Subscribe to receive updates from Deo Condominium Lawyers.
SUBSCRIBE NOW
When preparing status certificate disclosures, there is often a fine line between protecting a condominium corporation’s legal rights and compromising the potential sale of a unit for over-disclosure. This may be especially true when deciding whether to disclose an alteration made by an owner to the common elements prior to May 5, 2001, the date that the most recent condominium legislation came into effect. Prior to this date, there was no legal obligation for owners to enter into a Section 98 Agreement with the condominium corporation for common element alterations.
Is there a statutory requirement to disclose the existence of agreements that pre-date May 5, 2001? A recent decision issued by the Ontario Superior Court of Justice provided a clear answer to this question.
In Gonzales v York Condominium Corporation No 242, two owners sued the condominium corporation for the corporation’s failure to fully and plainly disclose that the state of the balconies would lead to special assessments and that the solarium appurtenant to their unit (an exclusive-use common element patio that was enclosed by a prior owner) was an alteration to the common elements. The owners also sued the condominium corporation for oppression under Section 135 of the Condominium Act, 1998 (“Act”).
In the status certificate that the owners relied on prior to purchasing their unit, the condominium corporation disclosed in paragraph 23 that the unit is not subject to any agreement under clause 98(1)(b) of the Act relating to additions, alterations or improvements to the common elements by the owner. Since the solarium was not disclosed as an alteration to the common elements in paragraph 23, or in any other paragraph in the status certificate, the owners believed that the solarium formed part of their unit.
However, the Court held that as the solarium was installed in 1986, there was no statutory requirement on the condominium corporation to disclose the existence of common element alterations pre-dating the effective date of the present condominium legislation, when there is no Section 98 Agreement in place. The Court held that the corporation accurately disclosed, in paragraph 23 of the status certificate, that the unit was not subject to any agreement under clause 98(1)(b) of the Act.
Further, the Court held that the owners are “not exempt from any special assessment, levy, loan, or obligation to contribute to the cost of maintaining, repairing, or replacing the solarium.” While the Court did not discuss the owners’ repair and maintenance obligations in detail, it appears that notwithstanding the lack of disclosure of a common element alteration, a purchaser may still be responsible for the costs of repairing and maintaining the alteration, albeit subject to any relevant provisions in the condominium corporation’s declaration.
While there may be no statutory requirement on condominium corporations to disclose the existence of common element alterations that pre-date May 5, 2001, when there is no Section 98 Agreement in place, condominium corporations may better protect their legal rights by including a general disclosure in paragraph 12 of the prescribed status certificate form confirming that the corporation has not inspected the unit or common elements for any unauthorized alterations by the present owner or past owners, that purchasers must satisfy themselves in this regard, and that if the corporation determines a violation, the corporation will enforce compliance at the (future) owner’s cost. Our team at Deo Condominium Lawyers are always available to provide the precise wording for this general status certificate disclosure regarding potential common element alterations.
Please note that the information provided in this article does not constitute legal advice and you should always consult your legal counsel for circumstance-specific legal advice.