Category Archives: Housing

Legal comment, news and articles relating to recent important developments and Canadian court decisions relating to Housing.

Older Condominiums are Heading for Litigation

Under the Condominium Act , a board of directors owes legal obligations in regard to reserve funds for the replacement of common elements. Ron recently acted in such a dispute. Many older condominium buildings have underfunded reserve funds, which can occur due to the failure of directors to appreciate their legal duty to provide for adequate funding for the replacement of deteriorating infrastructure/common elements. Funding must be based on accurate estimates of the useful life and accurate estimates of the cost of replacement, as set out in the reserve fund study mandated under the Condominium Act. Third party purchasers may rely on the accuracy of representations contained in reserve fund studies. In practice those studies constitute the inspection by a purchaser of a condominium unit and building.

Directors risk personal liability for misrepresentations in the reserve fund studies, even though the reserve fund engineers also bear responsibility for any negligence on their part.