Who Can Rely On A Status Certificate?
Recently I received an interesting question respecting status certificates from a very astute condominium manager.
As many of our readers know, under the former (1978 version) of the Condominium Act, Section 32(8) of that Act said that a status certificate was binding upon the condominium corporation “as against the person requesting the certificate.”
However, the current Act – Section 76(6) – does not contain the same words. Instead, section 76(6) of the current Act says that the certificate binds the corporation “as against a purchaser or mortgagee of a unit who relies on the certificate”…and this could, in theory, be someone other than the person who requested the certificate!
So the question raised by the condominium manager is as follows:
Is it possible to include a statement (perhaps attached to the status certificate) saying that the certificate can only be relied upon by the person for whom the status certificate is issued to? Might the statement also say that the certificate should not be disclosed to anyone else, and in that sense is provided in confidence to the recipient?
After all, status certificates contain a great deal of important and private information, and a condominium corporation really does not intend to be disclosing that information to “all potential purchasers or mortgagees”(i.e. persons other than the requester who is entitled by law to receive the certificate).
There is considerable risk (of potential liability) that comes with the issuance of a status certificate, and the risk is somewhat different if the certificate could potentially be relied upon by any purchaser or mortgagee of the unit. If that were possible, the fee to prepare and issue the certificate would, arguably, be higher than the $100 payable pursuant to Section 18(2) of Regulation 48/01.
Also, if there is no control on who can see a status certificate, there is an increased risk of disclosing private information (not to mention any errors in the information) to a very wide net of persons.
So, my conclusion is: Perhaps a statement of the sort noted above could, in fact, effectively limit exposure (for the condominium corporation) to the specific recipient of the certificate (notwithstanding the wording of Section 76(6) of the Act). It’s a grey and uncertain area and I’m not aware of any Court decision on point. But it’s certainly an interesting idea for condominium managers and Boards to consider as a precaution going forward.
Subscribe to Condo Law News and keep up to date on the latest legal developments in the Condominium industry.