Recently, insurance companies have been in the news for increasing condominium deductibles and insurance premiums by huge amounts.
In a new twist, this story causes even more concern.
A seller of a strata unit in the Lower Mainland had a firm sale agreement in place, but shortly before the completion date last week, the buyer’s notary could not obtain insurance confirmation on the seller’s building. A condition of mortgage financing is invariably that the property be insured and that the bank be named as a loss payee on the insurance policy.
Accordingly, the buyer defaulted on the purchase, as his bank refused to fund the mortgage.
Unless, the matter can be resolved, the buyer may forfeit his deposit, as it was not a condition of the sale that the building be fully insured (although that is a legal requirement under the BC Strata Property Act).
In addition, the seller and everyone in his 150 unit strata complex are now uninsured for any type of peril!
According to the story, there are now a number of strata buildings in this predicament –which basically renders the units valueless, as they cannot be sold without insurance in place.
While I am no fan of government, this scenario definitely calls for the provincial government to step in to assist property owners in solving these insurance problems, or risk the collapse of the condo market in BC.
©Pazder Law Corporation (2020)
Questions? Call Kenneth Pazder or Melissa Valana (604-682-1509) at Pazder Law Corporation anytime for a free consultation.