Don’t miss Part One of the Legal Aspects When Buying a Condo. There are also big-ticket considerations to watch out for, and then there are the little things that you may not have thought about. Becoming familiar with all of these considerations and the legal aspects when buying a condo or co-op will reduce the chance that you’ll be surprised during the buying process, or during your ownership!
In Part Two, we’ll break down some common legal issues when buying a condo or co-op, and what you can do to reduce or resolve these issues.
- Mortgages and Financing
- Disputes with the Corporation
- Non-Disclosure or Misrepresentation
- Bylaw and Regulatory Compliance
- Resale Restrictions and Approvals
MORTGAGES AND FINANCING
This may go without saying, but work with your lender and your legal representation to ensure that you are in compliance with financing obligations when buying a condo or co-op. There might be specific requirements for these types of properties or your particular purchase. Mitigate any issues by getting ahead of the rules and receiving proper guidance.
DISPUTES WITH THE CORPORATION
Before making your purchase, carefully review the corporation’s governing documents. Look for how the process works for disputes that may arise. Disputes could occur between owners and the corporation concerning financial complications, maintenance and shared areas, bylaw enforcement, or components of your unit. While hopefully you don’t encounter any of these issues, being prepared is never a bad idea.
NON-DISCLOSURE AND MISREPRESENTATION
Before sellers complete the sale of their unit, they have a duty to disclose any material facts that could alter the value or attractiveness of the property. If you’re buying, be sure to be observant of any potential defects and ensure that your agent is going above and beyond to uncover any issues. If you think that something may be off or misrepresented, contact your lawyer for their opinion and their advice on how to proceed. Typically home inspections are not done for condos as systemic issues should be documented in the status certificate. If it’s an older building or very dated unit, you may however want to consider a home inspection.
BYLAW AND REGULATORY COMPLIANCE
As we’ve said in many instances thus far, review and understand your obligations with the corporation’s rules and bylaws. Each corporation will have its own regulations that each owner must comply with. If you don’t follow these rules or comply with the bylaws, you could face legal action, fines, or enforcement actions.
RESALE RESTRICTIONS AND APPROVALS
Do you have plans to change your condo or co-op? Are you thinking of leasing it to someone else or host a short term rental to create another source of income? Or do you want the option to transfer ownership? Know your restrictions on what you can do with your property and the processes to follow to avoid potential legal disputes.
SUMMARY
- Carefully review and complete your due diligence for all rules, regulations, insurance policies, levies, fees, corporation standing, reserve funds, and governing documents. Ensure that you have worked with your real estate lawyer and that you understand your obligations and responsibilities, any legal considerations and your rights as an owner.
- Complete a thorough inspection of the unit and hire an agent who will go the extra mile to uncover any issues. If the condition of the building or unit is very dated you may want to consider hiring a professional inspector.
- Connect with an experienced local real estate lawyer who knows the ins and outs of condo and co-op corporations. They’ll address all of the legal aspects involved and help protect your investment and your interests first.
- Before, during, and after purchase, communicate openly with your contacts at the corporation and keep a pulse on the activities of the condo board. Stay on good terms and be transparent about your concerns, if any. If disputes arise, seek legal advice.
While there are a lot of unique considerations to be aware of when buying a condo or co-op, thoroughly preparing yourself before signing off on your purchase will pay off in the end. Speak with your real estate agent and your lawyer to ensure that you have everything covered. They’ll help you navigate this complex transaction!
You’ll thank yourself later!
Thinking of moving to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
Photo by Frank Wang on Unsplash
