While disclosures are important in single-family house real estate, condominium home transactions are more complex. Unlike a house, a condominium corporation could have an issue regarding the larger building structure, finances or politics. When I teach Realtors-to-be about condominium real estate, I tell them that it carries three times the complexity and liability of single-family house real estate. There are duties for sellers to reveal some things, yet buyers and their Realtors also need to anticipate what may not be required to be disclosed, but should be asked about anyway.
A specific caution is issued to those who would sell or buy a condominium home without a fully qualified condo Realtor. No, I can't help you after an issue arises, perhaps because a disclosure was not made by the seller or required by the buyer. Call your lawyer; but if you didn't retain me or one of my qualified colleagues at the start, leave us out of it. Now let's consider examples.
Imagine that you need to sell your condo home in a building where there have been some construction issues and special assessments levied to pay for repairs. One of these issues let water into your suite a year ago causing damage, which has also since been fixed. What you disclose, how and when you disclose it, and whether you compensate the buyer for possible future assessments may mean the difference between sale and no sale. It may also make a $10,000 or $50,000 difference in your sale price. And long after the buyer's possession it may mean that you either face a lawsuit or avoid one. In other words, maybe you'd best have an experienced and certified condo-specialist Realtor at your elbow while you consider these things.
Now imagine you're buying a condo home. Have all the documents been produced for your review, and who is helping you to evaluate them? How do you know whether all necessary disclosures have been made by the seller? What further possible issues might you want disclosed that are not required from the seller in common law? Here's an off-beat example. Perhaps you'd feel uncomfortable in a home where someone had died, although your reaction might also depend on how that death occurred. An issue like this can stigmatize a property, and might reduce its value, but is probably not actionable after the sale if it was not disclosed by a seller.
In a recent Calgary condo transaction an agreement was reached between the seller and the buyer, but before the buyer's possession the condo corporation told all owners to pay a special assessment to top up the building's reserve fund, with the deadline for payment AFTER the buyer's possession. Which of them should pay that expense? In a variation of this story, what if the seller were a member of the Board, knew the decision was imminent, but said nothing? Did he have a duty to disclose? Or was it the burden of the buyer to uncover the information? If the buyer paid but then sued the seller to recover the expense, which would likely win?
Talking about suing, that's another good reason to have a qualified Realtor handling your transaction. All Realtors in Canada carry errors and omissions insurance that in event of something like this might settle the matter by compensating the aggrieved party. Still, it's better to avoid having any messy issue come up at all through forethought and anticipation, best provided by an astute and condo-qualified Realtor.
Condo sellers need professional assessment of disclosure requirements, and may need terms in the sale contract to address issues that might otherwise stymie a sale, or return to haunt the seller after closing. Condo buyers need to know what disclosures they can expect and can demand from a seller, and how to respond to the answers. In all forms of housing, but particularly in condominium homes, disclosures are an important part of the selling and buying processes.
Calgary Condominium Directory
