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CONDOMINIUMS - Condominium corporation - Obligations in relation to purchase and sale of unit - Status certificate

Thursday, March 29, 2018 @ 8:35 AM  

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Appeal by a Condominium Corporation from an order that it was estopped from mentioning certain matters in a status certificate. The respondent purchased a condominium unit from his mother and requested a status certificate from the appellant. The respondent's mother had owned the unit from 2004 onward and had not carried out any alterations. In 2013, the appellant issued a clean certificate in respect of the respondent's unit. In 2016, the respondent sought to sell the unit and requested a new status certificate in order to market the sale. The 2016 certificate stated that alterations relocating the kitchen and adding a second bedroom were undertaken without the Board's consent, with possible remedial action forthcoming at the owner's expense. The respondent and his mother gave evidence that the configuration of the unit was unchanged during their occupancy. The application judge concluded that the appellant was bound by its prior clean and clear status certificates issued in 2004 and 2013, and was therefore estopped from issuing the 2016 certificate as written. The condominium corporation appealed.

HELD: Appeal allowed. The appellant was bound by the certificate issued to the respondent in 2013, vis-à-vis the respondent. However, there was no basis for finding the appellant was estopped from issuing anything but a clean certificate thereafter. Here, where a condominium corporation discovered the unit layout was switched following the initial issuance of a certificate, it was obliged to disclose that information in a new certificate. To do otherwise would be misleading to a prospective purchaser. The respondent's remedy was to sue the appellant for any diminution of the value of the unit arising from any negligent issuance of the initial clean status certificate. The order below was accordingly set aside.

Metropolitan Toronto Condominium Corp. No. 723 v. Reino, [2018] O.J. No. 1197, Ontario Court of Appeal, D.H. Doherty, J.L. MacFarland and D. Paciocco JJ.A., February 23, 2018. Digest No. TLD-March262018012