By Bob Aaron

In perhaps 80 to 100 transactions in the last 15 years, Toronto Realtors wound up listing and selling condominium units that were not owned by their seller clients. It now appears that 22 condominium owners in a north Toronto project do not own the units they are living in.

This is the case at Liberty Walk Condominiums, an attractive stacked townhouse development at 760 Lawrence Ave. W., between Dufferin and the Allen Expressway.  It was completed in March 2003.



Unit owners in March received a letter from their property management saying the condo corporation has been made aware that the location and registered title to several townhouses in the project do not match the physical units in which the owners are residing.

The affected project is Toronto Standard Condominium Corporation No. 1513. To date, the corporation is aware that 22 unit owners are living in townhouses that someone else in the complex owns.

The same issue may affect other blocks of townhouses and some of the parking units may have been transferred to the incorrect unit owners. The number of affected units is currently unknown.

This situation did not suddenly arise. In the 15 years since the creation of the condominium, many of these units have changed hands four, five and even six times – and at no point was the discrepancy discovered. That means that in more than 80 or 100 transactions, the listing agents probably did not verify the units being sold against copies of the registered condominium plans.

As well, purchasers were not shown the floor plans of the condominium to verify the location of the units being purchased.

How did this happen? In my view, it is the obligation of the real estate lawyer and perhaps even the real estate agent to obtain a copy of the condominium plans and review them with the buyers to make sure they are buying the correct unit. Unfortunately, some real estate lawyers clearly are not doing so.

But is it the obligation of the listing agent to verify the units being sold against the condominium plans to make sure that the sellers’ deed matches the unit in which they are living?

In Ontario, the legislated Code of Ethics states:

“A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services.”

Does that extend to a requirement to obtain and cross-check the location of the unit, parking and locker against the plans before the unit is listed?  Based on the Liberty Walk situation, there is a very compelling case to support such a requirement.

Some will argue that if the wrong unit is listed and sold without Realtor verification, it is ultimately the obligation of the buyers’ lawyer and not the Realtor to verify location of the units. While that is certainly true, the issue would come up long after the listing and sale process and the title search, and the deal would die just before the closing date.

If the issue was discovered at the time of listing, there would be ample time to resolve the problem long before the moving vans are being loaded.

Back in 2011, in a court case in which I was an expert witness, Justice Darla Wilson wrote in her decision, “I agree with the opinion expressed by Aaron that it is the lawyer’s responsibility when acting for a purchaser of a condominium unit to ensure that the client is getting title to what they believe they have transacted for. To confirm this, the client must be shown the plans to ensure that their unit is the one identified, in the correct location, the size, whether it has a terrace which might be an exclusive use common element, whether it is a single-storey unit or multi-level.”

That decision, and my opinion, were upheld by the Court of Appeal.

In Ontario, lawyers for purchasers can obtain copies of condominium plans to review with their clients for $15. Realtors would need access to the Teraview system to obtain the plans. Alternatively, they could get them from the lawyer for the sellers or by making a personal trip to the Land Registry Office.

I recognize that this would mark a sea change in the standard of practice for Realtors, but it is certainly an issue worth discussing.

Who is going to pay for correcting the titles?  The Liberty Walk condominium corporation has reviewed the problem with its lawyers and, despite the contents of hundreds of status certificates issued over the years, has denied any responsibility.

The property manager’s letter to unit owners says that this is a matter that “unit owners’ real estate lawyers (should) review in any purchase or sale of condominium units.”

A notation of this issue has been added to future status certificates issued by the corporation.

Ultimately, the title insurers for the buyers will have to spend the tens of thousands of dollars necessary to exchange all 22 deeds and discharge and re-register the mortgages on each unit.

5 COMMENTS

  1. Each sale required the production of a Status Certificate; This clearly spells out the description of the unit.

    If the sale, The Agreement of Purchase and sale matches the condo status certificate then the agent did their job correctly.

