Revised March 5, 2003

Once the purchaser of a new condominium unit enters into an agreement of purchase and sale, the developer must provide the purchaser with a Disclosure Statement. The purchaser then has a 10 day "Cooling Off Period" to review the Disclosure Statement and decide whether or not to proceed with the purchase.

A purchaser should take advantage of the Cooling Off Period to study the Disclosure Statement and review it with a lawyer. It is important to see a lawyer early in the ten day period so that there is ample time to study the documentation and discuss it with the client. If you decide not to proceed with the purchase, you can cancel the Agreement of Purchase and Sale during the ten day period and get a full refund of your deposit.

The Disclosure Statement is accompanied by extensive documentation. The package is meant to give the purchaser of a new condominium all of the information and documents needed to make an informed decision about whether or not to proceed with the transaction. The Condominium Act dictates the content of the Disclosure Statement and the document package that accompanies it. It would take more than the allotted space for this column to give you an exhaustive list of what must be in this package. Here is a sampling of what must be included in the Statement:

• A provision indicating whether the condominium is a freehold or a leasehold condominium. If the condominium is freehold, the provision must also indicate whether it is a standard, phased, vacant land or common elements condominium;
• The name and municipal address of the developer (the "Declarant" in Condominium Act terms) and the mailing and municipal addresses of the condominium property, if available;
• A general description of the condominium property;
• Confirmation that the condominium property is, or may be, subject to the provisions of the Ontario New Home Warranties Plan Act and whether the proposed units and common elements are enrolled, or are intended to be enrolled;
• An indication as to whether any building or unit proposed to form part of the condominium has been converted from a previous use;
• A statement indicating whether any of the units, or proposed units, may be used for other than residential purposes;
• A provision as to whether the Declarant intends to market any of the units to investors and if so, the number of units that may be sold to investors;
• What percentage of units the Declarant intends to lease;
• A schedule of the intended commencement and completion dates with respect to the condominium's amenities that have not yet been constructed or completed; and
• A list of the proposed amenities that will be provided to purchasers during the period of interim occupancy.

The document package that accompanies the Disclosure Statement must include a copy of the condominium's existing or proposed by-laws, declaration, rules, trust agreement and other contracts and leases that will affect the completed condominium. It will also include a copy of the proposed budget for the condominium for the first year following its registration, or, if more than one year has passed since the registration of the condominium, its budget for the current fiscal year.

While this package of information may seem daunting, it is very important that prospective purchasers read it and get advice about it well before the end of the Cooling Off Period. If a lawyer is contacted early, there should be no trouble arranging for timely review of the documents. Every effort should be made to avoid having to make a last minute decision about whether or not to proceed.