Navigating the New Build Purchase Process in Alberta: A Step-by-Step Guide

The prospect of a brand-new home or condo, untouched and built to modern standards, is incredibly exciting. However, the purchase process for a new build is significantly different from buying a resale property. It involves more steps, longer timelines, and unique legal considerations. This guide from Jade Sunrise Law will walk you through the key stages to ensure you’re informed and confident every step of the way.

Step 1: The Purchase Contract & Deposit

Your journey begins with the Agreement of Purchase and Sale, provided by the builder. This is not a standard real estate contract; it is a complex document heavily weighted in the builder’s favour.

• What to Know: This contract will include critical details like the purchase price, lot size, finishes, and, most importantly, the possession date. It will also outline the deposit structure (often 5-10% paid in installments) and place it in a trust account.

• Key Consideration: These contracts often contain clauses that allow for delays (delayed possession), substitutions of materials, and significant price increases for changes. Having a lawyer review this document before you sign is one of the most critical steps you can take.

  
  

Step 2: The Waiting Period & Mortgage Financing

With the contract signed, you enter the construction phase. This period can last from several months to over a year.

• What to Know: Stay in communication with your builder for updates. Use this time to work with your mortgage broker to secure financing. For a new build, lenders typically require a final inspection before releasing the full mortgage funds, so your approval will be conditional.

• Key Consideration: Interest rates can fluctuate during a long build. Discuss a "rate hold" or longer-term mortgage pre-approval with your lender to protect yourself from rising costs.

  
  

Step 3: The Pre-Delivery Inspection (PDI)

Shortly before your possession date, the builder will schedule a Pre-Delivery Inspection (PDI). This is your official opportunity to inspect the property for defects, incomplete work, or items that don’t meet the agreed-upon standards.

• What to Know: Be thorough. Test all appliances, faucets, lights, and outlets. Look for scratches, dents, or improper installation. Document everything with photos and videos.

• Key Consideration: Every deficiency you find must be recorded on the PDI report. This report is the baseline for your new home warranty claims. Do not rush this process.

  
  

Step 4: Understanding Your New Home Warranty

In Alberta, all new homes are protected by a mandatory warranty program under the New Home Buyer Protection Act. This warranty provides coverage for:

• 1 Year: Workmanship and materials.

• 2 Years: Systems like plumbing and electrical.

• 5 Years: The building envelope (protection against water penetration).

• 10 Years: Major structural components.

Your builder will provide you with the warranty documents. Understand your rights and the process for filing a claim.

Step 5: Final Closing & Possession

This is the final step where ownership is legally transferred to you.

• What to Know: Your real estate lawyer at Jade Sunrise Law will handle the closing process. We will review the builder’s Statement of Adjustments (calculating property tax and utility adjustments), ensure all conditions are met, and coordinate with your lender to finalize the mortgage.

• Key Consideration: Builders often set a "firm" closing date. It is essential that all your finances and paperwork are in order well before this date to avoid costly penalty fees.

  
  

Why Legal Guidance is Essential for Your New Build

The complexity of builder contracts and the long-term financial commitment make legal counsel invaluable. Jade Sunrise Law can:

• Review and negotiate the Purchase Contract to protect your interests.

• Explain your warranty rights and the claims process.

• Manage the closing process seamlessly, ensuring a clear title to your new home.

• Advocate for you if disputes arise with the builder over deficiencies or delays.

  
  

Secure Your Dream Home with Confidence

Buying a new build is an exciting journey that requires careful navigation. Being informed and having the right professional team empowers you to make the best decisions.