A major decision of the Ontario Court of Appeal last week has raised the bar on the level of due diligence required by condominium corporations in preparing status certificates.
The prior owner of the unit was Richard Weldon, who had bought the townhouse from the court-appointed receiver when the developer had financial problems. The unit was a two-storey townhouse with a common-element attic above the second floor.
After his purchase, Weldon improperly expanded the unit into the attic. He built new stairs, windows and skylights, a bathroom, sitting area and bedroom. The additional space totalled 862.2 square feet (80.1 square metres).
When the condominium was created in 1993, the area above the second floor ceiling in Weldon’s unit was shown on the plans as common area, and no steps were ever taken to convert the legal designation of the space into part of the unit below.
Weldon sold the unit to Rainville in 1997 for $975,000. No mention was made of the illegal construction and the estoppel certificate (now called a status certificate) provided by the property manager at the time incorrectly stated that there were no continuing violations of the condominium declaration, bylaws or rules.
Rainville went to her lawyer’s office in January 1998 and met with a clerk to sign the closing documents. She was never shown any condominium plans and was under the impression that she was buying everything from the ceiling of the third floor down to the basement parking space.