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CONDOMINIUM DOCUMENTS

JULY 1, 1996

DISCLOSURE STATEMENT

THE TOWNHOMES OF WALNUT LANE

The Disclosure Statement and accompanying documentation is being provided by COMMERCIAL DEVCO INC. (the
"Declarant") with respect to the proposed condominium development to be known as "THE TOWNHOMES OF WALNUT
LANE" (the "Project") in accordance with the Condominium Act R.S.O. 1990, c.C.26 as amended (the "Act").

Accompanying the Disclosure Statement are the following documents:

1. The Budget Statement for the one year period immediately following the registration of the Declaration and
Description;

2. The Condominium Corporation's (the "Corporation") proposed Declaration.

3. The Corporation's proposed By-law No. 1.

4. The Corporation's proposed By-law No. 2.

5. The Corporation's proposed Rules.

6. The proposed Insurance Trust Agreement.

7. The proposed Management Agreement.

8. The proposed draft plan of condominium.

In accordance with Section 52(2) of the Act, any purchaser, before receiving delivery of a Transfer/Deed of
his unit, may rescind the Agreement of Purchase and Sale within ten (10) days after receiving the disclosure statement, or,
where there has been a material amendment thereto, within ten (10) days after receiving the amendment. Please be sure to
review this document with your legal advisors within the statutory time limitations..

June, 1996
DISCLOSURE STATEMENT

THE TOWNHOMES OF WALNUT LANE

I. NAME AND MUNICIPAL ADDRESS OF DECLARANT

COMMERCIAL DEVCO INC.


170 THE DONWAY WEST
Suite 307
Don Mills, Ontario
X3C 2G3

II. MUNICIPAL ADDRESS OF THE PROPERTY

The Project is to be located at 1735 Walnut Lane, Pickering, Ontario. Units in the proposed condominium will be given number
designations in accordance with their unit designations. The condominium corporation to be created upon the registration of the
declaration and description will hereinafter be referred to as "the Condominium", "the Corporation" or "the Project",, or the
"Community".

III. GENERAL DESCRIPTION OF THE PROJECT

A. THE LEGAL DESCRIPTION OF THE PROJECT

The Property upon which the residential condominium will


be constructed is located in the Town of Pickering, in the Regional municipality of Durham, described as Part of Lots 8, 9 and 10,
Registered Plan 489 save and except Parts 1, 2 and 3, on Plan RD96, Town of Pickering, Regional Municipality of Durham,
registered in the Land Registry Office for the Registry Division of Durham (No. 40) (the "Property"). The Property is presently
within the Registry System and a first application for registration pursuant to the Land Titles Act (Ontario) will be completed prior
to registration of the Condominium. The legal description is more particularly described in Schedule "All attached to the proposed
Declaration.

B. PROPOSED TYPES AND NUMBER OF BUILDINGS AND UNITS

The Declarant proposes to construct a condominium


consisting of four (4) 2 and 3 storey townhouse buildings
(collectively, the "Buildings").

1. The proposed Project will consist of:

a) Forty-one (41) residential units (collectively, the "Residential Unit(s)" or "Unit(s)") The Declarant proposes
to construct several different models of townhouses including 3 1-bedroom Units, 9 2-bedroom Units, 12
3-bedroom Units, 10 2-bedroom plus den Units and 7 3-bedroom plus den or family room Units. The
Declarant reserves the right to change the unit mix, as same will be dependent on the choices made by
individuals at the time of
purchase. Each townhouse will have a garage for the parking of one (1) motor vehicle and one (1)
driveway;

b) Thirteen (13) parking spaces, one (1) of which will be designated as handicapped parking, located on Level 1,
which will constitute common elements for use by visitors; and

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C) All rights, rights of way and easements through and over those portions of the Buildings necessary
for the supply of all utilities and services.

