Strata Corporations May Be Liable for Incorrect Information Certificates
What happens when a strata corporation discloses the wrong information on a Form B information certificate*?
Generally, a person who is requesting information from a strata council can rely upon that information as factual. If the strata corporation discloses false information, this means that the person as a result of errors and omissions can sue the corporation.
Though a directors & officers insurance policy is optional, many strata corporations will have one in place to protect themselves against such lawsuits. It is strongly recommended that all strata’s consider purchasing a separate E&O policy since it reduces the potential for dispute and will protect against D&O policy exclusions.
Directors and officers policies contain “insured vs. insured” exclusions that exclude coverage for claims brought by one insured party against another. Should the Strata Corporation and Section share one policy and a Section sue the Strata Corporation for an alleged wrongful act, the Strata Corporation would not be able to rely on the D&O policy for defense.
If you have been given notice of a court action or arbitration, be sure to contact your insurance broker to file a claim.
*Form B Information Certificate – is a form required to be issued by a strata corporation pursuant to Section 59 of the Strata Property Act. This form must be issued within one week of a request by an owner, a purchaser or a person authorized by an owner or purchaser.
Original article sources:
- BFL Canada- Sectioned Strata Corporations & Insurance
- Strata may be liable for incorrect information certificates
HUB International Coastal Insurance Brokers