The United States has aggressively sought to address building violations by making it harder to sell properties in affected buildings. After the fatal June 2021 collapse of the Champlain Towers South condo complex in Surfside, Florida, “temporary” changes to loan approvals were made by Fannie Mae and Freddie Mac in the United States that could delay closings of condo sales and result in higher mortgage rates.
Buildings with at least five units and “significant deferred maintenance’’ or violations “are not eligible for purchase,’’ according Fannie Mae. Properties not compliant with a state-mandated inspection or certification are not eligible for purchase by the agency. Freddie Mac and Fannie Mae own about half of the mortgages in the United States.
In buildings with safety violations, sellers of units must provide lenders with proof that violations have been corrected and inspected.
Should banks and other financial lenders embrace a similar approach in Canada, communities are likely to more quickly address building deficiencies rather than reach a level of financial distress they may be unable to recover from.
While condominium managers and condo directors are not expected to be aware of every building and safety code, they can be held accountable if aware of a problem and fail to report or act on it.
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