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REAL ESTATE hot, hot, hot Condos are Legislators are trying to catch up with the issues churned up as condo development raced through a cycle of boom, bust, and boom over the past few years. BY KEV IN MARRON C ondominiums are hot again and so are condo laws. In spite of a reces- sion that took most of the air out of real estate bubbles, the frantic pace of condo development is picking up again in major Canadian cities. Real estate agents in Toronto and Vancouver are queuing to buy units in prestigious developments, and, once again, there are reports of street fights breaking out in the lineups. Meanwhile, legislators are trying to catch up with the new issues churned up as condo development raced through a cycle of boom, bust, and boom over the past few years. There is a new condo act in New Brunswick and new legislative amend- ments in British Columbia and Nova Scotia, while Alberta is beginning to re-examine its condo law and lawyers in Ontario are proposing changes. In British Columbia, where an earlier construction boom left a legacy of liti- gation over leaky condos, new amend- ments that have yet to be turned into regulations will, when enacted, require condo corporations, known as strata corporations, to file depreciation reports forecasting future costs of repairs. Patrick Williams, a partner at Clark Wilson LLP in Vancouver, observes that these costs could amount to as much as several mil- lion dollars in the case of a development requiring a new roof. What has yet to be specified in the regulations is how often such reports must be compiled and whether certain kinds of strata, such as duplexes, should be exempt. A further B.C. amendment will require strata corporations to do audits, but regu- lations have yet to be drawn up specifying how often they should be done and what kind of audit is required, says Williams, who maintains a full forensic audit would be prohibitively expensive. He notes strata corporations will be allowed to opt out of the requirements if three quarters of the unit owners vote for it. However, he pre- dicts most will decide to comply with the rules to protect future purchasers. Before the bubble burst, condos were all the rage in Alberta as builders in Edmonton and Calgary raced to keep up with the demand. But some of them cut corners and now many condo owners are in a rage over leaking roofs and rotting wood. There are also many prospective owners upset about delays in the comple- tion of buildings where they have already paid their deposits and made plans to move in. There are others who paid their deposits and signed contracts during the economic boom, but now want to get out of a deal that seems too expensive in leaner times. Many of the latter are looking for a way out by arguing that the developer has made changes that depart from the original prospectus and plans. With all this controversy, there have been calls for government action and the prov- ince is now responding by striking a committee of stakeholders to review the Condominium Property Act, which was last revised in 2001. Heather Bonnycastle, counsel at www. C ANADIAN Law ye rmag.com M ARCH 2010 23 PIERRE-PAUL PARISEAU