Real Estate

New Townhouse purchase being used as Office without disclosure

  • Last Updated:
  • Jun 29th, 2019 1:17 pm
Newbie
Nov 3, 2015
6 posts
6 upvotes
Toronto, ON

New Townhouse purchase being used as Office without disclosure

I recently dropped an deposit for a pre-construction stacked condo townhouse with a move in date for 2020. I'm currently in day 1 of the 10 day cooling period. After we registered the unit and signed the Agreement of Purchase, we went on a tour of the unit and discovered the property is being used as the development project sales office. I also noticed a one page "as-is clause" legal document in the provided agreement package (beware of electronic agreements!), which indicate the builder is not responsible for repairing certain damages such as scratches, scuffs or plumbing caused by using the unit as an sales office. An agent did verbally mention that the builder will make necessary repairs during the pre-delivery inspection. However, the as-is clause was not disclosed nor was it mentioned anywhere in the brochures that the unit will be used as an office until occupancy (summer 2020). I'm worried because the appliances (provided for free by the builder) are also being used by the office staff. Not to mention someone else is using my toilet!

I've talked to a few agents and they've mentioned the builder should have disclosed the as-is clause and that the unit is planned to be used as an office. The price of the unit is not discounted nor is it a model home.

Any thoughts or suggestions before I reach out to the builder negotiate some concessions?
19 replies
Deal Addict
Jan 1, 2017
1826 posts
1876 upvotes
How is this preconstruction if the house is already built and being used as an office?
Member
Oct 21, 2013
305 posts
161 upvotes
waterloo, on
in that case, you're not getting new appliances. those are used appliances. they should have applied a discount towards it. it being used as an office is whole another level. you have to decide if you're ok with both things. appliances usage alone will put me off if i was the one buying it. you're paying the price for new but getting used ones instead.
Last edited by DealsFreak on Jun 25th, 2019 2:50 pm, edited 1 time in total.
Serving Kitchener/Waterloo/Guelph/London/Hamilton/Niagara and surrounding areas
Deal Expert
Feb 29, 2008
21738 posts
21353 upvotes
Tarrana & The Ri…
If you're not getting it at a discount then no-go.
Deal Fanatic
Jan 31, 2007
6371 posts
6733 upvotes
Center of Canada
Here is couple points:
1). First, those appliances are not FREE by any mean. They are part of the deal. Which mean builder packaged into the deal, and you have no say what is being use.
2). In your case, I don't think it consider pre-construction. You can't select all the color and differ finishing.
3). Compare it as buying a car, it is NOT buying a new car, it is buying a DEMO, which the sales manager drive home everyday, for 2 months, and got other customer to test drive it daily. You also don't have choice on color trim, what leather seat, what option etc.

In my view, No go if you after is a BRAND NEW home that you can pick and choice your own finishing.
******************************************************
Bright side of RFD: Often find good deal
Dark side of RFD: Tons of stuff that I don't need but still got them because of RFD
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Deal Fanatic
Apr 5, 2016
6116 posts
4613 upvotes
Calgary/Vancouver
Oh man this sucks. Definitely go back and negotiate, if they try to give you any hard time, just take back the deposit and go elsewhere. I would negotiate for 3% and see how far they go down. Markets are cooling and builders are the one's suffering. I'm sure you can find something else.
Deal Fanatic
Jul 3, 2011
6517 posts
3798 upvotes
Thornhill
Use the remaining cooling-off period to consult with an attorney for revisions to the offer. The builder's form and their agent is looking after the builder's interests not yours and until you take countermeasures in support of your interests they will take full advantage of you.
Deal Addict
Dec 4, 2016
2011 posts
1030 upvotes
Another reason why it might be a good idea to spend the money on a lawyer who will review the purchase agreement. You're buying the promise of a condo, and the contract can have a million got-cha clauses.
Penalty Box
Mar 27, 2004
10493 posts
9009 upvotes
Toronto
consult lawyer. thats what the 10 day cooling period is for. if you cant come to agreeement just back out. nothing to lose.
Full-time Realtor
Member
Nov 5, 2009
383 posts
331 upvotes
I think other posters are overly paranoid for no reason. Theres a legitimate concern if you dont like it being used as an office but to complain that someone may use the toilet or the fridge??

Oh no the horrors!! Most of your concerns are over blown and silly. If your not happy you should cancel. With that in mind it seems your happy with the layout, the price and the location?? A simple conversation with the builder will probably address things for you.
Newbie
Jul 9, 2018
89 posts
73 upvotes
I think the appliance concerns are legit, appliances normally come with a 1-year warranty which will be expired by the time OP moves in. I wouldn't care about the toilet being used.

I am confused about how this happened, the move-in date is 2020 but the unit is already built and being used as an office? It must have been clear the unit was already built since they were offered the tour of the unit. I don't understand how the confusion could have occurred.

My only other thought is that perhaps the tour that was given was of a similar unit (same floor plan) that is being used as an office but is not the actual unit OP will be getting and they were mixed up? Or that this was the last unit left for sale, because it is being used as an office. But you'd think the sales person would have made that clear at the time of sale.

