Sunday, July 24, 2011

Condominium Estoppel Certificates

I am often asked by property managers what information should be provided by a condominium corporation when they are asked to provide what is commonly referred to as an "estoppel certificate"?  Curiously, this term is not defined in Alberta's Condominium Property Act (the “CPA”).
The nature of an estoppel certificate was discussed by the Honourable Mr. Justice K.D. Yamauchi in Lightner v. Owners: Condominium Plan No. 772 3097, 2009 ABQB 3.  At paragraph 33 he stated:

[33] The term “estoppel certificate” is not used in the Act. However, a person may request a
condominium corporation to provide a statement setting out certain information concerning the
financial and general status of the condominium corporation, including whether an owner is up
to date in its contributions. The information prevents the condominium corporation from
claiming a different set of facts and is “estopped” from so doing. It is not an agreement, as it has
none of the trappings of an agreement, such as an offer, acceptance and the exchange of
consideration. That said, a person could rely to their detriment on the contents of the statement
and could suffer damages as a result.


Justice Yamauchi did not distinguish between the two sources of estoppel certificates.  The CPA contemplates two basis upon which information (a certificate) can be requested.  Section 39(6) of the CPA provides that:


39(6) A corporation shall, on the application of an owner, purchaser or mortgagee or the solicitor of an owner, purchaser or mortgagee, or a person authorized in writing by any of those persons, certify

                                 (a)    the amount of any contribution determined as the contribution of the owner,

                                 (b)    the manner in which the contribution is payable,

                                 (c)    the extent to which the contribution has been paid by the owner, and

                                 (d)    the interest owing, if any, on any unpaid balance of a contribution

and, in favour of a person dealing with that owner, the certificate is conclusive proof of the matters certified in it.

A request for more detailed information may be requested pursuant to section 44 which provides that:

44   On the written request of an owner, purchaser or mortgagee of a unit the corporation shall, within 10 days after receiving that request, provide to the person making the request one or more of the following as requested by that person:

                                 (a)    a statement setting out the amount of any contributions due and payable in respect of the unit;

                                 (b)    the particulars of

                                           (i)    any action commenced against the corporation and served on the corporation,

                                          (ii)    any unsatisfied judgment or order for which the corporation is liable, and

                                         (iii)    any written demand made on the corporation for an amount in excess of $5000 that, if not met, may result in an action being brought against the corporation;

                                 (c)    the particulars of or a copy of any subsisting management agreement;

                                 (d)    the particulars of or a copy of any subsisting recreational agreement;

                                 (e)    the particulars of any post tensioned cables that are located anywhere on or within the property that is included in the condominium plan;

                                  (f)    a copy of the budget of the corporation;

                                 (g)    a copy of the most recent financial statements, if any, of the corporation;

                                 (h)    a copy of the bylaws of the corporation;

                                  (i)    a copy of any minutes of proceedings of a general meeting of the corporation or of the board;

                                  (j)    a statement setting out the amount of the capital replacement reserve fund;

                                 (k)    a statement setting out the amount of the monthly contributions and the basis on which that amount was determined;

                                  (l)    a statement setting out the unit factors and the criteria used to determine unit factor allocation;

                                (m)    a statement setting out any structural deficiencies that the corporation has knowledge of at the time of the request in any of the buildings that are included in the condominium plan;

                                 (n)    a copy of any lease agreement or exclusive use agreement with respect to the possession of a portion of the common property, including a parking stall or storage unit.

In addition to sections 39(6) and 44 of the CPA, section 48 of the CPA provides that upon written request of an owner, purchaser or mortgagee of a unit a condominium corporation shall provide a copy of the insurance policy to the person making the request within 30 days from the day of receiving that request, or provide a copy of the insurance certificate to the person making the request within 10 days from the day of receiving the request.


A condominium corporation is not obligated to provide the information indicated in section 44 unless a written request is made specifically seeking some or all of the information indicated in section 44 of the CPA.  Moreover, pursuant to section 74 of the CPA if copies of documents are provided that a reasonable fee may be charged to compensate the corporation for the expenses it incurs in producing and providing a document required under the CPA.   Section 74 would apply to much of the information contemplated in section 44; ie. management contracts, reserve fund studies, minutes of AGM's and Board Meetings, etc.

The convention which has evolved in Calgary when a condominium corporation receives a request for an "estoppel certificate" is that a property manager will prepare, and often sign, a certificate which contains much of the information listed in section 44 of the CPA.  It should go without saying that whomever signs the certificate must have personal knowledge of the matters contained within the certificate.  Though this additional information is likely helpful, it is beyond the scope of section 39(6) and it is not necessary to be provided unless it has been specifically requested in writing.

This then returns us to the original question: what information should be provided by a condominium corporation when they are asked to provide what is commonly referred to as an "estoppel certificate"The answer  depends on what has been requested.  Most parties, including lawyers, requesting an estoppel certificate do not specify that they are seeking to be provided with the information listed in section 44 of the CPA.  Following from this a condominium corporation may provide a certificate containing  only that information listed in section 39(6) if the certificate clearly states that the certificate is being provided pursuant to section 39(6) of the CPA.  As such a certificate which complies with section 39(6) can be a proper answer to a request for an "estoppel certificate".  However, this would not be a proper answer to the request if the person requesting a certificate is clear to specify that they require some or all of the information listed in section 44 of the CPA.  

If a more robust estoppel certificate is being provided, condominium corporations and their property managers would be wise to specify that the information is being provided pursuant to section 44 of the CPA and be sure to not provide more information than that contemplated in section 44 of the CPA.