds to be available at the time the builder cashes your post-dated cheques.

Obtaining Interim Occupancy

Condo ownership differs from that of low-rise homes in several ways. One important difference involves occupancy and ownership. With a condominium, it is likely you will take occupancy long before you receive title to your unit. Interim occupancy is the period between the time you physically occupy your unit and the actual closing date. At the time of occupancy, your mortgage does not kick in. Occupied residents are required to pay a monthly fee to the builder, as they do not formally own the unit yet. These monthly fees are referred to as ‘Occupancy Fee’s’ and are not applied to the balance of your mortgage. There is no way to determine how long the occupancy period could drag on, however it is in the developers best interest to register the building as quickly as possible for their own financial success.

Building Registration

At this time, title is transferred to the unit owners. You will now assume your arranged mortgage and condo maintenance fees. Keep in mind, upon successful closing, you are expected to pay your closing costs and land transfer taxes. The property management company also takes over at this time, maintaining the shared spaces and providing the appropriate services.


If you are looking to make a quick move, purchasing a pre-construction condo is not for you. Some condo projects forecast 4-5 year closings. It is important you realize your deposit money will be tied up for the duration of construction. You will have to arrange for living accommodations from your date of purchase until closing, which in most cases could be years.

On the flip side, if you are investing in the future, purchasing a pre-construction condo in the early project stages is ideal as the prices will be at their lowest.


New condos are subject to HST. If you’re an end-user, you may qualify for an HST rebate, make sure to get advice from your lawyer or realtor about whether you qualify for the rebate before you buy.


Closing Costs

There is no standard amount for these expenses. Discuss “capping” your Levies and Development charges with your lawyer to help determine a set amount well in advance of your closing. This will assist with ensuring you set aside your closing costs to avoid unpleasant sur