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Real Estate

Ordering condo plans, tax certificates money well spent

Due diligence and about $25 could have saved a world of aggravation surrounding a sizeable townhouse title mix-up, Toronto real estate lawyer Daniel Bernstein tells AdvocateDaily.com.

Bernstein, a founding member of Weltman Bernstein, says cases like the one recently detailed in a Toronto Star column are rare, yet still preventable.

The article details how the owners of 22 townhouses at the same development suddenly learned they didn’t own the homes they were living in. The titles to their townhouses, completed in 2003, were registered to other owners.

It’s going to take considerable time and money to sort out the 22 deeds, then discharge and re-register the mortgages with the correct information, says the Star.

Bernstein says he’s not sure how the mix-up happened, but his best guess is the builder, or lawyers for the builder, made a mistake in numbering the units at the outset. It appears nobody checked that the addresses matched the units on the plans as the townhouses were purchased.

Compounding the problem, some units have been sold and purchased more than once.

“It’s going to be a real mess as lawyers go back to old owners to sort out ownership and deeds,” says Bernstein.

A title search normally makes the seller’s name, unit number, building level number and property identification number clear, he says.

“But in this case where some of the original information was wrong, the problem could have been discovered by comparing the location of the units on the condominium plans with their descriptions on the deeds," Bernstein says.

“If a client is purchasing a specific unit number that is described on the condominium plan but upon viewing the plan, the client questions why the unit is located in a different area of the floor plan, then you’ve got a problem," he says.

When completing a condominium real estate purchase, Bernstein says he always orders condominium plan and uses a highlighter to outline the dwelling, parking space and locker being purchased. He shows it to his client and asks for confirmation that this is indeed what the buyer saw and expects to be purchasing.

The site plan costs $15, along with another $10 or so to have it delivered to his office. “It’s one click on the computer and the next day, all the plans are sent to you,” he says.

Bernstein says he believes he’s in the minority in making a habit of ordering plans, although he’s never had a situation in his practice where the condo unit information wasn’t correct. He maintains it’s money well spent.

He says unlike many colleagues, he also requests a tax certificate to confirm there are no arrears and to provide his clients with the dates the next installments are due.

“Title insurance companies will say if you get a declaration from the seller that the taxes are paid in full, you don’t have to get a tax certificate,” Bernstein says of the document, which typically costs between $60 to $90 to order. “That may be true, but how are you going to tell your client when his taxes are due?”

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