A new condominium that is bought directly from a builder does not have a standard agreement of purchase and sale. As most builders have their own terms in the agreement of sale, it is quite possible that 100 different builders selling condominiums would have different agreements and clauses.There is no set standard.

1. Helpful Tips to Sell
Your New Condo
Before Registration?

2. A new condominium that is bought
directly from a builder does not have a
standard agreement of purchase and
sale.
As most builders have their own terms in
the agreement of sale, it is quite
possible that 100 different builders
selling condominiums would have
different agreements and clauses. There
is no set standard.

3. To make things even more complex, in
Ontario, there is no set guidelines by the
province or by RECO, that a builder must
follow except for the New Home
Warranty.
So till a condominium is registered and
closed (that is the day the title is
transferred to the buyer), the buyer is
restricted by the original agreement with
the builder as to what he can do and
what he cannot do, before closing the
sale.

4. Selling of a condominium unit before the
registration is commonly known as
flipping. Flipping is more complex than
simply selling a condo after registration.
Any condo buyer or investor
contemplating selling before the
registration of the condominium would
be well advised to make himself familiar
with the process, issues relating to new
home warranty and the income tax
consequences.

5. Flipping During Construction and
Before Occupancy:
You must have consent from the builder
to assign the agreement, don’t think it is
automatic. Some builders simply refuse
to give consent, especially when they
have unsold units; they do not want
competition from their buyers.

6.  Others may ask for fees for giving
consent.
The fees vary from project to project and
builder to builder and these could be
from a few thousands to tens of
thousands of dollars.

7. Flipping After Occupancy But Before
Registration:
You must familiarize yourself with the
reselling process and clarify the following
important and significant financial issues
in the agreement with your buyer:

8. Who will pay the flipping fees, if the
builder decides that he needs some
money for giving his consent.
Will you get your profit right away or will
you have to wait till your buyer closes
the sale with the builder.

9. You as the reseller, must re-register the
condominium with Tarion Warranty
Corporation make a disclosure that you
are a reseller by completing a reseller
form and pay a fee of $350.
Penalty for not complying with this, is a
fine of up to $25,0000 or a jail term of
up to One year or both.

10. To avoid any issues later, clarify that the
new buyer may forfeit the HST rebate, if
the buyer is an investor or a someone
who is going to rent out the
condominium
There may be some rebate coming to the
original buyer , if the unit was originally
bought under old GST of 6 or 7%.
Clarify as to who will be entitled to this
transitional rebate.

11. Clarify the mechanism for property tax
adjustments for any retroactive tax
assessments imposed by the city.
It is quite common for the city to issue a
supplementary / retroactive tax bill for
new condominiums and it must be
clarified as to what obligation you as a
seller will have after the sale.

12. The agreement must specify as to who
will be responsible for any development
charges, utility connection charges and
any other fees imposed by the builder as
per the original agreement of purchase
and sale with the builder.
There should be a provision in the
agreement as to how any
changes/amendments, before closing
imposed by the builder, will be dealt with
if the builder’s terms conflict with the
new agreement of purchase and sale.

13. If the condominium unit is flipped before
registration or even soon after the
registration, and it is proven that you
had no intentions of moving in, you will
have to pay tax on the total profit as a
regular income and not as a capital gain.

14. A novice buyer is not likely to be familiar
with all the complexities of flipping a
condominium. If in doubt, retain an
experienced Condominium Real Estate
Broker and consult a lawyer well before
signing the sale.

15. About Nawel K Seth & Trail Blazers
Realty
Nawel K Seth is the broker of Record of
Trail Blazers Realty. He has been in the
Real Estate Brokerage industry for
almost 40 years. He holds multiple Post
graduate degrees from reputable
University of Toronto and can be reached
through any of his websites.

16. Trail Blazers Realty, the developer of the
website www.FlipCondos.ca and
www.TheRentals.ca , has its offices in
Markham, GTA Toronto, Ontario, Canada.
Contact information for Nawel K Seth,
M.A.Sc; MBA; MVA & Trail Blazers
Realty:
Tel: 905-660-7999 / Toll free: 1-866-
890-1999.
Email: info@FlatFeeCanada.com