The Contract

Once you have found the right builder and decided on the home you want, you are ready to work out the contractual arrangements. With large builders, this is usually done at the sales office, where you and the salesperson together work through the items that go into the contract. Alternatively, the builder may write up the contract on their own and present it to you for consideration. Or you may choose to have your lawyer prepare the contract.

Commonly referred to as the Agreement of Purchase and Sale, the contract is a legally binding document that outlines the terms and conditions of your purchase. There is no mandatory or standard contract form; many professional new home builders use forms adapted from model contracts developed by their provincial Home Builders' Association or new home warranty program.

What Should the Contract Cover?

The contract will describe the lot, the model, the selected upgrades and other obvious items such as the price and financing terms. In addition, it should include information on restrictions and obligations that may affect your rights and responsibilities as a home owner, such as:

Rights of way or easements registered against the lot. For instance, will there be a fire hydrant on your lot, or an electrical box?

Subdivision requirements. For instance, there may be restrictions on the number or kinds of trees that you may plant. Or restrictions on parking commercial vehicles, trailers and boats or performing general automotive maintenance in the driveway. Or on installing a satellite dish.

Municipal bylaws that regulate activity in the neighbourhood. For instance, are there any restrictions on nanny or in-law suites, home businesses or storage buildings?

All of the above should be covered in "Schedules" which form part of the Agreement of Purchase and Sale.

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