Lawlor v. Currie (Nova Scotia Small Claims Court)

The purchaser of a condominium unit sued the vendor for breach of warranty flowing from statements contained in the Agreement of Purchase and Sale and the accompanying “property condition disclosure statement”.  The Court was satisfied that the agreement and accompanying disclosure statement effectively warranted that the property was in “sound” condition, and that no special assessments would be forthcoming. 

After completion of the purchase, the condominium corporation levied a special assessment for window and siding work.  The purchaser’s share was just under $5,000.  The Court awarded the purchaser judgement against the vendor (for the purchaser’s share of the special assessment).  In doing so, the Court also dealt with the following issues: 

• Although the estoppel certificate issued by the condominium corporation referred to upcoming windows and siding work, the Court said that “a review of that document by the average reader would lead to a reasonable conclusion that nothing imminent was contemplated”. 
• The vendor asserted that any damages claim should be offset or reduced by the fact that the property would benefit from the betterment of the new siding and windows.  In other words, the vendor argued that the purchaser, by virtue of the special assessment, was receiving an enhanced property.  The Court rejected this argument.  The Court said:

 “Here, I do not think the evidence establishes that there is an enhanced value to the condominium unit because of the payment of the special assessment.  I accept that theoretically the unit would have some intrinsically greater value as a result of new windows and siding as part of the common elements.  However, what is unknown is whether there are other parts of the common elements which will have to be substantially repaired or replaced over the next few years and thus potentially attract further special assessments.  It would be speculation for me to try to engage in that kind of analysis.  I would think to establish that there was an enhanced value would require expert evidence dealing with the reserve fund study and condition of the common elements.  Unlike a case with a single dwelling, stand-alone house, there are simply too many variables in this situation to conclude that a deduction for a betterment is appropriate.”

[Editorial note:  I note that the condominium corporation was not made a party to the claim.  If the estoppel certificate in fact did not properly disclose the risk of a special assessment, it seems to me that the condominium corporation would be a logical defendant.  However, I’m not sure that I agree with the Court’s view that the estoppel certificate did not provide such disclosure in this case.]