Developers Beware: Don’t Forget Your Critical Dates – Or Your Deal May be Dead! - Part 1
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.