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CAN BUILDERS CHEAT YOU ON SIZE IN TORONTO REAL ESTATE?

By CondoWong Friday, November 22, 2019

When you purchase a pre-construction condo, you have to rely on marketing floor plans and sales brochures.

On the marketing floor plan, it says that the unit is 500 square feet and it specifies the dimensions of each area.

When you sign the agreement of purchase and sale, you see the same floor plan, but without any dimensions.

The total square footage of the unit is not specified either.

Does that mean the builder is planning to cheat you on size?

In Ontario, new homes are governed by the New Home Warranties Plan Act and Regulations.

The Ontario government has empowered Tarion to administer and enforce the act.

Every builder in Toronto must be registered with Tarion and enrol every new home to the Tarion New Home Warranty program prior to the start of construction.

Question #1

Are builders required to indicate square footage in their materials?

The answer is no. They are not required to indicate the square footage.

If they do so, they do so voluntarily.

However, if they do choose to indicate the square footage in any materials, then they must follow Tarion’s approved method of area calculation and guideline for variance.

It doesn’t matter that the dimensions and square footage are on the marketing floor plan but not on the actual purchase agreement.

The marketing floor plan is a builder material and must therefore obey the Tarion guidelines.

Question #2

What is the approved method of area calculation?

When calculating area that meets an exterior wall, the measurement starts from the exterior wall.

For walls that separate one unit from another, measure from the halfway point between the walls.

The area that you get is the total area of your unit.

The balcony size is not included in the total area calculation.

Question #3

What is the tolerance on the size difference?

Tarion says that a tolerance of 2% is considered acceptable.

If a 500 square feet unit turns out to be smaller than 490 square feet, that is not acceptable.

You can go after the builder if this guideline is violated.

It is nice to know that the regulations are there to protect us, but we all know that it can be very frustrating to find a resolution when rules are violated.

So instead of getting the problem fixed, why not avoid the problem in the first place?

There are numerous builders in Toronto, but there are only a handful that we are confident with.

We should only select builders who respect the Tarion guidelines, the ones who build with conscience.

So how do we identify those builders?

There are 2 things that I look for.

#1 History

If a builder has been building in Toronto for the past 60 years and we haven’t seen any Tarion violation complaints, that’s a big vote of confidence.

If a builder is a multiple-time Tarion award winner, then that’s pretty much like a satisfaction guarantee.

#2 Brand

When you choose a brand, you’re buying the brand’s reputation.

In the condo building industry, if you hear brands like Tridel, Menkes, Daniels, you feel confident because they are famous for excellence.

As Warren Buffet says “it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”.

This is the reason why you don’t see me selling every single project out there because a bad project doesn’t just ruin the developer’s reputation, but also my reputation.

In conclusion, you know that the rules and regulations are there to protect you, but your life will be much easier if you choose someone who is reputable for respecting them.

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