Condominium rules have changed a lot in the last two years. And it’s a good thing. But… it means there is a lot more red tape, and more legalities involved in the newer and more convoluted legislation.
So it’s pretty critical to mind your Ps and Qs in a condominium transaction. Specifically, we want to make sure that all the documentation you are legally supposed to receive (and then later, when you’re selling, are legally required to pass on to the buyer…) is there, complete and current.
A Client’s Close Call
This summer, a client of mine was in the market for a condominium. My client and I were looking over the property in person.
As my client walked through the clubhouse, imagining himself living there, I noticed in a display rack there were two copies of the Reserve Fund Study, which happens to be one of the required documents. On the front of it was stamped, “Clubhouse property, do not remove.” While my buyer looked around, I skimmed the documents.
Later, when we got the documents, I noticed it was missing the evidentiary part of the Study Report which was the charts and graphs portion. To some, it might not seem like a big deal, but I’m very informed on the requirements given I instruct the Provincial Licensing Course and know that it can absolutely become a big deal. The parts that were missing were referenced within the provided Reserve Fund Study Summary, so should have been included.
My client would later have to sign an affidavit swearing to his having received 'ALL' and 'COMPLETE' documentation.
That, my friend, is a legal pickle, not to mention incomplete information with which to make a decision as big as this as to the health of the condominium corporation of which as a would-be owner would have interest in.
So, having caught the error, I requested the full documentation on behalf of my buyer and was after able to acquire them. Had the documentation not been provided, the purchase would have likely not finalized causing undue stress for both the seller and buyer, added legal expense for both parties and additional work on the part of myself and the sellers agent, all of which is unnecessary.
How to Tell Documentation is Missing
The documentation involved in a condominium transaction can vary widely. The package can be ½” to 3+” thick, it can include a 3’ long cardboard tube of drawings, or maybe a jump drive. I listed the critical documents to watch for here.
Really, there’s pretty much only one way to make sure all the documentation is there, and that is to get the right professionals on your team. If the real estate agent, lawyer, and lender are each well versed in condominium transactions, you’ll be well protected.
Have more questions? These may help:
New Condominum Rules - A Quick and Simple Overview
How to assemble your professional team (even if you’d rather curl up and die)
Need a Real Estate Agent Who's Got Your Back? Here's What to Look For.
Buying a Condo? Protect Yourself; Watch for These Critical Elements
Also, we can just talk in person. Coffee’s on me ;)