When buying new construction generally there isn’t much actually constructed yet. Most buyers gain comfort and are able to set expectation for the end result by researching the developer’s track record, understanding key terms and knowing what their assurances are. What’s most important to know? Read on.
Term #1- Temporary Certificate of Occupancy (TCO)
The issuance of the TCO is the first stage of permission to occupy a new development as determined by the Department of Buildings. These certificates are renewable even though temporary, and hold the place until the official Certificate of Occupancy is retrieved. More importantly, it means that the building is safe for residents to live and allows closings to start, while small finishes to the project are being completed.
Term #2- Certificate of Occupancy (CO)
A final Certificate of Occupancy will be issued when the completed work fully complies with the submitted plans and applicable laws, all paperwork is completed, all necessary approvals have been obtained all fees owed are paid, and all relevant violations are resolved. It is not uncommon for final Certificates of Occupancy to take a good amount of time considering all of the logistics involved.
Term #3- Outside Dates
Most new developments have built in outside dates in the offering plan. They require a sponsor to offer purchasers their money back in the event that delivery of the unit is delayed (a certain amount of time) beyond a specified target close date. This is important because outside dates give buyers some protection on delivery delays.
Term #4- Final Walkthrough and Punch-list
Prior to closing, the developer’s representing agent will walk you through your unit for your final inspection. The punch-list compiled on this visit will include all outstanding items that are incomplete or need fixing. The punch list should be brought by you to the closing so that all/the majority items are properly documented and agreed to.
Term #5- Substitutions of Appliances and Finishes
The Attorney General’s regulations require that the offering plan contain the brand name, the types and the model numbers of appliances to be installed, which gives the buyer information on the quality of those appliances, fixtures and finished products. Sometimes substitutions are necessary however these would need to be of equal or better quality.