Net or gross surface area: watch out for dwellings that are smaller than expected
The difference between the surface area of a unit as written in the sales contract and its actual surface area once the unit is built is a recurring problem in real estate. Net square footage, gross square footage - how do you sort it out?
When purchasing a single-family dwelling or an already-built condo, it's easy to evaluate if the space is sufficient or even to know the net square footage of all of the rooms because they've been measured by a surveyor and written into the certificate of location to ensure that they match what was promised by sales. The process is entirely different when purchasing a condo that has yet to be built; the difference between gross square footage and reality can be quite a shock to the uninitiated buyer.
Read: Buying a Condo Off-Plan: Mitigating the Risks
Philippe-Antoine Tremblay* learned this the hard way. A thirtysomething working in the banking industry, he purchased a 940 sq.ft condo in a tower project in the Quartier des spectacles with the intention of living there with his partner. In the promoter's sales office, Mr. Tremblay initially believed that the square footage advertised represented the unit's net footage and the unexperimented sales team remained vague when answering his questions. The couple saw construction progress with great enthusiasm only to have a nasty surprise when the project was completed two years later. "The actual square footage was only 846 sq.ft, which is an enormous difference when you've already made the decision to live in such a small space," says Mr. Tremblay.
There's no law monitoring square footage of condominiums for sale in Québec. The majority of promoters predict a 10% difference between gross and net square footage, which generally serves to cover the square footage taken up by interior and exterior walls. Others include common spaces (such as the corridor) as well as balconies in their calculations - all of which is perfectly legal. Staying vigilant is key. Philippe-Antoine Tremblay left the condo rather quickly due to lack of space. The whole adventure left a bitter taste in his mouth. "10% is enormous! In some condos, that's practically the size of a room!"
Net vs. gross
The difference between gross and net surface area is evaluated to be between 8 and 12%, if not slightly higher - such as, for example, in the case of an old stone building converted into coproperties that has particularly thick walls. Jason Lemire, real estate broker, explains: "If you're purchasing a 1500 sq.ft condo, you'll never get to enjoy 1500 sq.ft." According to the broker, a loss of surface area is inevitable, but the buyer must learn to read a plan and ask the right questions if they want to get a better idea of the eventual variation. "When you're paying a high per-square-foot price, you must make sure that the living spaces don't include the balcony, for example."
Article 1720 of the Quebec civil code stipulates that "The seller is bound to deliver the area, volume or quantity specified in the contract, whether the sale was made for a price based on measurements or for a flat price, unless it is obvious that the certain and determinate property was sold without regard to such area, volume or quantity." This loss of surface area constitutes a discrepancy at the sold area level, and could lead to the cancellation of a sale or lowering of the price. In case of a dispute between the parties, the court should be sensitive to certain factors, according to Sébastien Fiset, a lawyer specializing in real estate. "It needs to be demonstrated that the promoter was in the wrong, that they chose tnot to disclose certain essential elements to the buyer," he explains. "The buyer must also prove that the number of square feet was criteria essential to the purchase."
A sales contract that protects you
In order to no longer be deceived in such a way, Mr. Tremblay considers that he should have paid closer attention to the dozen-page contract he signed and on which the the surface area was indicated in meters and taken the time to convert these square meters into square feet in order to have a clearer idea of what it was he was buying. It's good to know that the possibility to have the final contract list the final net surface area - or to, at the very least, negotiating an acceptable variation percentage. "Many buyers can be led into error. Often, buyers and sellers aren't really speaking the same language, and not all sellers are real estate brokers with the necessary experience one has grown to expect. Yet a home is often the purchase of a lifetime. A bad purchase leads to unpleasant consequences. I've learned my lesson."
Read: The preliminary contract: 5 important questions
A special thanks to Jason Lemire, real estate broker at terrain.expert and Sébastien Fiset, lawyer at fisetlegal.com for their friendly collaboration. *The name was changed per the subject's request
Stock images: Shutterstock
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