When buying a condo resale, most buyers focus on price, status certificates, and mortgage approval. But thereβs a quieter document that can have serious legal and financial consequences if itβs missing:
π The Section 98 Agreement.
If the unit youβre buying has any alterations beyond the original builder layout, a Section 98 Agreement can be the difference between a smooth ownership experience β and inheriting a costly problem.
Letβs break down why this agreement matters and what every Ontario condo buyer should know.
What Is a Section 98 Agreement?
Under Ontarioβs Condominium Act, a Section 98 Agreement is required when a unit owner makes alterations to common elements that are for their exclusive use.
Common examples include:
β’ Enclosing a balcony or terrace
β’ Installing new flooring that affects sound transmission
β’ Modifying plumbing, electrical, or HVAC systems
β’ Altering walls that impact common elements
β’ Installing exterior doors, windows, or structural features
Even though these changes may appear to be βinside the unitβ, many condos legally treat them as common elements.
A Section 98 Agreement:
β’ Approves the alteration
β’ Confirms it complies with condo rules
β’ Transfers ongoing responsibility for the alteration to the unit owner
β’ Is registered on title and binds future owners
Why This Matters in a Condo Resale Purchase
When you buy a condo resale, you inherit the legal position of the seller β including any problems they failed to fix.
If an alteration was done without a Section 98 Agreement, the condominium corporation can:
β Demand that the alteration be removed
β Require the owner to pay to restore the unit
β Refuse to insure damage related to the alteration
β Charge legal fees back to the owner
β Enforce compliance years after the work was done
And yes β that means you, not the seller.
Common βRed Flagβ Alterations Buyers Miss
Buyers often assume these are harmless upgrades:
β’ A βnice enclosed balconyβ
β’ Heated floors
β’ Soundproofing or new flooring
β’ Custom plumbing or electrical work
β’ Unit layout changes
But if the work touches common elements and thereβs no Section 98 Agreement, the condo corporation can still step in β even if the work was done years ago and approved βinformally.β
Verbal approvals and emails are not enough.
Why Status Certificates Donβt Always Save You
Many buyers think:
βIf itβs not flagged in the status certificate, Iβm safe.β
Not always.
Status certificates:
β’ May not fully describe unauthorized alterations
β’ Rely on information disclosed by the seller
β’ Donβt replace the need for proper registration on title
A missing Section 98 Agreement can easily slip through unless your lawyer specifically looks for it.
Who Is Responsible for Fixing the Problem?
If a Section 98 Agreement should exist but doesnβt, responsibility usually falls on:
β‘οΈ The current owner of the unit
That means buyers can be forced to:
β’ Negotiate a last-minute agreement with the condo corporation
β’ Pay engineering or legal costs
β’ Reverse renovations entirely
β’ Delay closing β or worse, inherit the risk after closing
How Buyers Can Protect Themselves
Before waiving conditions or closing on a condo resale, buyers should ensure:
β Any alterations are disclosed
β A registered Section 98 Agreement exists (where required)
β The agreement properly transfers obligations to the unit owner
β Maintenance, repair, and insurance responsibilities are clear
This review should be done by your real estate lawyer, not guessed at.
The Bottom Line
A Section 98 Agreement isnβt just a technicality β itβs a risk management tool.
When itβs missing, buyers can unknowingly take on:
β’ Legal exposure
β’ Repair obligations
β’ Enforcement actions from the condo corporation
β’ Unexpected costs long after closing
If youβre buying a condo resale in Ontario, confirming whether a Section 98 Agreement exists (or is needed) is just as important as reviewing the status certificate.
Call Capulli Law LLP – we know the ins and outs of condo purchasing and what to ask and look for. A simple call can save you in the long run.
Related Articles:
Buying Pre-Construction: Why Reviewing Condo Drawings Can Save You Tens of Thousands of Dollars
Tenants in Common or Joint Tenants? Which Ownership Structure is Right for You?
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