As a condominium property owner, it can sometimes be easy to forget about important details and to complete due diligence. This can lead to relatively small problems, such as hiring an unlicensed crew to perform common area property maintenance and being dissatisfied with the work, as well as to major legal and financial headaches. For example, failure to go over condominium plans with prospective buyers to confirm that the size, location and layout of the actual unit match the official plan is a mistake that can cost property owners big time. It's also a mistake that is completely avoidable.
Surprisingly, there have been a number of cases in which buyers have moved into condominium units only to find they differ from the plans as presented. For example, alterations that previous owners made may not be reflected in the original plans, which should have been updated before the unit went on the market.
In one case, an owner successfully sued a condominium corporation, as it was not made clear that a renovated third floor was not legally part of their unit. This cost the condominium corporation $300,000 plus legal fees for a long trial. In another case, 22 homeowners in a Toronto condominium community were notified that they are not living in the correct units-and that these units in fact have titles registered to other people. As you can imagine, this was a nightmare for the condominium corporation and all of those homeowners to deal with.
Being transparent with buyers
Maintaining an accurate plan for each unit and reviewing the plan with prospective buyers should be common practice. At the very minimum, real estate lawyers need to do this before closing, though it's also recommended for real estate agents. Condominium plans are available for a nominal cost, so there's nothing that should prevent this from happening. The upfront cost of time and money is low, but the potential cost associated with a buyer ending up in the wrong unit is high.
To return to the Toronto example mentioned above, title insurers needed to spend tens of thousands of dollars to exchange titles and ensure that the right people ended up in the right units. All this happened because someone along the way failed to do their initial due diligence and review the plans with the buyers. Moreover, the courts have consistently sided with buyers when it comes to the responsibility of real estate professionals to match the correct owners with their units.
If you have questions about the legal implications of running a condominium corporation or anything else about property management, the team at Imperial Properties is ready to help. We have developed a reputation for being the best in condominium, commercial and residential property management in Western Canada. As a leader in our field, we provide all our clients with unparalleled management expertise as well as exceptional service, knowledge, efficiency and cost effectiveness. Contact us today to learn more about our services and arrange a free consultation.