Surrey tower follow-up: disclosure and defects

By Paul Cowhig, Advisor, Professional Standards

In my last column, I talked about the engineer who was disciplined because he certified that a building in Surrey met specific building code requirements related to seismic and wind standards, when it did not meet the BC Building Code standards. Now, we know which building that was.

The engineer was disciplined because he cherry picked requirements between the National Building Code and the BC Building Code, depending on which were the least stringent, but we do not yet know if this will result in a material latent defect.

On May 13, the Board issued a letter to the City of Surrey urging it to disclose the identity of the building in question. Then on May 22, we learned from the City that the Engineers and Geoscientists association updated their disciplinary notice to include the address. The building is called Ultra, located at 13325 102a Avenue in Surrey. Through our MLS®, we processed 213 sales in that building since 2013, and there are currently 10 active listings.

This is where things get tricky. We don’t want to make more of this than it is, but we don’t want to minimize it either.

We know that this building does not meet current BC Building Code standards, however the reality is that many buildings of all kinds that exist in the Lower Mainland do not meet current building code standards which does not by itself mean that there is a material latent defect.

The Engineers and Geoscientists association and the City of Surrey have said nothing to indicate that the building has a material latent defect or that it is unsafe. As far as we know now, there is nothing material impeding the sale of units in the building.

Certainly, this building now has a stigma and the strata corporation representing the owners will have a lot of work on their hands to establish that their building is as safe and valuable as it was before the story about the disciplined engineer made news headlines.

So, what do you do when dealing with your clients in this matter? As always, it is critical to remember who you are working for and to work in your client’s best interest.

In particular, if you are working with a buyer client, it is your duty to disclose even the potential for material latent defects. They can then decide how critical this issue is for them, and if important to them, you would do your due diligence and learn whatever more you can. For this building you will want to rely on at least two sources of information: the City of Surrey and the strata corporation.

If you’re working with the seller, you are working in their best interest which is sometimes 180 degrees opposite to the buyer’s interest. You would recommend your seller disclose actual or potential material latent defects, since this protects them in the long term in the event that something pops up down the road. If they do not want to disclose, you either obey their instructions or walk away. And, if asked directly about this issue by another REALTOR®, you cannot lie.

In a broader context, you cannot make any unfounded derogatory comments publicly or otherwise that are not supported by subject matter professionals. As a REALTOR®, you are considered a professional and an expert and what you say could be used against you.

This will get a lot of airtime in the real estate community over the next while, so be careful with your words.