Status Certificates – The Rainville Decision

In the Rainville case, an illegal third floor (a converted portion of the common elements) had not been brought to the purchaser’s attention. The estoppel certificate issued by the condominium corporation did not mention the illegal third floor. The Court of Appeal said that the condominium corporation had not met its obligations to the purchaser.

One key message in the Rainville decision is as follows: A condominium corporation has a duty to take reasonable steps to verify statements made in the corporation’s status certificates (previously called estoppel certificates). In some cases this may mean that the corporation has a duty to inspect the unit (before issuing the certificate). And, depending upon the terms of the management contract, the manager may be obligated to fulfill these obligations on behalf of the corporation.

Having said the foregoing, it seems to me that the Rainville case involved a very special set of circumstances. For instance:

  1. In the Rainville case, the estoppel certificate stated that “there are no continuing violations of the declaration, by-laws and/or rules of the corporation”.
     
  2. The manager had also noticed a window on the third floor, which should have led him to further investigate the possibility of an illegal third floor.

So, to me, the message is as follows: If a condominium corporation cannot be reasonably sure about the accuracy or completeness of a given status certificate, the condominium corporation may have a duty to make further enquiries; and in some cases this may mean that the unit should be inspected. However, there is no clear “rule of thumb” on this. It will likely depend upon the specific circumstances of each case.

Some condominium corporations may decide to inspect the unit prior to issuance of each status certificate. This will certainly minimize the risk of claims for failure to inspect the unit. However, if the unit is to be inspected, the inspection would have to be carefully conducted to ensure that any apparent violations are noticed, are then mentioned in the status certificate, and are otherwise followed-up for resolution as appropriate.

It also seems to me that the prescribed fee for issuance of a status certificate should be higher (than the current $100) if the process will involve a unit inspection in every case. For more information, read Jim’s full article, Orr / Rainville v. MTCC 1056 and Gowlings – Court of Appeal Decision Arrives.

Status of Condo Act Amendments

Condo lawyers have been waiting for changes to the Condominium Act, but it’s still unclear when the changes will happen. We’re pleased to refer our readers to an October 27, 2014 article in the Law Times, in which Jim Davidson was asked for comments about the anticipated amendments to the Condominium Act.

The Ontario government began a three-stage process to modernize the Act in 2012, and released a report containing a significant number of possible amendments last year, followed by a final stage of public consultations, but there hasn’t been much action since then.

The anticipated amendments are expected to provide increased consumer protection, as well address financial management issues. Specific amendments that have been proposed include the creation of a condo office that would provide education to owners, perhaps play a role in regulating condo managers and also act as a dispute resolution mechanism for some conflicts between owners and corporations. They also include mandatory education for directors and licensing for property managers, as well as changes to reserve fund planning. One hoped-for change that seems to be missing is to the cumbersome procedures for owners to alter common elements. 

As noted in Jim’s blog post of November 13, 2014 on the 2014 National Condominium Conference, the province has said that the amendments are coming “soon”. We’ll keep you posted. For more information, read the full article, Lawyers Waiting for Condo Law Changes, which appeared in the October 27, 2014 issue of the Law Times.

Four Important Facts to Know about Having a Live-in Superintendent at your Condominium

Many condominiums have a superintendent who resides, as part of their employment contract, in a suite owned by the condominium (or which is part of the common elements, controlled by the corporation). As the employer, the condominium corporation should be aware of some key issues that shape this role and will affect the decision making process in the hiring and termination of a live-in superintendent.

1. Your condominium corporation is an employer and the superintendent is an employee

You may or may not have a written employment contract. Ideally you should have a written contract to clearly define the employment terms. Even without a written contract, there is still an employment relationship that triggers many legal responsibilities that come with being an employer. In Ontario, the employment relationship with your superintendent is governed by the Employment Standards Act (“ESA”) and the common law. The relationship is also defined by the terms of the employment contract. Key legal requirements to be aware of as an employer include termination obligations, hours of work, and vacation time and pay.

2. Human rights and workplace safety

An employee has human rights protection from discrimination under the Human Rights Code in Ontario. An employer also has mandatory obligations to prevent workplace violence and harassment under health and safety legislation. These protections exist at the employee's workplace, which in the case of a live-in superintendent, is the condominium property. Anyone with whom a superintendent has to interact at the condominium should be aware of the condominium corporation's policies against workplace discrimination, harassment and violence. If the board of directors or management receives notice from an employee about experiencing discrimination, harassment or violence, immediate action will be required.

3. An improper termination can lead to wrongful dismissal/human rights claims

If your condominium corporation is considering terminating its employment relationship with a superintendent, the board of directors should obtain professional advice on the proper methods for doing so, including best practices for conducting a termination meeting, the law regarding termination pay and notice requirements, and how to best protect the condominium corporation from a wrongful dismissal or human rights claim by the terminated employee.

4. What if the former superintendent will not vacate the suite?

If you are ending your employment relationship with a live in superintendent, and intend to hire a new live in superintendent, be aware that if the outgoing superintendent does not vacate the suite as required under the Residential Tenancies Act, it might take weeks to obtain an eviction order at the Landlord and Tenant Board, and then enforce that order. Be cautious about promising a date for living accommodations under a new contract for an incoming superintendent unless you are confident that the former superintendent will have moved out by the date specified at the time of dismissal.