Liabilities Resulting From Poor Record Keeping in Condominium Management

Toronto Standard Condominium Corporation No. 2130 v York Bremner Developments Ltd, 2016 ONSC 5393

This comprehensive decision resolved six (6) ongoing lawsuits between the Condominium Corporation (TSCC 2130) and its developers and serves as a warning to condominium management of the liability that can arise from poor recording keeping. This case shows how management can be on the hook for the consequences of failing to keep adequate records- even years after the management relationship has been terminated.

Slip and Fall Incident

In 2010, the Condominium’s developers hired Whitestone Property Management to look after the property. At the beginning of 2011, there was a slip and fall outside of the Condominium which resulted in litigation. The developer’s insurance agent stated that the slip and fall occurred after the property had been transferred to the Condominium Corporation, and in 2013 the plaintiff moved to add TSCC 2130 as a party to the litigation. TSCC 2130 promptly contacted their insurance broker, who claimed that their current policy came into effect three (3) days after the slip and fall. In order to clarify the insurance policy that was in place at the time of the slip and fall, TSCC 2130 began looking through the records kept by Whitestone Property Management.

It was determined that Whitestone was the property manager at the time of the slip and fall, and would have been responsible for documenting the insurance policies in place at the time. After TSCC 2130 was named in the lawsuit, their lawyers contacted the developer’s lawyers in the slip and fall action and requested a copy of the previous insurance policy. TSCC 2130’s lawyers sent numerous letters, phone calls, and correspondence to the developer’s lawyers- all of which went unanswered. As a result, TSCC 2130 incurred approximately $16,000 in legal fees in trying to track down the missing insurance policy.

Questions regarding the insurance policy in place at the time of the slip and fall could have been immediately answered if the supporting documents had been properly kept in the Corporation’s records. At trial, the Court ruled that Whitestone’s failure to maintain and leave a comprehensive insurance file for the Condominium Corporation violated its duty to maintain accurate records and keep them available for the Board at all times- even after their tenure as property managers had ended. Whitestone was liable to repay the Corporation approximately $16,000 in damages for their failure to maintain records and the costs associated with ascertaining same.

Bottom Line: Record Keeping Duty

Condominium boards and property managers have a duty to keep accurate and up-to-date records for their residents and clients. In the event that a party must rely on faulty or incomplete records, the record-keepers can be on the hook for damages arising out of their negligence. Lawyers can help determine whether the documentation supporting the Condominium Corporation is adequate and will avoid potential liabilities in the future. If there is any concern or doubt regarding a Condominium’s supporting documentation, a lawyer should provide advice on how to correct the documentary deficiencies- before problems arise.