Developers Beware: Don’t Forget Your Critical Dates – Or Your Deal May be Dead!

Part 2 – Leave No Blanks Behind*

Post by: Meghan MacDonald

This post continues the discussion of the potential issues surrounding the Critical Dates in the Tarion Delayed Occupancy/Closing Warranty Forms.

Part 1 discussed the importance of making sure that Vendor’s agreements of purchase and sale for new housing do not have any provisions that permit the Vendor to make changes to Critical Dates or automatically extend those dates contrary to the provisions in the Tarion Schedule.

It is equally important to make sure that the Critical Dates are filled out in the Statement of Critical Dates.**  The Tarion Forms state that if the Critical Dates are not filled out, the Purchaser can terminate the deal:

If: calendar dates for the applicable Critical Dates are not inserted in the Statement of Critical Dates; or if any date for Occupancy (or Closing for freehold) is expressed in the Purchase Agreement or in any other document to be subject to change depending on the happening of an event (other than as permitted in this Addendum), then the Purchaser may terminate the Purchase Agreement by written notice to the Vendor. (emphasis added)

It may seem obvious that Critical Dates always need to be filled out in the Tarion Forms, but consider the following situation that could occur with a home on a Parcel of Tied Land to a Common Elements Condominium:

  • Vendor creates a Common Elements Condominium with single homes as Parcels of Tied Land to the Common Elements Condominium;
  • The condominium is registered and there is no occupancy period for the homes, just a regular closing date;
  • The Vendor does not fill out the Critical Dates on the Tarion Form because there is no occupancy period;
  • A Purchaser of one of the homes decides she doesn’t want to close the deal and uses the Vendor’s failure to fill in the Critical Dates on the Tarion Form as justification for terminating the deal.

The Tarion Forms do not account for situations where there is no occupancy period for registered condominium units.

There is rarely an occupancy period in agreements of purchase and sale with respect to registered and completed condominium units, yet this registered unit is still a condominium unit and the Vendor must use either the Tentative or Firm Condominium Occupancy Schedule.

It is not clear why there is no Tarion “Firm or Tentative Closing Date Schedule” similar to the form used for a freehold  home for registered condominium units which have no occupancy.

Neither is it clear why the Tarion legislation requires the use of an occupancy schedule for all Parcels of Tied Land to Common Elements Condominiums.  Most Parcels of Tied Land to a Common Elements Condominium are freehold and don’t have occupancy provisions because the Common Elements Condominium was registered long before home completion.

Regardless, if the Vendor of a  new condominium unit that is not going to have an occupancy period or a Parcel of Tied Land which is not going to have an occupancy period fails to have the Statement of Critical Dates filled out a Purchaser can kill the deal for failure to include those dates.  At least that’s what the required schedules say.

Therefore it is essential in these cases where there is to be no occupancy of a registered condominium unit or Parcel of Tied land to simply fill in the home’s closing date for all Critical Dates and put an outside occupancy date as far past that as possible because if you miss that date the deal is dead too.

Bottom Line: never forget to fill in all of the dates on the Statement of Critical Dates even if there is no occupancy period, otherwise you run the risk of the purchaser terminating the agreement.

* Part 2 of a 3 part series on the potential issues surrounding Tarion’s Critical Dates.

** The Statement of Critical Dates is part of the Tarion Delayed Occupancy/Closing Warranty Form which must be attached to all agreements of purchase and sale for newly built condominium units and freehold homes.

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Developers Beware: Don’t Forget Your Critical Dates – Or Your Deal May be Dead!

Part 1 – Consistency is Key*

Meghan MacDonald

When completing agreements of purchase and sale for homes on newly built parcels of tied land, condominium units and freehold homes, do not overlook the importance of this section of Tarion’s Delayed Occupancy/Closing Warranty Forms:

If: calendar dates for the applicable Critical Dates are not inserted in the Statement of Critical Dates**; or if any date for Occupancy (or Closing for freehold) is expressed in the Purchase Agreement or in any other document to be subject to change depending on the happening of an event (other than as permitted in this Addendum), then the Purchaser may terminate the Purchase Agreement by written notice to the Vendor. (emphasis added)

Many agreements of purchase and sale contain clauses that allow the Vendor to extend the occupancy/closing date due to the actions or omissions of the Purchaser.

For example, many agreements state that the Vendor has the right to extend the closing/occupancy date if the Purchaser has not chosen extras (e.g. a walkout basement, custom cabinetry or a sunroom addition) or colours for his/her home by a certain date.

If these clauses in the agreement of purchase and sale do not conform to the Tarion process for extending Critical Dates then, according to the Tarion section above, the Purchaser can kill the deal.

Bottom line: all home vendors should go through their agreements of purchase and sale and all related documents to make sure there are no clauses that permit the Vendor to extend the occupancy or closing date except in strict accordance with the provisions in the Tarion Schedule, otherwise the Vendor runs the risk of having an unenforceable agreement.

* Part 1 of a 3 part series on the potential issues surrounding Tarion’s Critical Dates.

** The Statement of Critical Dates is part of the Tarion Delayed Occupancy/Closing Warranty Form that must be attached to the agreement of purchase and sale.