2. Purchaser’s are advised that:

a) All measurements are calculated in accordance with the standards established by the Ontario New
Home Warranty Program;

b) The Declarant shall have the right to change the style configuration, setbacks, elevation, and/or the
Unit mix as set out in Article III B(1) (a) at its sole discretion; provided however that the
Purchaser's Residential Unit shall not be altered and provided further that the Purchaser's
proportionate contribution to common expenses as set out in the Declaration shall not be
altered. In the event of such alteration or changes, the proposed condominium documentation
shall be amended accordingly;

C) Some units may contain gas burning fireplaces.

C. RECREATIONAL AND OTHER AMENITIES

1. FACILITIES

The Declarant intends to provide the following facilities


for the sole use and enjoyment of the Unit Owners, Residents, guests and visitors to the Units:

a) two (2) landscaped pedestrian entranceways to the


Community. A portion of the landscaped pedestrian entranceway at the south west corner of the
Property, shown on the Draft Plan of Condominium as a "landscaped corner" belongs to the Town of
Pickering and falls outside the boundaries of the proposed Condominium. It is anticipated that a Site
Plan Agreement may require that the Condominium Corporation be responsible for the maintenance (ie
grass cutting, watering, etc.) of this area and if so, the Declaration will be amended to reflect this
responsibility;

b) a children's play area with children's play equipment.


The children's play area will be unsupervised. The location and extent of the children's play equipment
shall be at the sole discretion of the Declarant;

C) landscaped open space area adjacent to the children's play area;

d) a super mailbox for receipt of mail delivery.

None of the amenities listed above are presently completed, but it is anticipated that construction of same will
commence in October, 1996, and it is anticipated that same will be completed in May, 1997, weather conditions
permitting. Notwithstanding the foregoing, completion of the facilities above will occur within twelve (12)
months following registration of the condominium.

D. DIVISION AND COMPOSITION OF THE PROJECT

Delivered to each Purchaser with this Disclosure Statement is a reduced copy of the
draft plan of condominium, which lays out the lands owned or to be owned by the Declarant upon which the
proposed Condominium is to be constructed. The draft plan of condominium is intended to give purchasers an
overview of the

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Condominium and the location of the Units. The actual location of streets, buildings and other structures may be altered
and/or revised to comply with final site plan and other approvals from the Town of Pickering and other appropriate
governmental authorities.

The Project is bounded to the north and east by existing residential housing; to the south by Kingston
Road and to the west by Walnut Lane.

IV. EASEMENTS

The Corporation will be subject to and entitled to various easements and/or rights of way to ensure full access to
services and pedestrian and vehicular access. At the time of preparation of this Disclosure Statement, the actual
locations of all of the proposed easements have not been finally determined. The proposed easements anticipated to be
registered are more particularly described in Schedule "All to the Declaration and the draft reference plan noting the
location thereof, however, the easements are subject to change, pending final determination and location of services and
access rights.

V. ROAD WIDENING

Purchasers are advised that Kingston Road is under the jurisdiction of the Regional Municipality of Durham which has
stated an intention to signalize the intersection of Walnut Lane and Kingston Road when traffic demands warrant the
same. To accommodate the signalization, a 1190 degree" intersection at Walnut Lane will have to be constructed. In
that respect, a triangular portion of the Common Elements and boulevard of Walnut Lane adjacent to Unit 5 will be
utilized by the Region for the road widening and boulevard of Walnut Lane. It is proposed that this conveyance of lands
by the Declarant in favour of the Regional Municipality of Durham will be undertaken prior to registration. It is not
anticipated that there will be any cost to the Corporation in this regard.

VI. BLOCKS OF UNITS KARKETED TO INVESTORS

The Declarant reserves the right to market Units in blocks to investors, but has no present intention of doing so. No
restriction has been placed on the number of Units that may be purchased by an individual or a corporation. The
Declarant cannot and will not restrict the right of purchasers to lease Units in the Project following registration of the
proposed Condominium, however the Declarant may impose conditions on leasing or may prohibit leasing of Units
during the period such Units are ready for occupancy but prior to title being transferred to purchasers.

Vii. CHECK METERING

(a) Due to the requirements of the Town of Pickering and/or the Regional Municipality of Durham, water
consumption will not be separately metered for the Residential Units. Accordingly, these rates are bulk
metered to the Corporation as a whole, initially paid in bulk by the corporation and will be recoverable
from the owners in addition to their contribution towards common expenses. The Declarant or the
Corporation may install private individual check meters in each Unit.

