Additional verifications made by the notary for a condo purchase

Version anglaise du texte paru plus tôt cette semaine

When one of my clients is purchasing a condo, there are numerous additional verifications I do in order to make sure he is not also purchasing bad surprises :

1. Is the Syndicate of co-ownership duly registered with the Registraire des entreprises ? If not, such a registration has to be done prior to the transaction, which may postpone the signing the deed of sale. Why proceed with this verification ? Firstly, because the Syndicate of co-ownership is obligated by law to register itself, failing which the Registraire des entreprises may dissolve the Syndicate of co-ownership (have its existence terminated). Secondly, because the main insurance policy in the case of a condominium must be issued under the name of the Syndicate of co-ownership, which is a separate entity in itself in the same way a company is. In case of a claim, the insurance company may refuse to indemnify the Syndicate of co-ownership if it can prove its legal existence.
2. Is the registration of the Syndicate of co-ownership with the Registraire des entreprises up to date? The Syndicate of co-ownership has the obligation to produce an annual declaration to ensure that the information contained in its registration are always accurate. Otherwise, penalties and interests will be charged by the Registraire des entreprises. The purchaser of a condo could then have to pay a couple tenths or hundredths dollars in additional fees following the transaction.
3. Is the registration of the Syndicate of co-ownership with the Registraire des entreprises made under the right name? Since 1994, the official name of the Syndicate of co-ownership is indicated in the Declaration of co-ownership. In the event where the name as registered would not match the name in the Declaration of co-ownership, the transaction should not be finalized before a correction is made, either by correcting the registration with the Registraire des entreprises to indicate the same name as the Declaration of co-ownership, or by proceeding with an amendment to the Declaration of co-ownership. Such an amendment requires the consent of a majority of the co-owners and has to be made by a notarial deed which will then have to be duly registered at the Land Registry.
4. Does the Declaration of co-ownership contain unusual clauses which may affect the buyer or cause him inconvenience? One may think for example of a buyer who would exercise his profession in his condo. Since the modifications of the by-laws contained in the Declaration of co-ownership are not published at the Land Registry, I also verify with the Syndicate of co-ownership if such modifications have been made.
5. Is the certificate of location showing the actual state and condition of the condo and does it reveal irregularities? You can consult previous article with regards to this matter.
6. Will the buyer have to pay additional amounts to the Syndicate of co-ownership ? To prevent this, I always request from the Syndicate of co-ownership a written confirmation prior to the transaction, including inter alia the following items :

• Condo fees paid by the vendor
• Contingency fund
• Annual budget (surplus or deficit)
• Court cases by or against the Syndicate of co-ownership
• Modifications to the by-laws subsequent to the Declaration of co-ownership
• Special assessments
• Insurance benefits
• Factors which may diminish the value of the co-ownership or increase the condo fees

Just imagine that you receive a bill from the Syndicate of co-ownership of a couple of hundredths or even thousandths of dollars just a few weeks after purchasing a condo for a special assessment voted around the same time. I always make sure by my verifications that such a situation won’t happen to my clients.

7. Is the appropriate insurance coverage in place? I have to obtain prior to the transaction 2 insurance binders : one under the name of the Syndicate of co-ownership and one under the name of the buyer. As a notary, I must me advise every buyer that the insurance held by the Syndicate of co-ownership is not sufficient even if it covers the building in which the condo is situated. Most of the improvments contained in the condo, even those attached to the building, are not covered by the insurance of the Syndicate of co-ownership. It would be the kitchen cabinets for example. Accordingly, the insurance of the buyer must to include 3 items : his personal belongings, his civil liability and the improvments.