Resale Process and Compliance Responsibilities

The Role of the Condominium Corporation in Resale Transactions

When a condominium unit is resold, the condominium corporation must provide certain disclosures to potential buyers. These disclosures are often delivered by the condominium management brokerage and ensure transparency regarding the corporation’s financial health and any outstanding obligations tied to the unit.

Required Disclosure Documents for Resale Transactions

Under the Condominium Property Act, condominium corporations are legally required to provide the following documents upon request:

1. The Corporation’s Bylaws – The most recent version of the condominium corporation’s bylaws.

   
   

2. The Standard Insurable Unit Description (SIUD) – A copy of the SIUD, which outlines the standard insurable components of the units.

   
   

3. The Corporation’s Rules – Any rules that have been adopted by the corporation under the bylaws.

   
   

4. The Current Budget – The condominium corporation’s most recent annual budget.

   
   

5. Financial Statements – The latest financial statements of the corporation, including the balance sheet and income statement.

   
   

6. Reserve Fund Study & Plan – The most up-to-date reserve fund study and the corresponding reserve fund plan.

   
   

7. Professional Reports – The copies of any professional reports related to the condominium, which may include:

   
   

   • Engineering Reports

     • Structural assessments

     • Building envelope reports

     • Mechanical or electrical system evaluations

       
       

   • Legal Opinions

     • Opinions from legal counsel on condominium governance

     • Legal interpretations of bylaws or condominium regulations

       
       

   • Financial or Audit Reports

     • Third-party audits of financial statements

     • Reports analyzing the financial health of the condominium

       
       

8. The Insurance Certificate – A copy of the corporation’s current insurance certificate.

   
   

9. The Minutes of General Meetings – Copies of the minutes from any annual general meetings (AGMs) or special general meetings (SGMs).

   
   

10. The Minutes of Board Meetings – Copies of the minutes from board meetings.

    
    

11. The Corporation’s Lease or Exclusive Use Agreements – Any leases, licenses, or exclusive use agreements that affect common property.

    
    

12. A Statement of Unit Owner Contributions – A statement showing

    any outstanding condominium contributions, levies, or special assessments owed for the specific unit in question.

    
    

13. A Statement Regarding Any Legal Action – Any ongoing legal actions involving the condominium corporation.

    
    

14. A Statement Regarding Any Judgments Against the Corporation

    • If there is a court judgment against the condominium corporation, it must be disclosed.

      
      

15. A Statement Regarding Any Written Demands Exceeding $5,000

    • Any written demand for payment exceeding $5,000 that the corporation has received must be disclosed.

    • This could include legal claims, contractor invoices, financial disputes, or outstanding debts that are formally requested in writing.

      
      

16. Disclosures   – condominium corporations are legally required to disclose information regarding reserve fund balance, structural deficiencies, post-tensioned cables, and loans.

    
    

17. Corporation Agreements  – Copies of agreements it has entered into that affect the condominium, which may include:

    • Recreational Agreements

    • Lease or Exclusive Use Agreements

    • Management Agreement

      
      

The condominium corporation must provide these documents within 10 days of a request.

The Role of Condominium Managers in Resale Compliance

Condominium managers play a critical role in ensuring that resale transactions comply with legal requirements by:

• Coordinating the preparation of disclosure documents – Ensuring timely and accurate delivery of required information.

• Communicating with mortgagees – Some financial institutions require estoppel certificates before approving a mortgage on a condominium unit.

• Confirming outstanding financial obligations – Ensuring all unpaid contributions or assessments tied to a unit are disclosed.

• Ensuring compliance with CPA disclosure timelines – Avoiding potential legal issues by meeting deadlines for document requests.

Common Issues in Resale Transactions

Failure to comply with resale disclosure obligations can lead to legal and financial risks for both condominium corporations and unit sellers.

Common issues include:

• Failure to provide disclosure documents on time – Buyers may back out of a purchase if the required documents are not provided within 10 days.

• Omitting critical financial information – Not disclosing pending special assessments or budget shortfalls can mislead buyers.

• Errors in disclosure statements – Incorrect details can result in legal disputes between buyers, sellers, and condominium corporations.