Anyway, OP, it's up to you whether you think it's worth it. I would not expect it to be in mint condition if it's had daily use as an office, so if that's a deal-breaker, then break the deal now while you still have the chance.
Deal Addict
Dec 10, 2007
2457 posts
206 upvotes
I take it that you never visited the site before signing the papers? Anyway I'd definitely back out (and possibly negotiate).
Deal Addict
Jun 7, 2017
1043 posts
836 upvotes
BC
Insist on a discount or else back out. Easy.
Deal Addict
Jan 28, 2007
2321 posts
1676 upvotes
SW Ontario
Cancel the purchase, as there is no TLC by the staff when used as an office.

This is not a new home, but a Demo as others have suggested ... used appliances, used fixtures, used HVAC, excessive wear and tear on the doors, floors, etc.
I'd rather be outdoors camping, kayaking, and mountain biking ...
Deal Addict
Jan 19, 2008
1682 posts
1580 upvotes
Etobicoke
As being used as a office/model home , it will most likely, not be eligible for the Tarion warranty. This was the case when I bought my townhome 15 years ago. Mine was not used as an office, but the one opposite of mine was.

I would for sure look into it.

From the Tarion website:

Model Homes, Sales Offices, Inventory Homes

The question of whether or not statutory warranties extend to sales of pre-built homes held in “inventory” or homes used as a display or model homes or sales offices to home buyers can be complex. The statutory warranties were developed for new homes and do not extend in certain circumstances to dwellings previously occupied. You should discuss with the vendor the nature and extent of the warranties being offered by the vendor and in particular any exclusions to warranty proposed by the vendor. Any proposed exclusions or exceptions should be specifically identified and itemized. These matters should all be addressed before signing the purchase agreement. If you have any questions, contact Tarion at ismyhomecovered@tarion.com.


And I have to ask you ryousif ( OP ), are you trolling? You have been a member for 4 years and have one post? I do really want to help you with my posting, but I am afraid you are just trolling, and this is a joke posting.
Last edited by xxxray on Jun 25th, 2019 9:09 pm, edited 2 times in total.
Deal Addict
User avatar
Jul 4, 2006
4625 posts
1342 upvotes
xxxray wrote: As being used as a office/model home , it will most likely, not be eligible for the Tarion warranty. This was the case when I bought my townhome 15 years ago. Mine was not used as an office, but the one opposite of mine was.

I would for sure look into it.

From the Tarion website:

Model Homes, Sales Offices, Inventory Homes

The question of whether or not statutory warranties extend to sales of pre-built homes held in “inventory” or homes used as a display or model homes or sales offices to home buyers can be complex. The statutory warranties were developed for new homes and do not extend in certain circumstances to dwellings previously occupied. You should discuss with the vendor the nature and extent of the warranties being offered by the vendor and in particular any exclusions to warranty proposed by the vendor. Any proposed exclusions or exceptions should be specifically identified and itemized. These matters should all be addressed before signing the purchase agreement. If you have any questions, contact Tarion at ismyhomecovered@tarion.com.
This is hilarious. The builder will probably tell teh buyer that they are getting a discount bc there won't be any Tarion fees. haahhah!
Newbie
Nov 3, 2015
6 posts
6 upvotes
Toronto, ON
Hey all thanks for your posts! Very helpful and touched on valid points that made me question the deal. Yes this is a legitimate situation I've sadly found myself in. The development is pre-construction stacked condo townhouses, however the unit i signed an agreement of sale is constructed. The builder did a good job of preventing the public to go inside the unit. Hence, it was not possible to notice the unit being used as an office. There was a tour of a model home with a similar layout. However, i did not have the opportunity to tour the unit i purchased before signing the agreement.

As noted the appliances provided are covered for just a one year warranty. Which a simply google search can tell you how quickly new appliances deteriorate. So this is a concern. I've consulted with lawyers and awaiting a response. But I defiantly want to push for a discount or some additional incentives for the risk of purchasing an as-is house. The toilet reference is indeed a joke, and the refrigerator is what is mainly being used by the staff. Its a tricky situation because the price of the unit overall is affordable for location and size.

The tarrion warranty is also a concern. The as is clause in the agreement states that the damages caused by using the unit as an office will not be covered in the pre-delivery inspection.

Appreciate everyone's advice. The reason for the rare post is to inquire second thoughts, share the knowledge and help others beware of shady tactics.
Deal Addict
Jan 13, 2014
2907 posts
2135 upvotes
Calgary
i have dealt with quite a few show homes and have been a part of the show home sales. You need to remember that a show home should be sold either as a used unit or sold right away with a contract to the purchaser of a signed lease. This is quite simply the builder double dipping here and you wont be getting the warranties associated with a new home. I would personally back out until or unless there are significant price reduction.
Deal Addict
Apr 6, 2008
1807 posts
1168 upvotes
If you're concerned about someone else being first to use "your" toilet, you should see houses during construction. A toilet is the least of your concerns. I don't really agree with the as is part of the contract, but if the price is right and you like the house, mind as well go ahead. Just make sure all repairs etc are taken care of before you take possession.

Appliances are cheap, assuming they are builder grade. You aren't going to harm a fridge much by storing employees lunches in it for a few months. This is the equivalent to a bit of dirt on a brand new car. Sucks but it shouldn't change anything.
Newbie
Nov 3, 2015
6 posts
6 upvotes
Toronto, ON
Just update. - After consultation with a couple of lawyers who did not recommend the purchase due to risk of damages and loss of warranty we decided not to proceed with the purchase. I highly recommend everyone to ask numerous questions when purchasing a pre-construction and review necessary legal work.

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