24/03/2017 – Jurisdiction Ontario
Part 58 published on 01/06/2018
Purchaser obligated to pay special assessment. Status certificates provided full disclosure
The applicant acquired a number of units in the condominium pursuant to purchase agreement dated August 11, 2014.
The condominium corporation had levied a special assessment in 2012. That special assessment had been incorrectly levied against only some of the units. It was therefore cancelled in 2015. Credit was given to any owners who had made payment under that “incorrect” special assessment. A second special assessment was issued, correctly on March 1, 2015.
In the meantime, the applicant had received three status certificates and had completed its purchase. The applicant asserted that it had no obligation to pay the special assessment for two reasons:
- the potential special assessment had not been properly described in the status certificates received by the applicant;
- the corporation’s lien right had expired.
The Court ruled in favour of the condominium corporation. The Court said:
The October and December status certificates were issued in contemplation of the purchase of the commercial units, within the August 2014 to July 2015 fiscal year. Both status certificates unequivocally informed the prospective purchaser that the respondent was operating at a deficit, that the board was considering the need for a special assessment and that the respondent was in a state of administrative difficulty, without copies of all financial records belonging to it and with incomplete records of payments and owner contributions to reserve fund accounts.
…
The issue before the court is whether the respondent is statute-barred from registering a lien on account of the applicant’s default in paying the second special assessment. The first special assessment was never levied as against the applicant. The respondent is not attempting to resurrect rights it had in 2013 or 2014 to register a condominium lien against the commercial units. It never had such rights as the assessment was not levied against the commercial units. As the first special assessment was never levied, there was never a default and therefore never a corresponding right to register a lien to the commercial units with respect to that assessment. The second special assessment represents the first levy to the commercial units for the costs to repair the garage and as such, the right of the respondent to register liens to the commercial units upon the applicant’s default on March 1, 2015 had not expired before the lien was registered on May 29, 2015.
