April 2025
One of the provisions in the Condo Act is that a condominium corporation must issue a status certificate, on request, to a prospective purchaser or mortgagee of a condo unit bringing to their attention matters that may affect their purchase or financing of a unit. This includes information on a corporation’s financial status, ongoing legal disputes, its rules and regulations.
A condominium corporation failing to adequately disclose to a prospective purchaser in a status certificate the existence of a likely special assessment or loan has costly consequences.
One individual purchased a unit after relying on a Status Certificate that stated “The Corporation has no knowledge of any circumstance that may result in an increase in the common expenses for the unit. Except: The Corporation’s fiscal year end is August 31, 2021. Therefore, monthly common element fees may be increased in accordance with the new budget which has yet to be determined.”
Shortly after purchase, the owner learned that the condominium corporation was seeking authorization from owners to borrow up to $2.5 million to undertake repairs. The new owner’s share of repair costs was estimated to be around $34,000. Payment was due up-front as part of a special assessment or as part of the loan. The corporation was aware of these repairs since at least 2017. It had obtained quotes, retained a consulting engineer, and the corporation’s auditor had flagged this project as needing a special assessment and/or loan. None of this had been disclosed in the status certificate.
The court agreed and decided that the corporation’s status certificate failed to fully disclose existence of this work and likelihood of a special assessment. It exempted the owner from the special assessment or loan for however long the unit is owned. The result of this is that all other owners were required to contribute a larger amount to pay for the necessary work.
Condo boards failing to recognize their duty to make full disclosure in a status certificate place a financial risk on all owners.
Click here to read Bruce v Waterloo North Condominium Corporation No. 26, 2023 ONSC 2995 .
