Overview of the CPA’s Requirements for Information Statements
What is an Information Statement?
An Information Statement is a legally required document that provides prospective buyers with key details about a condominium unit. It ensures transparency and helps buyers make informed decisions.
The Condominium Property Act and Condominium Property
Regulation set out specific requirements for what must be included in an Information Statement, including defects affecting the unit or common property.
Why is Defect Disclosure Important?
Failure to disclose defects can lead to legal consequences, financial disputes, and reputational damage for the condominium corporation. Buyers have a right to be informed about issues that could impact safety, functionality, or financial costs.
Defects That Must Be Disclosed
What is Considered a Defect?
A defect is any issue that affects:
The safety or structure of the unit or common property.
The functionality of essential services (e.g., plumbing, heating, electrical systems).
Compliance with legal and building code requirements.
Common Defects That Require Disclosure
Structural issues (e.g., foundation cracks, water damage).
Mechanical system failures (e.g., HVAC, plumbing, elevators).
Pending major repairs that will require financial contributions from owners.
Deficiencies in construction that have not been remedied.
Defects That May Not Require Disclosure
Minor cosmetic issues (e.g., chipped paint, minor flooring scratches).
General wear and tear that does not impact function or safety.
Process for Gathering and Verifying Defect Information
Steps for Preparing an Information Statement
Conduct a property assessment: Identify defects in both individual units and common areas.
Consult maintenance records: Check past repairs and pending work orders.
Verify financial reports: Determine if upcoming assessments or repairs will impact unit owners.
Communicate with contractors and engineers: Obtain reports on structural or mechanical defects.
Document findings accurately: Ensure all required information is clearly included.
Ensuring Transparency and Compliance in Defect Reporting
How to Ensure Compliance
Use clear and specific language when describing defects.
Avoid omissions that could mislead buyers.
Ensure disclosures are based on factual evidence (e.g., inspection reports, engineering assessments).
Review current CPA and Condominium Property Regulation requirements to confirm compliance.
Consequences of Non-Compliance
Legal liability: The corporation or manager may face legal action for failing to disclose required defects.
Financial disputes: Owners may be required to cover unexpected repair costs.
Reputational damage: Trust in the condominium corporation and management can be impacted.
Creating a Defect Disclosure Checklist
Key Elements to Include in a Checklist
Identify all common property defects (e.g., roof leaks, foundation issues).
Verify unit-specific defects that impact functionality.
Check for planned special assessments for repairs or maintenance.
Ensure all disclosures are supported by documentation (e.g., inspection reports).
