Effective Feb 1/15, the new Condo Act in Manitoba has some significant changes for condo purchasers, but have the changes gone too far? Time will tell if the soft condo market in Winnipeg will soften even more.
Here are some of the key changes outlined in the act:
1) New Disclosure Requirements – new 14 page disclosure statement from the seller
– new disclosure statement from the condo corporation
2) Budget and Financial Projections must be provided for existing condos, New condo’s must provide financial projections (after 12 month period is completed, the developer pays the shortfall thus encouraging them to be as accurate as possible in these projections
3) Reserve Fund Studies are required. They must be obtained by Feb 1, 2018 for all condo corporations. There are certain requirements for the qualifications of the individual preparing the reserve fund study. The reserve fund study completes projections for the next 30 years and will have an ideal reserve fund balance for each year.
4) 7 day cooling off period for potential buyers to review all documents provided. The clock starts from the time the potential buyer receives the last piece of paperwork. This 7 day cooling off period also starts again if there are any material changes. In the end it is the responsibility of the seller to disclose these material changes (i.e. increase in condo fees, etc.). This is where the legal community will do more work to sort out what a material change is and isn’t. During the cooling off period(s), the buyer has the right to cancel the offer.
There are several other changes to the condo act, but these were the larger changes in my opinion. Anyone purchasing a condo should expect to pay a higher legal fee given the extra work in the condo buying process. Protection for consumers was due but be ready for a little more due diligence for potential buyers, realtors, lenders and lawyers.