Part 30 published on 01/05/10
Lease of HVAC equipment properly disclosed by declarant
Two high-rise condominiums, developed by Glengarda, are connected by a rotunda that houses shared facilities of the two condominiums. The shared facilities area is equipped with its own HVAC system. The developer had sold the HVAC equipment to a financial institution, which then leased the equipment back to one of the condominium corporations.
At trial, Glengarda was held liable to the condominium corporations for failure to disclose sufficient information (about the lease arrangement) to condominium buyers.
Glengarda appealed, and was successful on appeal. The appeal court held that the disclosure statement did adequately alert prospective purchasers that the HVAC equipment would be leased. In particular, the first-year budget included with the disclosure statement referred to the estimated payments under the lease (in the first year). Additional specifics about the lease were not then available, and the Appeal Court found that the failure to provide those additional specifics was not a material omission.