In a Toronto townhouse development, 22 unit owners are living in condos registered to someone else — their real estate lawyers were not showing due diligence, writes Bob Aaron.
How is it that 22 condominium owners in a north Toronto development do not own the units they are living in?
This is the case at Liberty Walk Condominiums, an attractive stacked townhouse development at 760 Lawrence Ave. W., between Dufferin St. and the Allan Expressway, that was completed in March, 2003.
Unit owners last month received a letter from their property management saying the condo corporation has been made aware that the location of — and registered title to — a number of townhouses in the project do not match the physical units in which the owners are residing.
To date, the corporation, Toronto Standard Condominium Corporation No. 1513, is aware that 22 unit owners are living in townhouses that someone else in the complex has registered title to.
Back in 2014, two owners in the project discovered that they owned each other’s units and exchanged deeds with the help of their lawyers.
Now, in addition to the 22 affected townhouses, the same issue may affect other blocks of townhouses and some of the parking units may have been transferred to the incorrect unit owners.
In the 15 years since the creation of the condominium, many of these units have changed hands four, five and even six times – and at no point was the discrepancy discovered. That means that in more than 80 or 100 transactions, the purchasers were probably not shown the floor plans of the condominium to verify the location of their units.
How did this happen?
In my view, it is the obligation of the real estate lawyer — and perhaps even the real estate agent — to obtain a copy of the condominium plans and review them with the buyers to make sure they are buying the correct unit. Unfortunately, some real estate lawyers are not doing this due diligence.
Back in 2011, in a court case in which I testified as an expert witness, Justice Darla Wilson wrote in her decision: “I agree with the opinion expressed by Aaron that it is the lawyer’s responsibility when acting for a purchaser of a condominium unit to ensure that the client is getting title to what they believe they have transacted for. In order to confirm this, the client must be shown the plans to ensure that their unit is the one identified, in the correct location, the size, whether it has a terrace which might be an exclusive use common element, whether it is a single storey unit or multi-level.”
Copies of condominium plans can be purchased for $15. Despite this nominal cost, it appears that some real estate lawyers are not be spending the money or taking the time to ensure their clients are buying the correct dwelling, parking and locker units.
Meanwhile, the Liberty Walk condominium corporation has reviewed the problem with its lawyers. The property management’s letter to owners says that this is a matter that “unit owners’ real estate lawyers (should) review in any purchase or sale of condominium units.”
A notation of this issue has been added to future status certificates issued by the corporation.
Ultimately, the title insurers for the buyers will have to spend the tens of thousands of dollars necessary to exchange all 22 deeds, and discharge and re-register the mortgages on each unit.
Source: The Star