This article addresses questions raised on the topic of Administrative Fees in connection with your Agreement of Purchase and Sale.
Definitions used in this article:
- Fee - refers to administrative, processing, or service related costs where human labour is the primary expense.
- Cost - refers to the price of physical item
- Adjustment - refers to a fee, cost, or expense that is paid by one party, either the Vendor or the Purchaser, and split proportionately between each party based on the responsibility to pay. Property Tax is a prime example: if the Vendor pays 100% of the Property Tax in the year the home occupies, the amount that was the Purchaser's responsibility to pay will be "adjusted" so both parties pay their fair share.
- Penalties - charges that are only incurred if a Purchaser follows a 'non-standard' purchase path.
- Typical Purchase Path - Refers to the purchase of a unit that follows the basic customer journey from start to finish with no aberrations. A Typical Purchase Path looks like this:
- Purchase Agreement signed
- 10-Day Cooling Period to confirm details and request changes (changes at this time do not incur fees)
- Agreement becomes Firm
- Deposit Cheques provided
- First Deposit cheque cashed
- Second Deposit cheque cashed
- Decor Selections made and paid for
- Third Deposit cheque cashed (variable timing)
- Tentative Occupancy Date becomes Firm Occupancy Date
- Occupancy preparation
- Pre-Delivery Inspection completed
Fees can be divided into three broad categories:
Category 1 - Required Fees
Required fees are the costs you can expect to pay for specific services and expenses relating to a 'typical' purchase scenario. These include cheque processing fees, Tarion enrolment fees,