You've found the condo project of your dreams. You were immediately captivated by the developer's plans and signed a preliminary contract to purchase one of the units. It was agreed you could take possession in six months, once construction was completed. You've made arrangements to leave your current residence in time to move into your new condo without having to pay two mortgages. Everything is set, and the move-in date is approaching. But suddenly, surprise: you're informed that the delay will not be six months but ten months. What can you do?
Unfortunately, delays in delivering new properties are common. Many unforeseen issues can occur on a construction site: bad weather, excavation problems, permit issues, or delayed delivery of materials.
Here are some tips to protect yourself—as much as possible—from delivery delays in a real estate transaction.
Check the developer’s history
First, it's essential to know what type of developer you're dealing with. Experts from the CondoLegal website advise starting at the beginning, namely verifying whether the developer holds a valid license from the Régie du Bâtiment du Québec. This information is easily accessible by consulting the Régie's registry.
Next, look into the developer's previous projects: do they have a good reputation? Are buyers generally satisfied? Or is the developer subject to lawsuits?
Also, verify the developer's experience. Is this their first construction? Less experience typically means higher risks of delays! Not finding any information on a developer could mean they operate under a different company name for each project—which isn't necessarily a good sign.
Ask the right questions
Before signing your preliminary contract, ask the developer if construction has already started. If not, ask whether they have obtained the building permit and demand proof. If the developer hasn't obtained permits yet, significant delays could occur.
Also, inquire about the percentage of units sold or about to be sold. Often, developers fail to sell enough units off-plan. Insufficient funds from sales can lead to construction delays.
Make arrangements in advance
Don’t wait to see if there will be a delay; anticipate potential issues by discussing them with the developer when signing the preliminary contract. How will they compensate buyers if there's a delay? Will they cover moving expenses or furniture storage? Will there be a price reduction? Always make a written agreement—not just verbal—to address unexpected situations.
Additionally, agreeing on a flexible delivery date—such as between July and September—can save you from inconvenience. Who knows, this arrangement might even help you negotiate a better price.
Carefully review the preliminary contract
A clause in the preliminary contract specifies the expected delivery date and states that if the developer experiences delays due to force majeure (war, fire, etc.), they aren't responsible and don't have to compensate you.
Ensure—ideally with help from a real estate professional like a notary, broker, or lawyer—that this potentially tricky clause isn't unfairly disadvantageous. Carefully understand the circumstances under which the developer can delay your property's delivery without consequences, and negotiate removing certain conditions if possible.
Again, it’s essential to emphasize: document all agreements in writing.
What does the law say?
In case of delayed delivery, is the developer obligated to financially compensate you? If they're accredited under the GCR mandatory warranty program, the answer is yes. Buyers may receive compensation up to $6,000 for delivery delays. These funds can cover moving expenses, temporary accommodation, and storage until possession of the property.
In summary, vigilance and thoroughness are critical in a real estate transaction. Delivery delays are just one example of the unpleasant surprises buyers risk if they're not careful. Although buying a property can be emotionally charged, keep a cool head and ideally, seek guidance from professionals such as notaries, lawyers, and real estate brokers throughout every stage of the transaction.
