One of our readers asks us:

Q: Our condo board recently requested a conciliation meeting with Tarion. We are still in the "pre-conciliation repair period." At what point should something be stated on our status certificates?

A: Oddly, neither the Condominium Act, 1998 nor its regulations specify that Tarion claims must be disclosed in status certificates, but the prescribed form of status certificate contains a paragraph that clearly contemplates disclosure of Tarion claims. That paragraph provides:

21. The Corporation has no outstanding claim for payment out of the guarantee fund under the Ontario New Home Warranties Plan Act, [if applicable add: except …………………………………  (give brief particulars and the status of any claims that have been made)].

If your Tarion claim is proceeding to conciliation, it’s obviously an "outstanding claim for payment out of the guarantee fund" and should therefore be disclosed in this paragraph 21 of the status certificate.

As for when and how Tarion claims are actually commenced, keep in mind that section 44 of the Condo Act deems filing of a performance audit report with Tarion to be a notice of claim to Tarion for deficiencies disclosed in the report. The claim should therefore be disclosed in status certificates once the performance audit report is filed with Tarion by the engineers and whenever any additional Tarion claims are made by the condo corporation, which can be made by filing:

  1. First Year Common Elements Form;
  2. Second Year Common Elements Form; 
  3. Major Structural Defect Common Elements Claim Form; or
  4. Common Elements Emergency Claim Form

More from Tarion on its common elements claims process is available here.

If a party appeals a final decision of Tarion to the License Appeal Tribunal, the matter then becomes a legal proceeding which must also be disclosed in paragraph 19 of the prescribed form of status certificate.  This paragraph provides as follows:

19. The Corporation is not a party to any proceeding before a court of law, an arbitrator or an administrative tribunal [if applicable add: except ………………………………………… (give brief particulars and the status of those proceedings to which the Corporation is a party)].

This paragraph would also be used if the condominium chooses to forego or abandon the Tarion process and enforce its rights through a lawsuit in court.

As for whether it makes more sense for your condominium to pursue claims for construction deficiencies in court or through the Tarion process, be sure to see our July 2010 piece entitled "10 reasons why condos should get legal advice about warranty claims."

As always, talk to your corporation’s lawyers about what claims must be disclosed on status certificates.