Your agreement will contain clauses making you responsible for extra charges or “adjustments” upon the closing of your purchase: Most builders require you to pay for the cost of connecting meters to measure utility consumption on the property for water, hydro and/or gas. You also are usually required to pay for the fee of enrolling your home under the Ontario New Home Warranty Program, for costs of planting trees on the boulevard, for costs of erecting a perimeter fence, and for costs of paving your driveway. Your agreement may or may not specify the exact amount of these expenses. In some cases, the agreement may put an upper limit on what the builder will charge. In any event, these expenses will be added to the amount of money you have to pay to the builder on the closing date, and they can total thousands of dollars.
Tax & Grading Deposits
In addition, you may be charged deposits on account of property taxes and grading assumption. Property taxes for new homes usually are not assessed when you are ready to move in. It may take a couple of years. Builders may require a deposit (estimated at their own discretion) for property taxes that will not be returned or readjusted until your municipality finalizes the taxes for the property. You may also have to pay your builder a deposit for grading, which will not be returned to you until the municipality assumes the grading of the subdivision. Although you often have the right to get the deposit money back, it could take many years before the city approves grading and/or the subdivision. If you are assuming a builder’s mortgage or the builder’s insurance, these items also will be adjusted as of the closing date.