While thousands of condominiums are sold yearly in Calgary alone, not every story has a happy ending.

In the very worst cases, purchasers have lost substantial deposits to unscrupulous individuals, who may or may not have ever intended to build the home or condominium they sold. In other cases because of unforeseen circumstances, the builders are not able to complete the condominium project. While these instances are very rare, they do unfortunately occur.  In other more common cases, there may be unpaid condominium fees owing on their home, for a period prior to their purchase, for which they, as the new owners are responsible for paying. Still, in other instances, while their new condominium exceeds their expectations there are reserve fund deficits that must be made up by large and unexpected special assessments.

The good news is there is a great deal of consumer protection in the home buying process. If you follow a few guidelines and suggestions, you can ensure that you have the full benefit of these safeguards so that you can enjoy all the benefits of ownership.

Remember that you can not reduce risk completely, however you may reduce the risk you can and understand what you can’t. The first of this two-part article will deal with those things you can do, to reduce your risk before deciding on a condominium. The second part, published in the next issue of this magazine, details how you can minimize risk when as you are making a decision and your deal is pending.

1) Understand the Basics of Real Estate – Learn about buying property, whether it be purchased as your home or investment property. The more you know the better you will understand the process of buying a condominium. Many real estate professionals offer free seminars on home purchases, and there are several free publications to help guide you through the process.  Read articles in newspapers and free periodicals.  Discuss experiences with your friends and family who have made purchases recently. Start by educating yourself, right away.

2) Hire professionals. – When making such a large investment  - hire professionals. If the condominium you are purchasing is a resale, use a licensed real estate professional or seek the guidance and advice of a knowledgeable real estate lawyer. Not only are they able to rely on them you to negotiate the purchase and to guide you through the process, but their professional associations have errors and omissions insurance. In the unlikely event, there is a problem with the sale, you may be able to seek a remedy through their associations, such as the Real Estate Council of Alberta or claim against an errors and omissions insurance program. Be mindful of a dual agency agreement, where the realtor is representing both parties, and carefully read the disclosure agreement, they will ask you to sign.
Many developers will offer you a discount on legal fees, if you use their lawyer. If so, check to see which party they will represent if there is a problem with the sale. If they represent the seller, you can reduce your risk by paying a little more and getting your own lawyer, which will represent your interests in the transaction.

3) Communicate with the professionals you hired– Hiring professionals, while a good start, is not enough. Ask them questions, tell them your concerns. Use their knowledge and experience to help you understand the “ins” and “outs” of your purchase. Do not assume your expert help knows all the details about the purchase, share important facts or issues with them, so they know to pay even closer attention to these items. If you don’t understand something, ask them.

4) Check what you can. – Often times, when you ask a question, perhaps of the salesperson, or builder, the answers are wrong. This is not intentional, but often is the result of inexperience or a simple misunderstanding. If you can check something yourself, do so. Check the purchase agreement, the finishing specifications or the details of the warranty program. It there is an apparent contradiction, ask for clarification.  Read the small print.

5) Read the small print. You are making a very substantial investment, make sure you read everything, including the small print. You will be required to sign documents, such as offer to purchase. If you do not understand these documents, you should not sign them. If you are uncertain about what the documents mean, this is why you hired professionals – so they can help you understand what you are committing to. The small print often includes clauses that define responsibilities for the parties to the agreement. Understand your responsibility, if you do not do something required of you, you may lose valuable rights, such as rights to warranty protection.

Continued next issue.