Conditions

Real Estate

by Darrin DeRoches March 24 - 30, 2011

Waiting on a Waiver. In almost all real estate deals there are always conditions attached to an offer, the most common being “house inspection” and “financing clause”. Once these conditions are removed or waived than the deal is firm up and sale will go through. There may be other conditions in a sale but the “status certificate” is very common when buying a condo or townhouse.  The property manager or condo board you are buying into provides a status certificate. This board controls the monthly “common fees” and the general upkeep of the property. So if there is an issue with a lawsuit, money or upkeep – the status certificate will outline the past and present issues. This is usually looked over by the same lawyer who is closing the deal. Sounds simple enough, unless there is a problem.     This week our status certificate had a lawsuit listed by a roofing company against the condo corporation to the tune of $15,000 plus costs.  It may not seem like a big deal, but the buyers may decide they do not close the sale and be liable for costs in the future.  It would seem that the seller should be held responsible for the costs of a lawsuit since they owned the property when the problem arouse but the reality is the buyer will be on the hook if there is a problem. The roofing company is suing the ‘condo corporation’ not the seller and once you buy the property you are now part of the condo corporation and will be liable for your percentage. So if there are 100 units in the complex you are responsible for 1/100 of the costs if the condo corporation cannot cover the costs.     This lawsuit was frivolous and would come out to about fifteen dollars if it went all the way so the buyers were not spooked off and they closed the deal. The real problems in under funded or mismanaged condo corporation are happening to a condo development downtown where they have a plumbing issue and a underground parking problem that can run into the hundreds of thousands of dollars. With the size of the project and the required ‘upkeep’ the costs can run into the 30 to 40 thousands of dollars per unit. If people start to sue each other or the condo corporation – it may even be higher. As soon as the news hit a ton or units went up for sale, but no one is buying until the dust settles and the actual costs are determined.     So when you are waiting on a waiver and you think the status certificate is just some little hitch or paper in the process, make sure you do your homework before you waive your future away.   V              Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at mail@uniquerealty.ca.