by Deryk
Norton, Board Member, Vancouver Island Strata Owners Association
Homebuyers in BC should beware of
that attractive condo or building lot located in a phased strata development.
Buyers in some phased developments have found that a promise made by a
developer is not necessarily a promise kept. Furthermore, buyers victimized by
a developer’s misrepresentation face prohibitive costs should they consider
taking legal action.
One example is the buyer in an early phase of a strata
development who pays a premium price for a lot with a golf course view based on
the developer’s sales material and disclosure statement. Later, when the
development is almost completed, the developer adds a new phase, not previously
disclosed, and eliminates the golf course view. A second example is the water
view condo apartment purchased in phase 1 based on sales material showing phase
2 as a low-rise building. Later, phase 2 is built as a high-rise building
eliminating the water view previously used to “sell” condos in phase 1. A third
example is the lot purchased in phase 1 where it is disclosed that strata
owners are responsible for the cost of street lighting. Later, when phase 2 is
developed it is then disclosed that owners in phases 1 and 2 are now to be
responsible for the cost of maintaining sidewalks and catch basins as well as
street lighting.
One may well ask about the role of
regulators when these things happen. In BC there are two regulators neither of
whom seems empowered to do anything about such situations. The government
“approving officer” who approves each phase of the strata plan is not required
to even notify owners when a new phase is being developed. Notification would
at least enable owners to object beforehand if the new phase would contravene
representations made to them by the developer. Even the Superintendent of Real
Estate, with whom the developer must file a disclosure statement for each
phase, has no duty to determine whether the developer’s disclosure statement contains
a misrepresentation.
This leaves buyers in a phased
strata plan entirely on their own when they fall victim to a developer’s
misrepresentation. They are subject to the hidden cost of a large legal bill,
the loss of a promised amenity or both.