Part 48 published on 01/11/14
Appeal allowed. Lease of common property declared valid and binding
The condominium corporation granted a lease of part of the common property (to a neighbor) at a time when the sole director and owner of the condominium was a representative of the developer. The condominium corporation subsequently challenged the lease, on the grounds that it was executed without all of the necessary approvals required by s. 40 (2) of the Condominium Property Act and was therefore ultra vires the corporation. The condominium corporation was successful at the lower court. [See Condo Cases Across Canada, Part 42, May 2013.] The neighbor appealed, and was successful on appeal. The lease was declared to be valid and binding.
The Court of Appeal said that the lease could not be challenged because the steps described in s. 40(4) and (5) of the Condominium Property Act had been completed. Referring to s. 40(4) and (5) the Court of Appeal said:
They apply specifically to condominiums and are designed to protect the Registrar, and a lessee, from having to go behind a certificate to determine if it is valid. Once a certificate has been provided to the Registrar, in the process of registration, there is no need for either the Registrar or the lessee to determine whether the condominium corporation has actually done what it asserts to have done in the certificate.