(b) Each Owner shall be responsible to pay the costs of the metered utility service supplied to his Unit as
determined by the Board based on the amount of such utility service supplied as determined by the said
meter for his Unit and such payment will not be credited against his obligation to pay common
expenses.
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(c) Any monies owing for utility service usage metered by such check meters shall be a debt
owed by the Owner of the Unit whose occupants have used such utility service and
shall be collectable as if the same were common expenses in arrears and for such
purposes only shall be considered common expenses. Payment to the Corporation
shall be made in such manner and with such frequency as determined by the Board
from time to time acting reasonably. Interest will accrue on arrears of money owing
for utility service usage at the same rate as interest accrues on arrears of common
expense payments.

(d) As a condition of being supplied or continuing to be supplied with any utility that is check
metered as aforesaid, the Corporation has the right to require an owner to maintain a
deposit with the Corporation of an amount equal to one month's common expense
fees for such utilities as determined by the Corporation. The Corporation is entitled
to apply such deposits against monies owing by a defaulting owner on account of the
supply of any utility.

(e) The Corporation shall be entitled, subject to complying with all other laws and
regulations, to stop the supply of any utility service to any Unit where the payments
owing for same are more than thirty (30) days in arrears. Entry to Units from time to
time by any municipal or public utility representative or other personnel authorized
by the Corporation for the purposes of installation, repair, maintenance and the
reading of meters is hereby authorized. Such work as is required within the Unit or
its appurtenant common elements as is necessary in order to facilitate the usage and
operation of any meter is also permitted.

VIII. BRIEF NARRATIVE DESCRIPTION OF THE SIGNIFICANT FEATURES OF THE


PROPOSED DECLARATION, BY-LAWS, RULES AND CONTRACTS

The following is a brief narrative description of the significant features of the proposed Declaration,
By-laws and rules (the "Rules") of the Corporation governing the use of the common elements and
Units, together with any contracts or leases subject to termination or expiration under Section 39 of
the Act. The following description is not meant to be exhaustive nor comprehensive and does not
contain a full summary of all of the provisions of the various documents, but rather, is prepared for
purposes of providing a brief narrative description of the significant features of these documents.
Reference should be made to the actual documents (attached) for a complete understanding of the
provisions contained therein.

A. PROPOSED DECLARATION

The proposed Declaration is a document pursuant to which the Condominium Corporation


(the
"Corporation") is created and contains the definitions of the terms used in the Declaration and
By-laws and other pertinent provisions relating to the Corporation as summarized below:

1. BOUNDARIES OF UNITS
The boundaries of the Units are described in Schedule "Cog to the Declaration, however, the
boundaries may be altered as required by the surveyor subject to final construction. Generally,
subject to the following, each Unit shall include both the dwelling structure and garage structure, and
all

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front, rear and side yards, where applicable. Each Residential Unit shall include all construction materials associated
therewith including, but not limited to, all concrete/concrete block or masonry portions of load bearing walls or
footings, all floor and roof assemblies and all exterior or interior walls, doors or windows. Each Residential Unit shall
also include all pipes, wires, cables, conduits, ducts, mechanical or similar apparatus, heating and air-conditioning
equipment (if applicable) , and those portions of the water, storm, sanitary and natural gas services extending from the
shut-off valve or main line tee, that provide services to that particular Residential Unit only. This includes any fixture,
outlet or other facility with respect to any such service or utility that is within the boundaries of the Residential Unit and
that services the Residential Unit only, provided that outlets and other facilities provided by the supplier of cable
television and telephone service may be owned by the supplier of such services. Each Residential Unit shall also
include any landscaping features including, but not limited to, sod, planting (if applicable), driveways, walkways,
retaining walls, patios, decks, and privacy screens or fences (or portions thereof, contained within the aforementioned
Residential Unit boundaries).

With respect to Residential Units 5 and 6, Level 1, the Residential Units shall include the roof terrace,
including, but not limited to the roof terrace decking materials, waterproof membrane, wood sheathing, sleepers, wood
decking floor planks, and railings.