    David Pylyp
    HumberBay Shore

  2. Bob, Seems to me that when the lawyer for a buyer had the title searched, it should have shown the error immediately. Why all this furor about Realtors being responsible for the veracity of title? Isn’t that what the Title Search period is for???
    I am not saying that the Realtors should completely abandon the Sellers, but we are not lawyers. The sellers ask us to sell their property, not verify the legal status.

    Too many times Buyers, Sellers, lawyers and the courts look for a scapegoat with money when such problems arise. It’s the easy way out and we Realtors have no real representation to back us up.

    Charles Bayley-Hay

    • No need to be a lawyer…Most agents can read English unfortunately not all in Vancouver. The 1st act prior to listing a property should be to check title, verify ownership and check for building permits inspections and work orders

      • True. Even in KW I see agents listing properties that have not been registered and are consequently not owned by the “seller”. I do report them to the board but sometimes it’s a lonely ‘battle” since it seems nobody else cares…..lol

  3. There likely will be huge difficulty for the owners (not) to retain best counsel? Due to the overlapping corporations involved and the lawyer corporations involved, themselves all having corporate counsel at best firms already under general retainer.

    Before accepting these so-called owners as clients a conflict search would typically have to be done? And finding appropriate counsel could prove to be difficult and take years?

    Perhaps some involved in this matter would have died and or left the country for various reasons? (Or maybe never were here – offshore buyers). Or otherwise have simply moved on not knowing they had disposed of property not in fact having had good and clear title.

    Wouldn’t the mortgage company providers have some responsibility to have checked such? And those who prepared the status certificates? Some condos have extremely complicated identification at the best of times.

    And then there’s the ugly POTL’s (property on tied lands – sold and designated by builders as freehold’s). They have condo status certificates.

    Typically real estate lawyers do not review title insurance coverage details, at all, with buyers, it seems. Likewise status certificates. Only telling the buyer that there is title insurance, often not even noting with whom. And not to worry, he has reviewed the status certificate. Just part of the closing document papers package that arrives, often in the mail, sometimes many months after closing.

    Buyers don’t know what they don’t know and most never encounter any issues involving such. They might even think their agent took care of any such details. WHOOPS!

    Lawyers have been known to argue that an issue, once discovered, is covered by title insurance, when in fact it is not, the buyer discovered when alerting the title insurance carrier about a potential problem.

    Most REALTORS don’t know anything about title insurance at all, other than the lawyer takes care of it.

    And there are many issues that are clearly (or not so clearly) stated in the fine print of the title insurance documents, only discovered when the buyer tries to make a claim.

    Hoping title insurance might cover this to the tune of perhaps mega-millions might be a stretch. And if found not wanting, who then is responsible. It will be interesting to see how this unravels over the next dozen or so years. But often such topics noted in REM articles seem to just disappear after the fact, with no author follow-up or further discussion.

    And now that this location has been identified and unwrapped, what is the chance there are other condo corps finding themselves in the same or similar situations.

    I certainly am no condo expert, but it seems always ugly in the details. There are good agents who specialize in condos and never would have considered such a debacle, yet will find themselves being named and requiring counsel at their own expense unless their office affiliate contract says their brokerage covers such expenses. Agents ought to be having this conversation with their brokers?

    This REM article serves as a head’s up to any agent involved in condo sales, who might consider needing having their own counsel under permanent retainer? The agent could be at the mercy of their buyer’s independent counsel, who certainly doesn’t represent the agent, and who would be expected to name the agent and agent corp in any claims. A series of interlocking claims in such a finding as this will no doubt be found to write new law?

    What is to say this finding only applies to condo’s? Builders might be found not to have built the designated approved plans on a specifically identified lot, and inappropriate registration took place? Because checking “that” was never part of any procedural apparatus perhaps? (even in freehold, builder sales or resale)

    Carolyne L 🍁

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