For our final post in our series on closing costs for new build condos, we will take a look at more complex costs that are payable upon closing. In previous weeks, we looked at the down payment and legal fees, as well as applicable taxes. This week we’ll look at Tarion, development charges and utilities.
As listed on the New In Homes website, additional closing costs also include fees for warranties (called a Tarion), development charges and setting up your gas and hydro within the unit. These fees can vary depending on where in Ontario you have purchased your unit, and the exact size and build of the condominium.
- What Is A Tarion? This is a warranty that is applied to new homes in Ontario. It is meant to protect home owners against builders and developers who don’t abide by provincial construction legislation. Its purpose is to cover any fees arising from disputes between builders and homeowners regarding any faulty or defective construction of the condominium.
- What Are Development Charges? When a new condo is being built, there are more people coming and going to the construction site. Because of this, the city applies a fee to the developers for this extra on-site activity. This cost is based on the size and number of units in the new build. A cost per unit is calculated, and is applied to the closing costs of purchasing the unit.
- What Are Connecting Utilities? This is the fee to have your utilities, like heating, set up in your unit. Ownership needs to be registered correctly so that you have power in your unit, and that energy companies know who to invoice.
It’s important to identify what fees and expenses are included in your closing costs when purchasing a new build condo. This will allow you to budget accordingly, flag any discrepancies, and understand what each dollar amount is going towards. Because these costs can be confusing to understand, consult a legal professional for clarity if you have any questions regarding closing the sale on a new condominium unit.