18/11/2024– Jurisdiction Ontario
Part 88 published on 01/12/2024
Condominium corporation had issued an accurate status certificate. However, the Corporation’s actions, in relying upon a falsified status certificate, were oppressive.
Following the Applicant’s purchase of a unit in the condominium, the common expenses were increased and special assessments were levied. The special assessments were levied in order to fund required replacements of unsafe balconies. Furthermore, as part of the work, the Applicant’s solarium (a modification made to the Applicant’s exclusive-use common element balcony) was demolished. The corporation also took the position that the solarium was an unauthorized modification and therefore would not be reinstated. Instead, the balcony would be returned to its original condition.
The Applicants claimed that the status certificate they had received (prior to purchase) did not properly disclose the risk of the special assessments and did not properly disclose the Applicants’ rights and obligations in relation to the solarium. They sought to avoid the special assessments and to require that the solarium be reinstated.
The Court held that the status certificate issued by the condominium corporation was complete and accurate and provided adequate disclosure of the corporation’s knowledge at the time. The Court said:
In my view, as of October 25, 2021, the corporation did not have knowledge of a circumstance that may result in an increase in the common expenses because no expert had told them so. It was not obvious to an objective observer that the cost would be more than what the reserve fund contained and that it would require a special assessment or loan. To the extent that the Gillespie Engineering report dated October 1, 2021, might affect the future, the corporation disclosed the existence and the key findings of that report in the body of the status certificate. Paragraph 25 flagged in clear language the situation currently facing the corporation. In my view, paragraph 25 was sufficient to prompt the applicants to dig deeper into the situation to assess it for themselves.
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I find that the corporation did not have knowledge of any circumstance that may result in an increase for the common expenses of the unit until February 2022, when the work on the new reserve fund study was completed. It was only then that the engineers recommended a special assessment of $7.2 million to fund repairs and maintenance of the common elements. From that point forward, the corporation was fixed with knowledge that would have required disclosure in paragraph 12 of a status certificate. However, as of October 25, 2021, the corporation did not have reason to believe that was the case. All that it knew on that date was contained in the Gillespie Engineering report. The corporation highlighted this report in the status certificate and attached it to the status certificate.
I find that the corporation complied with the statutory and regulatory requirements in the status certificate issued on October 25, 2021. I find that the applicants’ unit is not exempt from any special assessment, levy, loan, or obligation to contribute to the cost of maintaining, repairing, or replacing the balconies. Subject only to my finding below with respect to the oppressive conduct of the corporation, the applicants’ unit is fully responsible for all future special assessments.
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I find that the applicants’ unit is not exempt from any special assessment, levy, loan, or obligation to contribute to the cost of maintaining, repairing, or replacing the solarium. Subject only to my finding below with respect to the oppressive conduct of the corporation, the applicants’ unit is fully responsible for all future special assessments.
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I am not prepared to order the corporation to reconstruct the solarium or to pay compensation for loss of the fair market value of the applicants’ unit. I am not satisfied that the applicants proved an entitlement to those damages, since the original status certificate was accurate.
However, the Court found that the condominium corporation’s conduct was oppressive in that, during its dialogue with the Applicants, the corporation had relied upon a falsified status certificate. The Court said:
In the absence of any evidence to the contrary, I conclude that the condominium corporation and its agents at MRCM deliberately altered and falsified the 2023 version of the status certificate. The corporation is responsible for the acts of its agents. They knowingly caused additional text to be added to the authentic status certificate to support the hard-line position they were taking with the applicants. I conclude that if the applicants had not found a true copy of the original status certificate, the corporation and its agents would have continued to lie to the applicants and insist that the corporation’s position had been disclosed on the status certificate prior to purchase.
As a result, the Court ordered the condominium corporation to pay damages of $75,000 to the Applicants and also to bear the full cost to be incurred for demolition of the solarium.
Gonzales v. York Condominium Corporation No. 242, 2024 ONSC 6372