Condo owner on the hook for inaccurate ‘clean’ status certificate
Toronto Star
By Bob Aaron
26 October 2018
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.
A bedroom added without consent from the condominium’s board created an
inaccurate status certificate for a new owner.
Back in 2013, Dante Reino 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 Reino 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 Reino’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 Reino, 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.”
The court noted, “We agree that the condominium corporation is bound
vis-à-vis ... Mr. Reino by the clean certificate it provided to him
when he acquired the unit from his mother in 2013. That said, it does
not follow that the condominium corporation is thereafter estopped from
issuing anything but a ‘clean certificate’ in relation to a unit where
it has previously provided a clean certificate.”
If a condominium corporation becomes aware, after issuing a clean
certificate, of a circumstance that it is required to disclose, the
“new” information must be included the next time it issues a
certificate.
This does not change the fact that it will still be bound by its
earlier certificate, but to omit the new information, the court said,
would be misleading to a prospective purchaser.
The court added that Reino could always sue the condominium corporation
if it was negligent in issuing a clean status certificate to him.
He was ordered to pay $31,625 in court costs for the initial hearing
and the appeal.
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