If you are contemplating to sell your condo, you can do it yourself, or engage a real estate professional. Though this is a choice you have, engaging an experienced Real Estate Lawyer is essential and always beneficial.
In a simple condo purchase, the seller contracts with a real estate agent to find buyers. Broker holds negotiations once the potential buyer is on board. On reaching an informal discussion, the buyer and seller enter into a formal purchase agreement.
The buyer now proceeds to get a financing commitment. A title search is done to ensure the legal title is accurate, valid and satisfies the need of the buyer and the lender. Now the actual transaction takes place as the property changes hands and the purchase price is transferred to the seller.
It is recommended to consult your Real Estate Lawyer to make sure all your legal obligations are met and protect your interests at every step of the condo sale. Let’s look at the factors which are involved when you are in the process of selling your condo.
Obligation to Disclose
All sellers have a legal obligation to disclose all latent material defects which are known to them in the condo and common elements like the exterior of the condo, community features or other areas like the land area of the property. You should be ideally disclosing all the defects which a buyer is unable to identify through a visual property inspection.
All the prospective and declared properties and special assessments should also be disclosed, irrespective of the fact whether they are part of the documents being handed over to the buyer. The fact that the condo complies with the municipal by-laws should also be included in the purchase and sale agreement.
Make sure all disclosures are done properly and timely to avoid any possibility of the buyer suing you in the future.
Sharing of Documents
Sellers are not under any obligation to hand over any documents to the buyer except the condominium documents. Providing all appropriate documents proactively to the buyer helps in closing the sale of the condo quickly.
In many purchase and sale agreements, the buyer may include clauses imposing legal obligation on sellers to provide specific documents. If the list of documents is ready for the condo sale transaction, it will help you and the buyer to be clear about what exactly is present and what is to be handed over to the buyer. Some of the vital documents include:
- Condo corporation’s latest reserve fund plan and report – sharing this with the buyer can help them to understand the good health and financial planning of the corporation
- Operating budget of the condo corporation – as any potential condo owner, the buyer would be interested in knowing how their contributions to the corporation are being spent; possible spending avenues include property management, amenities, maintenance, etc
- Minutes of Meeting of the Condo Corporation Board Meeting – Latest minutes of the condo corporation board meeting helps to understand any future operating budget deficits or surplus coming up and how it can be managed. Potential increases in condo fees can also be figured out
- A detailed guide of the Condo corporations’ rules and bylaws – many potential buyers will want to know about the exact clauses with respect to the amenities, parking and pets
- Physical survey and property report of the building, condo unit and the land area around it including the common area and its structures
Though many standard purchase agreements are always present, the exact purchase agreement used by the seller should be customized for the transaction. Few of the clauses which should be addressed in the transaction include:
- Determine if the property alterations and additions are done lawfully
- Determine the plans for property changes, their legal aspects and implications
- Reviewing the condo corporation rules and bylaws
- Determining the consequences of asbestos, termites or lead-based paint is found in the home inspection done by an architect or engineer
- Consequences if hazardous waste is found in the property inspection
- Legal implications in case the transaction is not closed; its impact on the down payment and how will it be held in escrow? Planning how to make the payment and whether the closing is suitably modified to reflect the upcoming financing
- If the buyer is going to obtain financing, then the legal clauses should reflect the same