Whenever I review a status certificate for a condominium buyer and it says that the unit contains Kitec plumbing, it will raise a red flag, especially when this was not disclosed to the buyer in advance. Here are five things to know about Kitec plumbing and how to prepare when buying or selling a condominium.
1. Is Kitec really a problem?
Kitec is a brand of plastic piping used in hot and cold water supplies to plumbing fixtures. It was made from 1995 to 2007. Usually it is blue on the cold water pipes and orange on the hot water pipes. Although it has been identified as perhaps weakening over time, resulting in leaks and water damages, there have actually been few failures over the years. Still, the perception is that it is a problem and needs to be addressed.
2. Will Kitec affect the value of a condominium unit?
I spoke to Alan Carson of Carson Dunlop and while you can never give an exact number, a good guideline is $5,000 for a one-bedroom unit, $10,000 for a two-bedroom unit and up to $15,000 for a three-bedroom unit to replace all the plumbing in the kitchen and bathrooms. In addition, you need to know if there is any Kitec in the common elements and whether that may also need replacing. In most cases, it may only be in bathrooms or kitchens in the party room or similar common areas of the building and should not cost that much to replace.
3. Should a seller and real estate agent disclose the existence of Kitec?
In my opinion this should always be disclosed, as it is a material fact, especially if it is on the status certificate. In addition, every buyer should disclose this to their lender, as it could impact a buyer’s ability to obtain a mortgage.
4. Does a condominium corporation have to disclose the existence of Kitec plumbing, especially if it has not yet failed?
This is a tough question as there is no case law on this point. However, in my opinion, a condominium corporation should be disclosing this to their insurer, as it may impact any coverage the building has for flooding. In order to protect your buyer, just include in your agreement that the seller represents and warrants that to the best of his knowledge, the unit does not contain any Kitec plumbing. Then the seller must tell the truth. Or remember to have the unit inspected. A home inspector should be able to tell this by looking under the sink in the kitchen or bathroom.
5. Is there any compensation available to people who have had to pay to repair Kitec plumbing?
If you have paid a plumber to remove Kitec plumbing, you have until January 2020 to register a claim at www.kitecsettlement.com. You will have to send them proof of the replaced pipe containing Kitec and copies of your plumbing invoices. However, based on what I have heard, there is not much left to be claimed from this fund for every affected unit, so be careful on relying on it for compensation.
Mark Weisleder is a senior partner, author and speaker at the law firm RealEstateLawyers.ca LLP. Contact him at mark@realestatelawyers.ca or toll free at 1-888-876-5529.
