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Archive for February, 2015

Five things to remember when doing a renovation

Recently I was asked to quote about a situation when a general contractor went bankrupt in the middle of a home renovation, and the homeowner was then liable to pay the sub-trades who were not paid, even though they had already paid a substantial amount of money to the general contractor. Here are five things to remember before you hire anyone to renovate your home:

1.    Check references  

Ask any contractor how long they have been in business and for a list of prior customers and then call each one to make sure that the work was completed on time and on budget. Go out and take a look at the work that was done so you can judge the workmanship yourself. You may also consider doing a credit check on the contractor as well. Make sure that the contractor is licensed and that they carry insurance should any accident occur causing injury to any worker or damage to your property or any neighbour’s property.

2.    Will the contractor be obtaining a building permit?

In most renovations, at least one permit is needed, whether electrical or building, so be extremely wary of anyone who tells you that they do not need any permits. By applying for and obtaining a proper permit in advance, you can be sure that the City will do a proper inspection when the work is completed to make sure that everything was built correctly. This will be important for any potential buyer if you are planning to sell after the renovations are complete. In my experience, title insurance companies will always question when purchase prices dramatically increase and if they hear that there was a renovation, they will immediately ask for proof of permits. If these are not produced, then it is unlikely that any future buyer would be insured if the work turned out to be faulty and the City later required major repairs.

3.    No cash deals

Contractors or owners may offer to do the work for cash in order to obtain a discount. Besides this being against the law, you will have no proof of payment if the work is poorly done and problems arise later. You will also likely not have a written contract that you can point to for assistance.

4.    Tie payments to work milestones

Do not pay more than 10% as a down payment, and then make sure that you do not pay out more than the work completed at different intervals. As explained to me by a construction project manager and home inspector, make sure that the contractor also provides you with proof at every stage that any sub-trade that is being used has also been paid for the work done.

5.    Make sure everything is clear and in writing

It goes without saying that you must have a written contract setting out clearly the work that is being done, everything that is to be included and the stages of payment. If you expect a certain type of handle for your cabinets, get it in writing so that there is no confusion. If there any appliances, include the brand name, model number and colour. The contractor should restore any damage to the driveway or landscaping as a result of the work completed. If you are getting a warranty, how long will it be for and what will it cover. If there are any warranties being supplied by sub-trades, these should also be transferred to you upon completion of the work. Consider an arbitration clause to solve any disputes, to avoid costly legal proceedings.

If you are properly prepared before you hire anyone to renovate your home, you can get it done with reduced stress for you and your family.

If you have any stories to share about the housing market or just need some advice, please contact me at

Check Status Certificate before selling your condominium

Most condominium resale agreements are conditional upon the buyer’s lawyer being satisfied with the contents of the condominium status certificate. If the contents of this certificate are different than what was represented to the buyer when they signed the original agreement, then the buyer may be able to cancel the deal.

Here’s why:

Buyer A agreed to buy a condominium resale unit from Seller B for the purchase price of $339,000.00. In the original agreement, it was represented that the condominium maintenance fees were $285.96 per month and that there were no special assessments contemplated against the unit.

When the buyer received the status certificate, it stated that the maintenance fees for the unit were $314.56 per month which was a 10% increase. There was also a one-time special assessment of $457.87.

Based on this information, the buyer refused to waive the condition and tried to cancel the agreement. The seller refused to return the buyer’s deposit of $16,000. The case went to trial. At trial, the buyer won the return of their deposit and the seller appealed.

The seller claimed that when he signed the contract, the maintenance fees were $285.96 and that he was not aware that they were going to be increased in the coming year. The special assessment was just a one-time problem that was being paid by the seller and there was nothing substantially wrong with the building. He thus argued that the buyer was not acting in good faith when they reviewed the status certificate with their lawyer.

In a decision dated February 2, 2015, a judge determined that the buyer did exercise their condition in good faith, based on the increased maintenance fees and the special assessment, even if it was one-time only.

In my experience, buyers and lenders are both typically concerned when there are special assessments levied against condominium unit owners. It could indicate mismanagement or poor planning by the board of directors.

In addition, a 10% increase in maintenance fees on a year over year basis is also a concern.
In order to protect yourself, whether buying or selling a re-sale condominium, here are five key things to remember:

1.     When selling, check your own condominium status certificate in advance, so that no errors are made on any listing or any agreement of purchase and sale. The cost is $100 and is well worth it.

2.     If you know that there will be an increased maintenance fee coming shortly, find out what it is and disclose this to the buyer before they sign any offer.

3.     If you know there are any special assessments coming, disclose them right away.

4.     When buying a re-sale condominium, make sure that your lender is also satisfied with the contents of your status certificate. Even if you are satisfied, if the lender or CMHC has concerns, your loan may not get approved.

5.     Buyers still must try and satisfy any condition in good faith. A condition is not an option to cancel your deal.

If you have any stories to share about the condominium market or just need some advice, please contact me at


Condominium Link is waiting for you

Condominium Link is my newsletter which I have been publishing for over 13 years. Previously I have mailed it directly but times have changed and now it seems more in keeping with environmental concerns to produce it electronically. If you would like to receive a copy directly to your mailbox, please email me at I promise you that with eleven pages relating directly to condo matters you will find it interesting and informative. You’ll find an article on the new condo market in 2015, statistics for many of our existing condo buildings for last year and comparisons from year to year.  Lots and lots more. It’s only an email away!