Make sure your lawyer confirms the unit you’re buying matches the building plans, writes Bob Aaron.
A near disaster in closing 173 units in a new Guelph, Ont. condominium project last week underscores that the most important documents in any condominium purchase are the floor plans.
Yet it seems that most buyers’ lawyers do not review them with their clients. Newmarket real estate lawyer Clifford Dresner described the incident in a post to a lawyer group on Facebook.
He was closing a purchase in a project called Gordon Square Condominiums, in Guelph, and while meeting with his client, the first thing he showed her were the plans for the condominium building.
“Lo and behold,” Dresner wrote, “the legal description of the residential unit provided by the builder’s lawyer did not match” the location of the suite which his client was buying.
Dresner contacted the builder’s lawyer and was told that a surveyor’s error was not noticed in their office and numerous incorrect legal descriptions were sent out to the buyers’ lawyers.
The builder’s staff worked hard and fast over the weekend, and managed to get everything straightened out for closing.
“Here’s the scary part,” says Dresner. “I was the first purchaser’s lawyer to notify them of the problem.”
The mistakes were caught in time and all buyers got deeds to their own units.
Sharing his advice with other real estate lawyers, Dresner advised: “Moral of the story is pretty obvious. Check the units being purchased with the purchasers against the plans … especially for builder purchases. It’s a lot easier and cheaper than undoing incorrect transfers and mortgages (afterwards).”
This type of mistake is not uncommon in the real estate field. Back in 2005, 124 out of 416 units in the then-new Radio City condominium building, on Jarvis St. in Toronto, were mislabelled.
When I showed my clients the plans at our signing meeting, they told me it was the wrong unit. I called the builder’s lawyer who had just discovered the error and was told that a team of a dozen people had worked around the clock to correct the mistakes.
After closing, the builder’s lawyer told me that only three lawyers out of 124 representing the affected purchasers had discovered the error and called to point it out.
The same thing happened in 2018 when it was discovered that the owners of 22 units in the Liberty Walk townhouse project, on Lawrence Ave. W., were living in units they didn’t own. It took the title insurance companies many months to straighten out the errors that dozens of lawyers had missed in the 15 years since the project had been completed.
In 2011, when the first sales of the Park Lake Residences condominium project, on Lake Shore Blvd W. in Toronto, were about to take place, the builder’s lawyers discovered that 269 units had the wrong numbers on the condominium plans and on the deeds that were about to be registered.
The lead lawyer on the project told me that only a few buyers’ lawyers caught the mistake.
The takeaway from these stories is that it is a critical part of a lawyer’s task to review the condo plans — including floor plans — with buyers on any new or resale purchase. If it’s not done, the lawyer hasn’t done a proper job.