Dear Condo Smarts: In 2001, our strata corporation commenced a lawsuit for leaky condo damages, in the amount of $3.5 million.
If the suit had been successful and the full amount had been awarded, our share would have been about $38,000. We sold our condo in January 2005, with the written agreement of the purchaser that, if the strata received any proceeds from the settlement, the money would be sent directly to us.
The purchaser then sold the condo eight months later in December. Now we have found out that the strata has received a settlement, but that the money was refunded to the current owners on title, cutting us out entirely.
Doesn't our agreement take precedence? Considering we paid the special assessments shouldn't we receive the refunds ?
Marney H.
Dear Marney: Many strata owners have experienced the same frustrations as you have with refunds and rebates. This has happened not only in leaky condo actions where the amounts were significant, but in insurance settlements, court action rebates and major construction, such as pipe replacement and roofing, where the projects were completed under budget.
When owners sell their strata lot, they are also discharging their ownership and entitlement to the interests of the strata corporation. To protect your interest, it will take a specialized legal agreement between the parties that may have limited conditions, time periods or circumstances. The agreement you entered into was between the first purchaser and yourself, and not carried over to the next purchaser.
Because such an agreement cannot be registered on title, there would likely be no way for the next purchaser to know of its existence, and the strata corporation is not a part of this agreement.
The owner is a person who is defined as the person registered on title, at the time of the refund. To determine if you have any remaining rights, I recommend that you collect the original resolutions for the court action and the agreements and consult a lawyer.
All owners wishing to sell their units during an ongoing court dispute or settlement process should talk to a lawyer to ensure the agreements protect their interests. But remember, once you sell your unit, you also discharge many of your rights.