Provided that each Residential Unit shall include the entire dwelling and garage structure, but shall
exclude all roof sheathing, roof shingles (coverings), and flashings. Notwithstanding anything hereinbefore provided to
the contrary, each Residential Unit shall exclude all eavestroughs, storm drainage downspouts, pipes, weeping tiles,
wires, cables, conduits, ducts, shafts, public utility line used for power, hydro meters, television cable, telephone cable,
gas line, gas meters, water line, storm and sanitary sewer lines, fire hydrants, pad or blast walls, street lighting fixtures '
transformers, transformer vaults, catchbasins, manholes, shut-off valve or main line tee etc. that supply any service to
more than one Residential Unit or to the common elements, that may lie within the boundaries of any particular
Residential Unit but which does not exclusively service that particular Residential Unit.

2. COMMON INTEREST ALLOCATION AND CONTRIBUTION TO COMMON EXPENSES

a) Each Owner of a Residential Unit shall have an undivided interest in the common elements as a
tenant in common with all other Owners in the proportions set forth in Schedule I'D"; and

b) Each Owner of a Residential Unit must also contribute to the Corporation its share of the common
expenses in accordance with the percentage allocated to each respective Unit in Schedule I'D"
to the Declaration. The assessment and collection
of common expenses is regulated by the Corporation's board of directors (the "Board") in
accordance with the provisions of the Declaration and By-laws. Failure to pay common
expenses when due may result in a lien being f iled against the Unit, which lien may be
enforced in the same manner as a mortgage.

2. ADDRESS FOR SERVICES AND MAILING ADDRESS


The address for service for the proposed Corporation will initially be the municipal address of the
Property and thereafter such other address as the Board may determine from time to time.
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4. COMMON EXPENSE ALLOCATION AND RESERVE FUND

a) Common expenses constitute the costs of performing the objects and duties of the Corporation, including but
not limited to those costs and expenses which are in one fully set out in Schedule
"El' to the Declaration. Common expenses of the Corporation shall include the costs and expenses
incurred for landscaping services to the common elements (Unit Owners shall be responsible to maintain
their front, rear and side yards (as applicable)including grass cutting and snow removal), water and hydro
serving this Condominium's common elements and Units (subject to subparagraph (b) hereof), street
lighting, snow removal from common element roadways and visitor parking, snowplowing and
salting/sanding of the common element sidewalks only (but excluding driveways and walkways of
Units), maintenance materials and equipment, furnishing of the common elements, parking control, if
any, professional services and insurance trustee fees, fidelity bonds and the cost of insurance premiums
other than the Unit Owners' insurance and the cost of borrowing money for the purposes of carrying out
the objects of the Corporation. Common expenses shall also include each Owner's required contribution
to a reserve fund, to be established for the major repair and replacement of the Corporation's common
elements and other assets. Since each Unit includes all structural components of each dwelling (save as
provided for in Schedule 'IC" to the Declaration) there will be no reserve fund established for the repair
and replacement of the dwelling. Save as provided for in the Declaration, each owner shall be
responsible for all aspects of the repair, replacement and maintenance of his Unit.
b) It should be noted that all hydro, gas and/or heating costs for all Units are not included in the
Common Expenses and are separately metered. Water shall be bulk metered to the Corporation as a
whole and will be recoverable from Unit Owners in addition to their monthly common expenses as
provided for in Article VII of this DisclosureStatement. Please see the Budget Statement for further
details;

c) Removal of snow and salting and sanding of driveways and sidewalks and landscaping
maintenance of front, rear and side yards and patios, where applicable, and with respect to Units, 19 to 25
inclusive on Level 1 the common element areas adjacent thereto at the rear of the unit, will not be
performed by the Corporation and are the responsibility of each owner; and

d) Each prospective purchaser should examine the proposed budget of the Corporation to ascertain
the nature and extent of such costs.

