Standard

A lawyer who represents a buyer of a condominium unit must obtain and review the estoppel certificate, declaration, by-laws and common element rules for the corporation.1

A lawyer who represents a buyer of a condominium unit must ensure that the following information has been provided to the client:

  • Floor plans for the unit showing the unit’s location and configuration2
  • Unit boundaries
  • Estoppel Certificate details
  • Information on the ‘super priority’ of a condominium corporation’s lien for unpaid common expenses and the amount of any assessment3
  • Information on the provisions for a Parking unit or space, if applicable4
  • Information on the provisions for a storage unit or space, if applicable5
  • Standard Unit Definition (applicable to condominiums registered after September 2011)
  • Insurance details (Corporation) and requirements (unit owner)
  • Shared common element services, if applicable (e.g. sewage treatment plant, wells)
  • Exclusive use details pertaining to the unit
  • Common element rules if provided6
  • Corporation amenities details

A lawyer who represents a buyer of a condominium unit must advise the client, in writing, as to any limitations on the lawyer’s documentation review7

In addition to the reviews and documentation noted above, a lawyer who represents a buyer of a condominium unit must carry out the following specific tasks, depending on the type of condominium unit involved:

New Construction & Phased Condominiums

A lawyer who represents the buyer of a new construction condominium unit must review the Declarant’s budget for first year of the Corporation with the client, and the Declarant’s responsibility for a holdback from the sale of the first unit in support of the accuracy of the Declarant’s budget.8

A lawyer who represents the buyer of a new construction condominium unit must consider the requirements outlined in the Condominium Regulations respecting requirements for Agreements of Purchase and Sale.9

A lawyer who represents the buyer of a condominium unit that is contained in a phased condominium development must ensure that the property reservedfor future phases is bound by a restrictive covenant that states that the affected property can only be used for a purpose that is materially similar to the purpose stated in the declaration and description.10

A lawyer who represents the buyer of a condominium unit that is contained in a phased condominium development must advise the client that a Declarant is not required to create a phase after the creation of the present phase.11

Mixed-use and Bare land Condominiums12

The Declarations and By-Laws for these types of condominiums typically contain provisions that restrict the size and future use of units. Bare land developments include restrictions on commercial and/or residential uses and the type of structures that may be built on the units. Shared services (water and waste water) are often involved in these corporations.

A lawyer who represents a buyer of a condominium unit in a mixed-use or bare-land condominium development must review with the client:
       a. any provisions that restrict the size and future use of units; and
       b. Any shared services provisions contained in the declaration.

Footnotes

  1. Estoppel Certificates may not exist [or be required under the Agreement of Purchase and Sale] for new construction condominiums. In that case, the lawyer who represents a buyer of a condominium unit must obtain and review the Corporation’s Master Insurance Policy details. For a review of the standard of care required by a lawyer, see for example Rice v. Condran, 2012 NSSC 95. See also Major v. Buchanon, 1975, 9 O.R. (2d) 491 and Sykes et al. v. Midland Bank Executor & Trustee Co., Ltd. Et al., [1969] 2 All E.R. 1238. See also Real Estate Standards Part III, Essential Elements in the Review of Title.
  2. Orr v. Metropolitan Toronto Condominium Corporation No. 1056, 2009 69104 (ON SC) as to importance of reviewing the unit’s floor plans with the client. See also Real Estate Standard 2.1: Legal Descriptions and Parcel Identification
  3. Condominium Act, RSNS 1989, c85: subsections 31(6) & (7)
  4. Parking arrangements vary with condominium corporations. It may be handled in any of the following ways: (a) the parking may be separately-conveyed units, (b) exclusive use space assigned to the unit in the corporation’s declaration or (c) by assignment by the Board of Directors. The lawyer must verify the particular parking arrangements with the client.
  5. Storage arrangements apply in the same way as parking, mutatis mutandis.
  6. The rules are not always provided to the buyer’s lawyer. Depending on the Corporation, they may be placed in the elevator or not circulated to owners. For a discussion of pet rules and restrictions, see Condominium Plan No. 762 1302 v. Stebbing, 2014 ABQB 487 (CanLII).
  7. See Real Estate Standard 1.5: Documentation of Advice and Instruction
  8. See Condominium Act, R.S.N.S. 1989, C.85, section 44B. The first operating budget is merely the declarant’s estimate of expenses, but the holdback requirements encourage the developer’s estimate to be more reliable / accurate.
  9. See Cassidy, Patrick I.; Nova Scotia Association of Realtors / Advising purchasers of new construction condominiums: agreement cautions in Condominium law and insurance 101, February 2009
  10. Condominium Act, RSNS 1989, c85, section 12AA.
  11. Condominium Regulations, Part J Phased Development Property, clause 76(1) (f).
  12. See Condominium Act, RSNS 1989, c85 Section 12B; Condominium Regulations subsections 54(2), & 70(d) & (e)

Additional Resources

  1. See Condominium materials on Service Nova Scotia’s web site
  2. See O’Brien Edmonds, Q.C., Erin / ‘Condominium conversions: existing and new condominiums step by step’ and ‘Condominiums revisited – achieving consistency under LRA’ Real Property Conference 2006: Crown interests and due diligence under LRA: The Sophomore Year, February 2006
  3. Lem, Jeffrey / The Dirt: Get used to unfolding those condominium plans, the Law Times October 17, 2011
  4. See Ontario Working Group on Lawyers and Real Estate Draft Master Chart of Items to Review with Buyers in a Standard Resale Condominium Purchase Transaction
  5. See LIANS’ Single Family Residential Real Estate Purchase Checklist, January 3, 2013, p. 11
  6. See O’Brien Edmonds, Q.C., Erin, Properly Conducting Condominium Transactions to Minimize Risks Unique to Atlantic Canada, Managing Risk and Exploiting Opportunities in Atlantic Canada Commercial Real Estate
  7. See Coffin, C.A. Mark / Condominiums and the Land Registration Act: PDCA’s, AFR’s and Advil (February 2005), in Real Property Conference 2005: from challenges to opportunities…navigating the real property paths.
  8. See McGrath, Mary Ann / Condominiums (November 2006)
  9. For a discussion if insurance issues and condominiums, see Canadian Condominium Institute Winder 2015 newsletter

Practice Notes

The overarching reason for lawyers to review the unit’s architectural plans with the client is to ensure that the unit to which title is to be taken is the unit that the client intends to purchase.

Under the Standard Realtor’s Agreement for re-sale condominiums, an estoppel certificate is provided by the Seller at the Seller’s expense.

Lawyers should review the balance in the Reserve Fund as noted in the Estoppel Certificate, and compare that balance to the amount listed in the Corporation’s financial statements. In new construction condominiums, the Agreement may provide that there is no estoppel certificate or that the certificate is the buyer’s responsibility (and expense). If there is no estoppel certificate under the agreement, the lawyer should at a minimum obtain insurance information for the condominium corporation.

When undertaking a refinance of an existing condominium, an estoppel certificate is often required by the lender. Most title insurance policies do not provide the same coverage as an estoppel certificate.

Approved by Council on April 24, 2015