In the case of Gonzales v. York Condominium Corporation No. 242, the court reaffirmed the critical duty of condominium corporations to be truthful and transparent with owners.
The dispute arose when the owners of a unit challenged special assessments levied by the condominium corporation and alleged that they had not been properly informed—at the time of purchase—about planned property modifications, including the removal of their solarium. They relied on the status certificate issued by the corporation, which they believed had omitted key information.
While the court dismissed their claim regarding the special assessments, finding that the status certificate was “complete and accurate,” it also determined that the condominium corporation had misled the owners in subsequent discussions. This misleading conduct was deemed oppressive, and the court ordered the corporation to pay $75,000 in damages.
Key Findings from the Decision
The court found that the condominium corporation had deliberately altered and falsified the 2023 version of the status certificate to support its position. The ruling stated:
“In the absence of any evidence to the contrary, I conclude that the condominium corporation and its agents at MRCM deliberately altered and falsified the 2023 version of the status certificate… If the applicants had not found a true copy of the original status certificate, the corporation and its agents would have continued to lie to the applicants and insist that the corporation’s position had been disclosed on the status certificate prior to purchase.”
The court further emphasized:
“Knowingly falsifying a status certificate, attempting to rely on that falsified certificate to compel a unit owner to accept the cost of demolishing the solarium, and then continuing to lie and mislead the owner is a paradigmatic example of acting in bad faith. I declare that the corporation’s conduct is oppressive, contrary to Section 135 of the Act.”
The Importance of Transparency in Condominium Governance
This case underscores the fundamental duty of condominium corporations to act honestly and avoid misleading owners. Unlike typical disputes between private parties, condominium owners rely on the corporation for truthful and transparent disclosure regarding the affairs of the community—within the limits of Section 55(4) of the Condominium Act.
Failure to meet this standard may lead to findings of oppression, significant financial penalties, and reputational damage for the corporation. Ultimately, this ruling serves as a clear reminder that honesty and good faith are not optional in condominium governance—they are legal obligations.
February 18, 2025 | James Davidson