5. COMMON ELEMENTS

Subject to certain restrictions, (including provisions in respect of the common elements adjacent to the
side and rear of the Unit to be used by permitted owners and others for access to and egress from the rear,
if applicable, side yard areas of units) each Owner of a Unit has the full use, occupancy and enjoyment of
the common elements;
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b) No Owner shall make any change to an installation upon the common elements, or maintain, decorate,
alter or repair any part of the common elements except for maintaining those parts of the common
elements which he has a duty to maintain, without obtaining the prior written approval of the
Corporation;

c) The use of the common elements is subject to the general provisions of the Declaration, By
laws and Rules;

d) No animals, livestock or fowl other than two (2) pets per Unit, as permitted pursuant to
Article IV of the Declaration, are permitted to be on or about the Common Elements except
for ingress to and egress from a Unit. All dogs and cats must be kept under personal
supervision and control and held by leash at all times during ingress to and egress from a
Unit or while on the common elements. Notwithstanding the generality of the foregoing, no
attack dogs are permitted on or about the common elements;

c) The Declarant shall be entitled to maintain a sales office and to erect and maintain signs for
marketing/sales purposes upon the common elements, and within or outside any unsold Unit, pursuant to
the Declarant's ongoing marketing process in respect of the Corporation, at suchlocations and having
such dimensions as the Declarant may determine in its sole discretion;

d) The Declarant is permitted to complete the Buildings and all improvements to the Property,
maintain Units as models for display and sale purposes, and otherwise maintain construction offices, sales
offices, displays and signs for the Project, until registered title to all Units has been transferred by the
Declarant;

e) Following registration of the Corporation, unsold Units may be used as temporary model suites for sales
purposes, and the Declarant, its sales staff and their respective invitees shall be entitled to use the
common elements for access to and egress from said model suites and other unsold Units including the
use of visitor parking. The Declarant shall be entitled to maintain such model suites until registered title
to all Residential Units have been transferred by the Declarant; and

f) Thirteen (13) parking spaces located on the surface shall form part of the common elements one
(1) of which will be designated as handicapped parking, for use by visitors. These parking spaces may
not be leased or sold to any owner or otherwise assigned. Such parking spaces shall be used and
occupied only for the parking of motor vehicles as may be defined from time to time in the Rules.

6. EXCLUSIVE USE COMMON ELEMENTS


The Owners of Units 5, 6 and 7, Level 1 shall have the exclusive use of a
landscaped area near the street fronting Unit 7,

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Level 1 f or the temporary storage of garbage on garbage pick up days.

7. OCCUPATION AND USE OF UNITS

a) Each Residential Unit shall be occupied and used only for residential purposes as are permitted by
the relevant zoning by-laws of the local municipality and for no other purpose. The Declarant
may without being required to pay any compensation, maintain Units as models for display and
sale purposes, and otherwise maintain construction of f ices, displays and signs f or the Project
until registered title to all Units in the Corporation have been transferred by the Declarant. No
structural change or structural alterations, other than by the Declarant for sales purposes is
permitted and no alteration or any decoration visible from the exterior of the Unit is permitted
without the prior consent in writing of the Board;

b) No animals, livestock or f owl other than two (2) pets per Unit, as permitted pursuant to Article IV of
the Declaration, are permitted to be kept or are allowed in any Unit. No pet that is deemed by
the Board, or the property manager in their absolute discretion, to be a nuisance shall be kept in
any Unit. No breeding of animals is allowed. Notwithstanding the generality of the
foregoing, no attack dogs will be permitted to be kept or allowed in any Units;

e) No owner shall install any fencing, shed, privacy screen or deck without the prior
approval of any governmental authority having jurisdiction there with where applicable and
without the prior written consent of the Board, which consent shall not be unreasonably or
arbitrarily withheld. In order to maintain the uniform appearance of the Development and to
ensure compliance with all municipal building and zoning restrictions, the Board shall have the
right to prescribe the height, type and colour of all fencing, sheds, privacy screens or decks
proposed to be constructed by an owner on the lands comprising part of his Unit;

d) If any Owner constructs or installs any fixture, improvement or other installation in, to or on
his unit, he shall be responsible for the cost of removing and replacing same should it be
necessary for the maintenance or repair of any unit or common Elements;

e) No exterior aerial or antenna is permitted on the Property without the prior written consent of
the Board of Directors, which consent may be unreasonably withheld. No satellite dish other
than a satellite dish with a diameter of twenty (2011) inches or less is permitted on the Property
without the prior written consent of the Board of Directors which consent shall not be
unreasonably withheld.

