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Verify condo units in your offer, deed

Once upon a time not very long ago, there was a court case involving the purchase of a condo townhouse with a third-floor attic conversion that did not comply with the condominium’s declaration.

Ontario’s Court of Appeal found in favour of the new owner, Kelly, who was not shown the condo plans by her lawyer and was not aware that the third-floor loft had been built into space she did not own.

The court awarded Kelly the difference between in value between a two-storey and three-storey unit. As well, an earlier ruling requiring her third floor be closed and restored to vacant attic space was set aside. The damages are payable jointly by the law firm and the condominium corporation.

Two lessons that emerge from this case and the recent experiences of major title insurers are:

Never purchase a new or resale condominium without comparing with your lawyer the numbers on the deed against the surveyor’s floor plans for the condominium levels. They don’t always match.

Registered numbers for parking and locker spaces can and do get mixed up. Always verify unit numbers and location at the time the offer is signed – and again at closing. Larry Ginsler, claims counsel at Stewart Title Guaranty Company in Toronto, expressed his shock about deeds and offers not being thoroughly checked: “I cannot believe how many claims we get related to wrong units being purchased (and) missed parking and/or locker units.” “Clearly”, he noted in an email “lawyers are not receiving status certificates and not obtaining the relevant condominium plans and reviewing them with their clients. It is very frustrating. In one case Stewart Title paid out $38,000 to rectify the purchase of the entirely wrong unit.

It is an easy assumption in a condominium purchase that unit 1201 is legally known as unit 1, level 12. But in many condo corporations the numbering on the door differs from the registered title. This is especially the case for parking and locker units where numbering is random, or where the units are not deeded, but their use os assigned in the condo declaration. It is not unusual, for example, to see a parking or locker space with a painted”99” to be shown on the registered title as Unit 53, Level A. It is also common for parking and locker spaces to be registered as exclusive-use common elements, without any separate title documents.

John Tracy, legal counsel at First Canadian Title, said: “In some instances the lawyers will not review, or properly review, the condo plan… with the client so there is no opportunity for the client to verify if the correct unit is being transferred.”

This is an extract from an item written by Toronto real estate lawyer Bob Aaron. He can be reached at bob@aaron.ca.

 

 

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