Q+A with Irina Popova Jan. 4, 2020

By Marlene Eisner
January 03, 2020

Irina Popova is a real estate agent and co-owner of Blue Panda Realty, and has been specializing in the central Ottawa market since 2013. We asked Irina some questions to help you on your new-home buying journey.

New Home + Condo Guide: Should buyers of a newly constructed home get a home inspection?

Irina Popova: When you purchase a newly constructed home directly from the developer, the property is registered under the Tarion Warranty. This warranty protects consumers and acts as a regulator for all builders in Ontario. It ensures that builders abide by all building codes and quality standards of construction.

Irina Popova

An important part of Tarion is the Pre-Delivery Inspection (PDI). This occurs before you take occupancy and is conducted by a representative of the developer.

During PDI, the purchaser does a thorough inspection of the home and can choose to have a licensed home inspector present (at the buyer’s expense).
Any deficiencies found during the PDI are then addressed by the builder before occupancy. In my opinion, to hire an inspector or not depends on a few factors: The type of property (condo or house?); the experience of the buyer (first-time buyer or an experienced homeowner?); and one’s risk tolerance.

Pro-tip: Ask your Realtor to attend the PDI. Most will be happy to do so and will point out deficiencies you might not have noticed yourself.

NHCG: There are so many new developments out there and they all seem to offer something different. How do you organize the information to make comparisons easy and relevant?

IP: Shopping for a pre-construction property can be time-consuming. Buyers often have to go to multiple websites and sales centres to gather all of the necessary information. NextHome.ca is a great source of information on present developments and is the website I often use for reference. I also suggest working with an agent that’s experienced in pre-construction sales in the areas of the city you’re looking in. It’s their job to stay fully informed on upcoming projects, completion dates and price differences between various developments. If you do decide to do all of the leg work yourself, plan to actually visit the sales centres for every project.

Most developers do not have complete price lists or occupancy dates available on-line.

NHCG: For anyone looking to buy a new condo, some terms may seem unfamiliar. Could you explain some of the more common ones?

IP: There are a couple of fundamental terms that every new-condo buyer needs to be familiar with. Let’s start with “Condo Fees”. This is a monthly payment made by every owner of a unit in a condominium. In most buildings, condo fees are calculated based on the size of the unit, so those who own larger properties pay more in condo fees.

Condo fees consist of a few components: Cost to maintain the building day-to-day (cleaning, snow removal, common area utilities, property management fees, amenities, etc.); contribution to the reserve fund (this is essentially a savings account for major repairs or replacements); and unit utilities (in many buildings water and heat are included).

An important thing to keep in mind when buying a pre-construction condo is that the condo fees advertised by the developers are often lower than what they will actually be once the building is operating. Developers do their best to estimate how much the building will cost to maintain, but in a lot of cases, their estimates are too low and don’t account for changes in regulations, increasing labour costs and many other factors. I strongly suggest budgeting your monthly costs with that in mind and anticipate an increase of the condo fees by 10-15 cents per square foot.

Another important term you need to know when purchasing a pre-construction condo is “Occupancy Fees”. This fee is essentially rent paid to the developer during the period of time between the date of occupancy and the registration date. The occupancy fee is made up of three parts: Interest on the remaining balance of the purchase price of your condo, municipal taxes for your unit, and the condo fees for your unit. The good news is that a majority of the time, this amounts to less than the actual rent would be for the property.

This period is also known as “interim occupancy”, the date when you get the keys to the unit and have the legal right to occupy the property, but you do not own it yet. Once the building reaches a certain percentage of occupied units, the developer can start the registration process with the city in order to declare the building status as a condominium. Once the building is registered, you become a homeowner and start paying your mortgage, property taxes
and condo fees. Interim occupancy can last anywhere from a few weeks to over a year, which is why it’s extremely important to be aware of this and budget accordingly. It’s essential to note that most developers do not allow rentals in the building during interim occupancy. This works against investors, since this could mean months of vacancy and lost income. Make sure to negotiate with the developer and attain the right to rent your unit, if that’s the reason for your purchase.

Related reading

Q+A with Irina Popova, co-owner of Blue Panda Realty

About Marlene Eisner

Marlene Eisner is an award-winning print and online editor and journalist. She has written on many topics including new homes and condos in Montreal, Ottawa and Vancouver, and has been the editor for numerous magazines and newspapers in Quebec and Ontario.

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