12/13/2018 – Jurisdiction Manitoba
Part 65 published on 01/03/2019
Condominium corporation declared to be beneficial owner of parking unit
The Developer had made the seven-stall parking area in the building a unit rather than a common element. The Developer retained title to this parking unit and, while the Developer still had control of the condominium corporation, the Developer entered into an agreement to lease the parking unit to the condominium corporation.
The condominium corporation subsequently asserted that the lease constituted a breach of the Developer’s fiduciary duties and sought a declaration that the parking unit “is a common asset of the Condominium Corporation” and an order for the transfer of the unit from the Developer to the Condominium Corporation.
The Court held that the Developer had not provided adequate disclosure of the intention to retain and lease the parking unit. The Court said:
The Parking Lease does provide disclosure that the Condominium Corporation is merely a tenant of the parking area and the Developer is the landlord, and that there is an option by the tenant to purchase the parking area from the Developer for $167,000. However, the Parking Lease between the Developer and the Condominium Corporation is not referred to in the Condominium Declaration or in the Disclosure and Status Certificates set out in the evidence. The Parking Lease is also inconsistent with the Condominium Declaration and Plan and the Disclosure and Status Certificates, which are the documents that govern the legal relationship in this matter. It is inconsistent because the Parking Lease refers to the retention of the parking area by the Developer, while the Condominium Plan and Declaration as well as the Disclosure and Status Certificates make no reference to this, but instead read as though parking is a common element. In my view, merely providing a copy of the Parking Lease constituted insufficient disclosure to unit purchasers in this case. This case is therefore governed by the principle set out in the Newrey Holdings case.
Winnipeg Condominium Corp. 479 v. 520 Portage Avenue Ltd. et al., 2018 MBQB 197