Re: http://realtytimes.com/rtpages/20030828_leaky.htm.
The above Realty Times article refers to this research report by Nancy Bain: Re-Sale of Leaky Condos: Did the Buyer Know?
Here is a letter (with specific references removed) I wrote to a Realtor in 2006:
Hello Realtor, You mentioned to me that you had sold units in this building before, and that this was a "good" building. I am concerned that this may not necessarily be a reasonable representation. This past weekend I, along with my clients, reviewed the minutes that you provided. It appears to me from reading these minutes that:
1. this is by definition a leaky condo, according to the opinion of professional engineers who provided a proposal;
2. the owners have chosen to do a partial (targeted) fix vs. the recommended complete rainscreen replacement;
3. a risk exists for future failure in areas not targeted;
4. structural changes were completed; and,
5. no legal advice or opinion was ever received.
The owners decision to do a partial fix may have caused: the professional engineers to quit; the Homeowner Protection Office not to participate; and, future high ratio mortgages to be unavailable for this property if proper disclosure is made to the mortgage lender.
On the Property Disclosure Statement dated 2006, that you provided, your client represented:
V. Are you aware of any special assessment(s) voted on or proposed? NO
2.B. Are you aware of any additions or alterations made without a required permit? NO
The disclosure regarding the special assessment (V), doesn't appear to have a statute of limitations regarding commencement or period of time. When you sold this property to the present owner just over one year ago, you and or they would or should have known that there had been an engineering report completed by professional engineers in 2004 requiring a special assessment. I would therefore question the response provided on the disclosure statement.
Regarding the response for (2.B.), the repairs described by the company doing the partial fix includes references to structural work. I believe that a permit is required for any structural work. I have attended City Hall on behalf of my clients and discovered that no building permits have been issued for this building since its original construction. Without having made this enquiry, it is understandable that the disclosure statement might be completed quite innocently. I am surprised that the strata management wouldn't have requested a file copy of a permit.
Had a complete fix been done using a professional engineer, a certificate of completion would have been issued. I believe that you are therefore unable to fulfill this requirement of the subject conditions on the offer dated 2006.
I also bring this information to your attention because I am unsure how comfortable you might be in the future representing this as a "good" building.
John
In another situation close to home in the Tri-Cities, a well known Metro Vancouver management company arranged for a professional engineers assessment report which concluded the entire building envelope would need replacing. This was raised at the SGM of a ‘55+' building in 2004. I became aware of this as a potential buyer in 2005 while reading the minutes, and subsequently, the executive summary of the engineers report.
To the best of my knowledge this remediation has not been done to date. The Property Disclosure Statement (PDS) questions are worded in the present tense "Are you aware...", so a negative answer does not mean that there has not been a problem in the past or that a past problem will not recur. Furthermore the recommended two years of minutes would be insufficient in uncovering this for the buyer (or the Realtor).
Despite paying for a professional opinion and being advised by qualified engineers to replace building envelopes, many strata corporations have chosen not to follow that advice, often doing something less. Experience now tells us that fixes referred to as, "targeted", "partial", "band-aid", "spray-on", "Volkswagen", or, "cheap", take your pick, are rarely adequate, and even the mortgage providers consider them "high risk".
How can a buyer possibly determine the risk of future reoccurrence in the other areas not remediated? Only if an issue is discovered during an inspection does the buyer still have options.
There is an opportunity to protect buyers with an expanded role to be played by strata management companies. In my opinion, until a certificate of completion for the scope of work originally prescribed by a professional engineer has been filed at the municipality, the Form B should be completed by the management company to reflect that work prescribed remains outstanding.
This also raises two interesting questions for me: What obligates (via the SPA or reg) the strata corporation to fulfill the prescribed repairs, and what is the role and responsibility of the strata management company in advising the strata corporation of their obligations?
Without specialized knowledge and understanding the buyer is left to ask the right questions and to ask for the right documents to discover what was done and what wasn't. Before considering doing these assessments without professional help, buyers must be true to themselves on their personal limitations, constraints, and ability to manage the risks.
Let the buyer beware prevails.
Take care,
John in Port Moody, BC
Real Estate Evolved
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