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Condos Do Not (Always) Have to Disclose Sewer Backups in their Status Certificate

In a recent Ottawa case, the court had to determine whether the condominium corporation was responsible for the damage caused by repeated sewer backups originating from common elements, which damaged an owner’s unit basement. As unfortunate as the situation was for this unit owner, ultimately the court found that the condominium corporation was not responsible for these sewer backups or for the resulting damage. It also concluded that, in the present circumstances, the Corporation had no obligation to disclose the existence of past sewer backups in its status certificate.

Factual background

Carleton Condominium Corporation No. 252 (the “Corporation”) is comprised of several blocks of townhomes. Ms. Unsworth took possession of her unit in January 2012. At the time of purchase, she obtained a clear status certificate from the Corporation. She did not carry out any plumbing inspection of her unit prior to closing and the Seller Property Information Statement received from the vendor indicated that there were “no” problems with the plumbing system.

However, within two (2) months of moving in, Ms. Unsworth experienced four (4) sewer backups. In fact, she alleged to have experienced a dozen sewer backups within two (2) years. As a result, she commenced a claim against the Corporation. She took the position that the Corporation was negligent in its way of addressing the ongoing sewer backups and also claimed that the Corporation should have disclosed in the status certificate what she claimed to have been a known history of sewer backups.

Maintenance and repair of the sewer line

The Court looked at whether the Corporation took reasonable steps to maintain the sewer line under Ms. Unsworth’s unit. The evidence showed that the Corporation had a preventive flushing program and spent approximately $6,000 per year on servicing the sewer lines. The court also noted that the drainage problem was compounded by the owners flushing inappropriate items down their toilets. The court further considered case law which confirms that a condominium corporation is not an insurer of the unit owner’s interests. While the board of directors was aware of the sags in the sewer line for many years prior to the Ms. Unsworth’s occupancy, based on the advice they received, the board reasonably believed that regular flushing of the sewer lines was the solution.  This was sufficient for the Corporation to have met its duty of care towards Ms. Unsworth.

At the end of the day, the court was of the view that Ms. Unsworth failed to establish that there was a less-than-adequate system in place for the maintenance of the sewer drain under her unit. There was a system of maintenance in place and the Corporation’s plumber attended promptly when service calls were made. Having stated this, for the court, the more vexing problem was whether the Corporation ought to have taken more extensive steps to investigate the sewer backup issue with a view of carrying out structural changes. Stated otherwise, was it reasonable for the Corporation to limit its maintenance program to regular flushing or should it have investigated and fixed the problem earlier.

In 2009, the Corporation took part in the City of Ottawa Protective Plumbing Program. In the context of it, the City’s engineers investigated the Corporation’s sewer lines in 2010-2011. At the time, no major structural issue was identified. After sewer backups increased, and after issues with the sewer line were identified during the course of the implementation of the City’s preventative program, the Corporation retained an engineer in 2013 to investigate the situation. The engineer identified structural issues with the sewer lines and proposed a solution, but the Corporation was of the view that this proposed solution was too disruptive and expensive. Consequently, the Corporation obtained a second opinion which was eventually accepted by the Corporation and implemented in 2013-2014.

After reviewing the factual background, the judge concluded that the Corporation acted reasonably in the circumstances at the time:

As with so many cases, hindsight now shows us that, had replacement and remediation of sewer pipes been instituted earlier, it is likely that the sewer backups would have been lessened. It would appear that, since 2014, the problems have essentially disappeared. The evidence shows that the [Corporation] did make efforts to maintain a flushing program, obviously in the hope of not having to spend more money to carry out expensive repairs/replacement. I find that the [Corporation] took reasonable steps in all of the circumstances, one of the circumstances being that residents would obviously block the lines from time to time by flushing inappropriate objects down the drain.

The status certificate

The court then dealt with the issue of the status certificate. The court concluded that sewers in this complex backed up from time to time before Ms. Unsworth moved into her unit. In such circumstances, the question was whether the Corporation had a duty to advise Ms. Unsworth of the prior sewer backups through the status certificate.

Ms. Unsworth argued that the Corporation had a duty to include in the status certificate anything that would be relevant to the making of an informed decision to purchase her unit or not.

Ultimately, the court concluded that there was no requirement under section 76 for the Condominium Act, 1998 (the “Act”) to specifically advise someone of these potential sewer backups. Rather, the court was of the view that the Corporation’s disclosure obligations were limited to having to disclosed whether it had knowledge of a potential increases of common expenses. The judge concluded that, at the time it issued the status certificate, the Corporation had no knowledge of such future potential expense.  Indeed, until the Corporation obtained an engineering report outlining the real issue, the Corporation reasonably believed that its maintenance program was adequate to address the known issues.  As such, the court found that the Corporation met its disclosure obligation, both statutorily and at common law.

Lessons learned

Condominium corporations are not insurers. They are not held to a standard of strict liability. All they can do is act reasonably based on the professional knowledge and advice they receive. Corporations are not expected to reach perfection, not even near perfection. That is why owners have insurance. However, if a condominium corporation does not act diligently and in a timely manner, or if it does not reasonably rely on the expertise of its experts, it may be found to have been negligent.

Great care must be exercised when preparing a status certificate, as errors or omissions can attract liability. If a condominium corporation is uncertain whether something should be included in the status certificate, the corporation should err on the side of caution or, alternatively, consult legal counsel.

Additionally, owners (or purchasers) should keep in mind that the status certificate is not a warranty or a home inspection report. Even if a “clear” certificate had been received from a condominium corporation, a purchaser should still conduct his/her due diligence, ask questions, carry out an inspection of the unit and/or consult the records of the condominium corporation.

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