RAYMOND
LECLAIR
Condominium purchase
transactions are, in general,
more complicated than traditional real estate closings. Lawyers know this, but it’s easy to
forget that most clients don’t.
Good retainers can help bridge
the gap.
Clients’ lack of familiarity with
legal issues related to condominiums poses a special communication burden for lawyers. A lawyer
closing this purchase must take
care to highlight certain details of
the transaction, and to clearly
delineate the respective responsibilities of client and lawyer.
Careful communication at the
beginning of the relationship is
essential to providing quality service. Well-informed clients have
more realistic expectations for
the transaction, understand the
basis for the legal fees charged,
and are less likely to be a source
of claims against lawyers.
(LawPRO’s claims experience
makes it clear that problems with
lawyer-client communication are
the number one source of claims;
for details, see the Fall 2011 issue
of LawPRO Magazine, available
at: www.practicepro.ca.)
Focusing client attention on
the complexities of a condomin-
ium transaction can be challen-
ging: The purchaser just wants a
key to the unit; the vendor wants
the cheque. Most clients believe
that grappling with the intrica-
cies of the transaction is exclu-
sively the lawyer’s job. Respon-
sible lawyers are careful to
disagree, and to communicate
the reasons why.
or for reviewing the condominium declaration, by-laws,
rules and regulations?
If the lawyer leaves the scrutiny of some of these details up to
the client, these “exclusions”
should be spelled out in the
retainer, not only for the lawyer’s
protection, but to encourage the
client to maintain an active role
in the transaction.
Developing a base retainer
that captures the scope of the
proposed service will go a long
way toward reducing omissions
and will make it more manage-
able to communicate well. But
finding a satisfactory retainer
precedent can be difficult. For
this reason, the Ontario Bar
Association’s real property sec-
tion recently chose to tackle the
issue of retainers. The Working
Group on Lawyers and Real
Estate has taken this focus a step
further by creating a subcom-
mittee to review the issue of
retainers in a condominium
practice (much like what was
done in preparation for the
development of its Ontario-wide
standard closing documents)
with a view to creating standardized documents specific to condominium practice.
The subcommittee welcomes
submissions of retainer samples,
information packages or comments from the real estate bar.
More information about the project is available at www.lawyer-sworkinggroup.com.
In the meantime, lawyers can
work to refine their own retainer
documents and approaches to
communications. For example,
they may want to take the time to
examine the scope of their own
service in condominium transactions and to create basic information sheets detailing the
respective responsibilities of the
lawyer and the client. A “to do”
list format — using a pair of lists
— can work well to demonstrate
to the client that each party has
his or her own distinct responsibilities in the transaction. This
information can be posted on the
firm’s website.
Suggesting that clients review
this material prior to the intake
appointment can be helpful for
encouraging questions, and can
provide a framework for shaping
the specific retainer.
The Working Group’s proposed
standardization of documents for
condominium practice is an
important initiative that has the
potential to benefit all Ontario
lawyers. Members of the real
estate bar are strongly encouraged
to share their expertise by contributing to the project. n
Raymond Leclair is a real estate
lawyer and acting vice-president of
public affairs at LawPRO. He has
been a member of the Working
Group on Lawyers and Real Estate
since 2003.
Act needs modernization
Condo
Continued From Page 10
the value of these assets has
already been factored into the
assessed value of each owner’s
unit, yet they are still assessed
and taxed separately.
Finally, residential condos
fall within the same property-
assessment classification as sin-
gle-family homes. This is not
fair because the corporation
provides many of the services
that the municipality should
provide, and yet condominiums
are still assessed and taxed at
the same level as single-family
homes which do receive these
services. Therefore, there
should be two property-assess-
ment classifications for condo-
miniums — one for high-rises
and the other for townhouses.
Reserve fund
The reserve fund is a man-
dated trust account for major
repairs and replacement of the
common elements and assets of
the corporation. However,
changes in the Condominium
Act are needed to ensure that
the reserve is adequately
funded. Two suggestions are:
increasing the 10 per cent min-
imum contribution for new cor-
porations to at least 20 per cent;
and giving clear guidance as to
what “adequate” or “sufficient”
funding means. With energy
consumption and the environ-
ment so important today, the
act must be modernized so that
it is easier for a board to retrofit
the building, relying on the
reserve fund.
Armand Conant is a partner
and head of the condominium
law group at Shibley Righton
LLP. He is past-president of the
Canadian Condominium Institute (Toronto) and chairman of
the joint committee that prepared the legislative brief.
We want to hear from you!
Email us at: comments@lawyersweekly.ca
Electronic keys keep
lawyers in touch
Keys
Continued From Page 11
If you tell clients you will be
available for new work that day,
you will end up an extra day in
the office and miss your ticket
to wherever.”
Of course, it is not possible to
do the work from afar. Experience
often serves as a red flag alerting
lawyers in small firms and solo
practices to the likelihood of
missed travel time down the road.
“I have twice missed flights
because the demands of a closing
went past the closing date by
almost a week,” Reilly said. In the
one case, the client was given a
heads-up that they would be
charged for rebooking if a flight
was missed.
