TORONTO – An Ontario Superior Court of Justice has ruled that a condominium corporation does not qualify for the special status of a “home buyer”1 under the province’s Construction Act when the municipal occupancy permit for its newly acquired units excludes significant common element areas. The decision, released on August 11, 2025, means that a construction lien of over $363,000 registered by an electrical contractor against two guest suites owned by the condominium corporation will not be discharged on that basis, and the matter will continue to proceed toward trial.
The dispute arose from the construction of a new high-rise condominium project developed by Churchill Three Develco Inc. The contractor, E-Tech Electrical Services Inc., was hired to provide electrical services and materials for the building. Following the project’s development, the Condominium Declaration was registered on February 4, 2022, which formally created Toronto Standard Condominium Corporation No. 2890. As part of its obligations under the Declaration, TSCC 2890 purchased two guest suites, Suites 201 and 202, from the developer on May 2, 2022. The suites were intended to be rented out to the residents for their guests.
The financing for the purchase was notable, with the $254,250 price for Suite 201 and the $180,000 price for Suite 202 being entirely covered by vendor-take-back mortgages from the developer, Churchill. Payments on these mortgages were not scheduled to begin until April 2023, nearly a year after the condominium corporation took ownership. E-Tech continued its work on the project and on September 30, 2022, registered a claim for lien for $363,359.08 against the titles of the two guest suites, alleging it had last supplied services and materials on September 23, 2022.
In response to the lien, TSCC 2890 brought a motion for summary judgment, asking the court to declare E-Tech’s lien expired and to remove the condominium corporation from the legal action altogether. The motion was heard by Associate Justice C. Wiebe on August 7, 2025. TSCC 2890 advanced several arguments, chief among them that it was a “home buyer” as defined by the Construction Act. This status is significant because the Act explicitly states that a construction lien does not attach to the interest of a home buyer, providing a powerful protection for individuals purchasing new homes.
To qualify as a “home buyer” for a condominium unit, a purchaser must meet specific criteria defined in the Act. The definition of a “home” includes not only the dwelling unit itself but also “the common elements appurtenant thereto.” The purchaser must not have paid more than 30 percent of the purchase price before the conveyance, a condition that TSCC 2890 met due to the vendor-take-back mortgage arrangement. The second critical requirement is that the home is not conveyed until it is ready for occupancy, which must be evidenced by either a certificate of completion and possession under the Ontario New Home Warranties Plan Act or a municipal permit authorizing occupancy.
The case turned on this second requirement. TSCC 2890 provided a City of Toronto Occupancy Permit issued on February 9, 2022, five days after the condominium was registered. While the permit did authorize the occupancy of Suites 201 and 202, it contained a crucial list of exclusions. The permit explicitly stated that occupancy was granted for the suites “but excluding their balconies.” It further excluded a long list of common areas on the second floor, the same floor where the guest suites are located. These unfinished areas included two amenity spaces, a yoga room, an exercise room, the corridor, a closet, storage rooms, change rooms, saunas, and several washrooms.
Associate Justice Wiebe found that this partial permit was insufficient to meet the Act’s requirements. In his reasons for decision, he emphasized that the statutory definition of a “home” explicitly includes the appurtenant common elements. Because the occupancy permit excluded these critical common elements, it could not be said that the “home” was ready for occupancy at the time of conveyance. The judge noted that this interpretation was a matter of common sense, questioning how one could fully occupy a condominium unit without access to its balcony or even the corridor needed to reach it. He distinguished the situation from a previous case, Kostolnik v. Vanbots Construction Corp., where an occupancy certificate was deemed valid because it authorized occupancy of the “complete building.” The permit in the E-Tech case was, by contrast, a partial one. Evidence from a property manager attesting that board members believed the suites were ready for occupancy was dismissed as hearsay and irrelevant to the legal definition. Based on this analysis, the court made a definitive finding that TSCC 2890 was not a “home buyer.”
TSCC 2890 also argued that even if it was not a home buyer, the lien could not attach because it was not an “owner” under the Construction Act. The Act defines an “owner” as a person with an interest in the property at whose request, on whose behalf, with whose consent, or for whose direct benefit an improvement is made. The condominium corporation asserted in its court filings that it had never requested any of the work performed by E-Tech.
On this issue, the court found the evidence to be contradictory and unclear. Claudio Foglia, the Vice-President of E-Tech, provided an affidavit stating that the company had supplied and installed electrical systems and fixtures in the guest suites and common areas at the request of TSCC 2890 both before and after the suites were conveyed, and that the corporation had benefited from this work. In response, an affidavit from Aron Lee, an employee of the property management company, stated this was false. Mr. Lee recounted conversations with two board members who allegedly confirmed they had no direct dealings with E-Tech and were unaware of any services supplied to the suites after May 2, 2022.
Associate Justice Wiebe determined that this conflicting evidence created a genuine issue requiring a trial. He noted that the evidence from Mr. Lee was hearsay and lacked credibility, and it was not clear if other board members may have had dealings with the developer or E-Tech. Furthermore, the evidence did not fully address the period before the suites were conveyed. Since the parties had not been cross-examined on their affidavits, the court found that TSCC 2890, as the party bringing the motion, had failed to prove there was no triable issue.
Finally, counsel for TSCC 2890 argued that E-Tech’s alternative claim for unjust enrichment and quantum meruit should be struck from its statement of claim. This legal doctrine allows for payment for services rendered even in the absence of a formal contract, to prevent one party from being unfairly enriched at another’s expense. The condominium corporation’s lawyer argued such a claim was improper in a construction lien action.
The court also rejected this argument. Associate Justice Wiebe clarified that claims for unjust enrichment are not automatically prohibited in construction lien cases. He pointed out that they can be valid where evidence suggests there were contract-like dealings between parties that did not result in a binding contract. While noting that E-Tech’s claim was “inelegantly drafted,” he found that the disputed evidence concerning dealings between E-Tech and TSCC 2890 was sufficient to allow the alternative claim to proceed to trial.
As a result of these findings, the court denied TSCC 2890’s motion for summary judgment in its entirety. The condominium corporation will remain a defendant in the lawsuit, and the construction lien registered by E-Tech against its guest suites remains in place pending a full trial. E-Tech, as the successful party on the motion, was deemed to be entitled to its legal costs. The judge encouraged the parties to resolve the issue of costs amongst themselves, but set out a schedule for written submissions if they are unable to reach an agreement.
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