By Todd Lewys
After years of consultation between the province and REALTORS®, The Condominium Act was finally introduced on February 1, 2015.
The new Act was long overdue, says Ken Clark, president of WinnipegREALTORS®.
“The old Act hadn’t been changed in decades — it was really old, going back to the 1970s,” he says. “The new Act was driven by the provincial government’s desire to provide better consumer protection, as the old Act lacked teeth. It just didn’t offer adequate protection for condo buyers.”
With over 300 sections — 53 of them outlining a series of comprehensive new regulations — The Condominium Act was the real deal, containing major changes in how condominiums were to be bought, sold and operated.
Several key issues were addressed to provide more protection for buyers, notes Clark.
“The first issue that was addressed was the time frame that buyers were given to review condo documents. Under the old Act, buyers had a cooling off period of 48 hours to review documents. That just wasn’t enough time.”
At long last, buyers were given more time to pour over all the paperwork that accompanied the purchase of a condominium.
“Under the terms of the new Act, buyers were provided with a cooling off period of seven days rather than 48 hours,” Clark says. “Having only 48 hours to go over documents was nowhere near enough time. Still, our seven-day cooling off
period isn’t the longest in the country; other provinces give condo buyers 14 to 21 days. Still, the seven-day period was a change for the better.”
The second key issue that was addressed was disclosure, an area where consumer protection had been sorely lacking.
“With the old Act, consumer protection in this area was non-existent. When it came to advising buyers of any issues with a unit, vendors didn’t have to say anything, they just filled in a basic three-page disclosure form. As for new projects,
developers had no need to disclose anything.”
Thanks to the new Act, that story is much different today, says Clark.
“Vendors now have to fill out a six-page disclosure form that includes important details such as special assessments. Developers are also obligated to fill out a legally binding disclosure form that includes things like projected budgets, project costs, what condo fees cover, and the time frame that condo fees are valid for.”
In the same vein, condominium corporations (a.k.a. condo corps) must complete a 16-page disclosure form that covers things like parking, insurance, voting rights and percentage of condo ownership.
And while there was an adjustment period for buyers, sellers and REALTORS®, all parties have largely adjusted to the comprehensive new Act.
“Initially, some REALTORS® were reluctant to do condo transactions due to all the paperwork, while both vendors and buyers were a bit overwhelmed,” he says. “While there’s still a great volume of paper, buyers can now take their time, ask questions and come to grips with their purchase. No question, vendors must do more. The good news is there’s now tremendous strength on the buyer’s side.”
For the most part, transactions are going much more smoothly than they did even two years ago.
“Gone are the days when people threw up their hands at all the red tape,” says Clark. “Things have settled down and there’s a new norm where everyone realizes the process is a necessary one.”
What does that new norm look like?
“I’d say about 95 per cent of our members are now comfortable in carrying out condominium transactions, as they realize the Act is there to protect consumers. Most importantly, consumers are protected to a much larger degree than before.”
Clark — who’s specialized in selling condominiums over four decades — has a pair of parting tips for prospective condo buyers.
“First, I’d recommend that buyers deal with a condo specialist or an experienced agent to make sure the purchase process goes as smoothly as possible,” he says. “Second, ask if a condominium corporation is a member of the Canadian Condominium Institute. It’s important that they be a member.”