The first board of directors of newly registered condo corporation, will often be faced with many tasks that follow once the turnover of the condominium corporation from the declarant to the unit owners takes place. One item that sometimes is missed, is the securing of as-built drawings. Section 43(5) of the Condominium Act, 1998 (the “Act”) requires the declarant to provide certain documents and warranties to the Board within 30 days of the turnover meeting. These include the as-built architectural, structural, engineering, mechanical, electrical and plumbing plans (the “As-built Drawings”). The As-built Drawings are important documents for the repair and maintenance of the condominium property. While they may not be used on a daily or even monthly basis, when the As-built Drawings are needed (ex. certain repair projects), they serve a valuable purpose.
If the missing or incomplete As-built Drawings are not noticed in a timely manner, it may only be discerned when the need for the documents arises at which point it may be too late. We encourage management and Boards to place great importance on the timely securing of the relevant turnover documents and to ensure that the documentation has sufficient detail and is clear on what was received, when it was provided and what, if anything, was missing.
Sections 43(8) & (9) of the Act provide specific recourse – a court application – with broad relief to the condominium corporation should the declarant fail to comply with its turnover obligations. Absent reasonable justification, a declarant that fails to comply with its turnover obligations (such as providing all As-built Drawings within 30 days following the turnover meeting) can be subject to a court order that, amongst other relief, awards the condo corporation (1) damages resulting from the missing turnover documents, (2) costs of the court application, (3) an additional amount capped at $10,000 (which does not appear to be connected to actual damages suffered or costs incurred).
A September 2019 case from the Ontario Superior Court of Justice has clarified that a condominium corporation’s recourse and broad relief provided for in sections 43(8) & (9) of the Act is limited to the declarant. In Thunder Bay Standard Condominium Corporation #52 v. Resolve Project Management Ltd. et al. a declarant defendant (Allure) wished to add a former general contractor (Man-Shield) as a necessary party in response to an application brought by the condominium corporation for As-built Drawings. Allure contracted with Man-Field to act as the general contractor for the condominium construction but Man-Shield was terminated in the middle of the project.
The question for the court to determine was whether Man-Field as the (former) general contractor, was a necessary party or could be named in an application brought under Section 43 of the Act for turnover documents and related relief.
Madam Justice Nieckarz determined that the Act does not give the condo any cause of action (pertaining to As-built Drawings) as against Man-Shield. She reasoned:
“Sections 43(4) and (5) of the Act impose an obligation on the “declarant”, who is Allure. Section 43(9) gives the court the power to make orders for compliance with these section as against the “declarant”. No other party is referenced. The Act is clear in this respect.”
Her Honour further noted that Allure may still have a breach of contract claim against Man-Shield but it will need to be a separate application or action.
There are a few important takeaways for condominium corporations:
- Ensure you obtain the As-built Drawings within 30 days of the turnover meeting.
- If the declarant does not comply with its turnover obligations, the Act provides a streamlined and focused legal mechanism to obtain the documents vis-a-vis a court application
- The party named in the application (i.e. the respondent) should only be the declarant. This particular application is not the avenue to raise various issues and causes of action (beyond the turnover documents) as against the declarant and other parties. Such issues can be raised in the context of another application, or likely an action. Missing turnover documents can be raised in the context of a broader application or an action, but it will likely not be dealt with in the same expeditious manner that an application under Section 43 of the Act provides.