Wednesday, September 21, 2011

Status certificates essential when buying a condo

You're all excited because you've just brought a condo in the city that you love. Whether it's your first place or an investment property, when buying a condominium there are some special things to always keep in mind amidst all the excitement.

An important thing to keep in mind when buying a condo, especially a resale condo, is that you're not just buying the condo unit itself - you're also buying a share of the entire building, including all its assets and liabilities. As such, the financial and legal health of the condo corporation is very important and should be taken into account when deciding whether to buy that condo you just saw or not.

A client found out first hand when she brought a condo this spring. The condo was in dream location downtown, within easy walking distance to Queen's Park. It wasn't a new condo, but the building looked well maintained, and the unit itself had a spectacular view of the downtown skyline. She made an offer for the condo, and to her delight, it was accepted. She just brought her dream home!

Amidst the euphoria of buying a new place, she also did something very smart. She had me review the Agreement of Purchase and Sale before she put in the offer, and I advised her that she should put in a condition for her lawyer to review the condo's status certificate and to be satisfied with it if the deal is to go through.

A status certificate is a report on the financial and legal health of the condominium corporation. Anyone can request a status certificate from the condo management office as long as they pay a $100 fee. A status certificate can reveal many things, for example:

  • upcoming major projects, for example installing new elevators or new exterior windows, which may result in an increase in management fees
  • pending legal action against the condo corporation, which may result in the condo corporation requiring management fee increases in order to pay a legal settlement
  • unpaid condo management fees by the seller
  • potential problems with non-standard improvements made to the condo by the seller

As this client found out, having me review the status certificate for a condo paid off. She found out that the condo corporation was planning to undertake a major rooftop renovation, which would result in an increase in her condo management fees of about $100 a month. With this information in hand, she was able to renegotiate a lower purchase price for the condo.

By having me review the status certificate to spot potential problems, she avoided any surprises when she moved into her dream home.

Thursday, September 08, 2011

BC court confirms website terms of use enforceable as legal contracts

In Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, the BC Court held that Rogers infringed Century 21's copyright and terms of use by scraping Century 21's real estate listings from its website and incorporating the listings into the real estate search engine Zoocasa.

Starting in 2008, Zoocasa copied photos, property listings, and pricing from Century 21's website and provided hyperlinks that directed a user to specific pages of the Century 21 Website that contained the property listings.  Despite letters from Century 21, Zoocasa chose not to stop scraping until early 2010, nearly 2 and a half years after Century 21 first advised Zoocasa they did not consent to Zoocasa's activities and advised them of the Century 21 Terms of Use and Zoocasa's breach of these terms.

The court considered the enforceability of website terms of use as a contract, and explored various analogous software licences and contracts created over the Internet such as shrink wrap agreements, click wrap agreements, and browse wrap agreements.  The court confirms that website terms of use are enforceable as legal contracts at para 119:

The act of browsing past the initial page of the website or searching the site is conduct indicating agreement with the Terms of Use if those terms are provided with sufficient notice, are available for review prior to acceptance, and clearly state that proceeding further is acceptance of the terms.

In addition, the court confirms that liability is not avoided by automating the website scraping as the scraping program must initially be set up manually.