Glossary · The buying process
Down payment
Also called: Contract payment, Deposit
In short
The part of the price paid when the sale and purchase agreement is signed and during construction, before the balance at transfer. Commonly 10 to 30 percent at signing.
What it means
The words are used loosely. Some developers call only the payment at signing the down payment; others use it for everything paid before transfer, instalments included. Read the payment schedule to see which is meant.
How it works
- It falls due when you sign the contract, usually within a few weeks of reserving.
- The reservation fee is deducted from it.
- It is paid to the developer and is not held in escrow unless the project uses an escrow arrangement, which few do.
What to keep in mind
What you pay before completion is the part of the price exposed to the developer. If you cancel without a right to, the contract says how much of it the developer may keep. If the developer fails to deliver, the standard condominium contract entitles you to have it back with interest.