Part 54 published on 01/05/16
Manager ordered to pay costs incurred by condominium corporation due to inaccurate status certificate
The property manager was responsible for preparing the status certificates for the condominium corporation. The property manager prepared and issued a status certificate that contained mistakes. In particular, the status certificate failed to disclose a potential special assessment (due to required roof replacement), and also failed to disclose details of an expropriation. Because of the mistakes, the condominium corporation incurred significant costs to defend a claim by a purchaser who had received the inaccurate status certificate.
In a separate court process (between the condominium corporation and the purchaser), the purchaser was ultimately awarded costs of $15,000.00, even though the purchaser did not suffer any net loss due to the inaccurate status certificate.
In the end, the condominium corporation’s own costs, plus the court costs payable to the purchaser, totaled almost $100,000.
The condominium corporation then sued the manager for recovery of the costs and was successful. The Court said:
I find that the Property Manager failed to carry out its performance obligations with respect to the preparation of the status certificate for the unit 13 Purchaser and that the Condominium Corporation was harmed to the extent of $97,182.68. The indemnification clause (in the Management Contract) applies to the circumstances of this this case.