The Pre-Sale Completion Process Simplified
For all parties involved in condo pre-sales, waiting for completion can be the most difficult stage of the process. Often there is cause for celebration when the vendor’s lawyer issues the official notice to completion. However, many buyers are surprised by the complexity of the closing process. There are a myriad of items which need to be handled in a short period of time. This is a critical time for both the developer and purchaser as unnecessary delays or at worse deal collapse can happen if mishandled.
The following is a quick overview of the steps to make the closing process go smoothly.
90 Day/ 60 Day/ 30 Day Notice to completion
These advance notices educate the buyer on the step-by-step process for smooth completion. Purchasers are asked to arrange financing and provide notary/ lawyer contact which will be sent to brokerage firms. Other matters often arise during this time:
- Name change requests
- Requests for additional names to be added to the contract
- Assignment requests
- Power of Attorney
- Appraisal information
It is important to deal with these issues well in advance of completion. It is also important to provide the buyer with the correct information at the right time so as not to overwhelm.. A carefully sequenced 90 / 60 / 30 Day communication plan easily solves this issue and often contains the following information:
- Estimated building closing date
- Walk-through scheduling information
- Mortgage specialist and legal adviser recommendations
- Strata property management info
- New home inspection instructions
- Introduction to your new home liaison
- Hydro hook-up information
- Announcement on any changes to the building
- Key pick up & move-in scheduling
- Any promotions that apply at completion – Internet, Phone etc.
Proper conveyance is critical. All parties privy to the real estate transaction will be thankful for professional coordination. Time management is important as conveyancing a large project could easily take up to two months. At this point, all data and funds collected need to be carefully audited, organized and verified since they are the major components of the Conveyancer’s Instruction Report.
The Conveyancer’s Instruction Report is a compact summary of the purchase contract including addenda and any other conditions to applied to the contract that are prepared by brokerage firms. The Conveyancer’s Instruction Report will be sent to the purchaser’s legal adviser along with the full contract. The purchaser’s legal adviser will use the Conveyancer’s Instruction Report to proceed with the completion and convey with the seller’s lawyer, lender, strata corporation, BC Assessment and Land Title Office. Brokerage firms will help answer any questions or concerns that legal advisers or purchasers may have at this stage.
After the vendor has confirmed with their construction team that the building is ready to open for inspection, the vendor will coordinate with the site manager and the purchasers on a walk through schedule. Typically there are four to six walk-through appointments in one day and each appointment takes about one hour. Due to security reasons, there may be some restrictions on the number of people allowed to attend the walk through. If purchasers cannot attend the walk-through in person, they can often submit an Appointment of Designate for Purchaser Unit Inspection request to the vendor, essentially assigning someone to complete the walk through on their behalf. During the walk through, the owner and a designate of the vendor will identify and deficiencies in the unit, and the deficiency will be recorded and fixed before completion or shortly thereafter.
In a typical re-sale purchase, the completion date is set out on the contract. However, for pre-sales, the completion date is unpredictable due to construction delays or delays obtaining an occupancy permit from the City. The vendor typically sends out a 10 day completion notice through their lawyers to the buyers lawyer. It is critically that the buyer has pre-arranged all financing requirements by this time or else the buyer could incur penalties. Upon receiving the 10 day notice, the buyer should make an appointment with her/ his lawyer in order to sign documents and arrange for the transfer of funds. The mortgage is registered with the bank on the day of the completion. At the end of the completion, the buyer’s lawyer will notify all parties involved with a letter confirming the registration number to certify that the deal has completed.
Adjustment & Possession Date
Typically possession occurs on the same day as the adjustment date as this is the day they take possession of their home. From this point forward the buyer is required to pay all taxes, strata fees, loans, and local improvement assessments, assessments of the strata corporation, utilities, and other charges from the day of adjustment. The 2-5-10 Home Warranty Insurance Certificate is delivered to the purchasers after possession.
Key handover is normally one day after completion, or based on the vendor’s scheduling.
Purchasers will receive a Move-In letter with contact info for the project representative and instructions on booking a move-in time and elevator.
At Key, we understand the closing process can be overwhelming and we take customer care and conveyancing seriously. It is our objective to ensure happy homeowners and repeat customers. Trust that we are here to assist our developer clients and purchasers at each step during this important time.