Part 51 published on 01/08/15
Appeal dismissed. Declarant not yet obligated to convey clubhouse
The condominium corporations’ claims had been dismissed at the lower Court. In particular, the lower Court had held that the developer was entitled to control (and mortgage) the clubhouse until the developer had conveyed all of the units in the condominiums. [See Condo Cases Across Canada Part 45, February 2014.] The condominium corporations appealed, and the appeal was dismissed. The Court of Appeal held that the condominium corporations had no equitable interest in the clubhouse that was capable of registration on title. The Court of Appeal also held that the mortgage registered by the developer (against the clubhouse) was valid. The Court of Appeal said:
The evidence discloses that Blue Shores is still the owner of the Clubhouse. Under the disclosure statement, Blue Shores has no obligation to convey the Clubhouse until 120 days after the date on which it is no longer the registered owner of any lands within the project. As owner of the property, Blue Shores was entitled to mortgage the property and there is no prohibition to it doing so in any of the condominium documentation.
Blue Shores has undertaken to discharge the mortgage from title before it conveys title to the (condominium corporations).
The Court of Appeal also confirmed that Blue Shores was not obligated to operate the clubhouse on a non-profit basis, or to account (for the profits) to the condominium corporations.