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What happens when an owner receives an incorrect status certificate issued by a condominium corporation?
That was the issue in a case before the Ontario Court of Appeal earlier this year.
Back in 2013, Mr. R. purchased a condo unit from his mother in a downtown highrise on Bay St. known as Metropolitan Toronto Condominium Corporation 723. He requested a status certificate and was issued a “clean” certificate by the condo corp. The prior owner purchased the unit in 2004 and was also issued a “clean” certificate — one that did not disclose problems.
When Mr. R. decided to sell the unit in 2016, he obtained a new status certificate that stated that the unit was in breach of the condominium declaration.
Before Mr. R’s purchase, a second bedroom was added to the unit and the kitchen was relocated without the required consent of MTCC 723’s board of directors.
As a result, the new certificate warned that MTCC 723 might take steps to remove the alteration and restore it to its original layout, with the costs being added to the common expenses for the unit.
The Condominium Act says that a status certificate’s information is binding to the corporation, as of the date it is given.
On an application by Mr R., the judge ruled that MTCC 723 was bound by its earlier “clean” certificates and had to issue a new certificate without the notation about the unauthorized renovations.
MTCC 723 appealed the judge’s ruling, and a three-judge panel of the Ontario Court of Appeal reversed the lower court’s decision earlier this year.
The Condominium Act, the Appeal Court wrote, “is, among other things, consumer-protection legislation. The purpose of a status certificate is obvious: it is to bring to the attention of a prospective purchaser or mortgagee matters which may be of concern to them when contemplating the purchase of a unit.”
Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at email@example.com, phone 416-364-9366 or fax 416-364-3818.