f) No portable or window air conditioners shall be placed or installed on the outside of window
sills or projections. owners may install a central air conditioning unit provided that written
consent of the board thereto is first obtained (not to be unreasonably withheld) including
approval of the
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location of the installation, the size and type of central air-conditioning unit to be installed and
approval of the method and manner of installation. Any unit owner who installs an
air-conditioning unit as aforesaid shall be solely responsible at his sole cost and expense for the
maintenance and repair of same and shall indemnify and save the Corporation harmless from
and against any and all costs, expenses, damage claims or liabilities which the Corporation may
incur or suffer as a result of or in connection with the installation and/or operation of such unit.
Unit Owners are required to ensure that adequate measures will be taken to minimize noise and
vibration which could disturb any other owner arising from the installation and/or operation of
the air-conditioning unit.

g) Any Owners who do or permit anything to be done in the Unit and/or common elements that will
increase the insurance premiums obtained by the Corporation shall be responsible for the
increase in such premiums and that such amounts are recoverable in the same manner as
common expenses;

h) If the Board determines that any noise being transmitted to another Unit is a nuisance, the Owner of
such Unit shall at his expense rectify such noise to the satisfaction of the Board. if such Owner
fails to do so, the Board will take such necessary steps to abate the noise and the Owner shall
be liable to the Corporation for all expenses incurred therein including solicitors fees;

i) There shall be no alteration, addition or removal of any boundary, load bearing or partition wall, roof
assembly, floor, ceiling, exterior door or
window, heating, plumbing or electrical installation contained in or forming part of the Unit
without the prior written consent of the Board, which consent shall not be unreasonably
withheld;

j) No sign, advertisement or notice of any type shall be inscribed, painted, affixed or displayed on any
part of the inside or outside of any Unit;

k) Each Owner shall comply and shall require all members of his family, residents, guests and visitors
to his unit to comply with the Act, the Declaration, the By-laws and the Rules.

8. LEASING OF UNITS

No Owner shall be entitled to lease any Unit unless a covenant obliging the tenant to
comply with the Act, the Declaration, the By-laws and the Rules, in the form prescribed in the
Declaration or in the Rules from time to time, is first delivered to the Corporation. A tenant, who has
been notified by the Condominium that his landlord/Unit Owner is in default of payment of common
expenses, is obliged to pay such common expenses and deduct same from the rent ordinarily payable to
such Owner. No owner is released from any of his obligations with respect to the Unit as a consequence
of any such lease entered into.

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9. REPAIRS AND MAINTENANCE OF UNITS

(a) Each Owner shall maintain his/her Unit, and subject to the provisions of the Declaration, each owner shall
repair his/her Unit after damage and all improvements and betterments made or acquired by an owner,
all at his/her own expense. Each Owner shall be responsible for all damages to any and all other Units
and the common elements which are caused by the failure of the Owner or those for whom the owner is
responsible to so maintain and repair the Unit. In addition, without limiting the generality of the
foregoing, each owner shall maintain and repair:

(i) any system, appliance or fixture that serves his own Unit including the heating, air-conditioning (if
applicable), ventilation and electrical systems, including regularly scheduled inspections of all such
equipment;

(ii) plumbing systems, toilets, bathtubs, sinks, tiles, shower fans, ceiling and exhaust fans and fan motors, and
other fixtures;

(iii) all pipes, wires, cables, conduits, ducts, meters or similar apparatus used for electricity, cable television,
telephone, water, storm and sanitary sewers to the main line tee and which are located within the
boundaries of and service only the Unit;
(iv) all walls, windows, screens, doors, steps, decks, balconies, privacy fences/screens and structural
components of the Unit;

(v) all interior and exterior light fixtures;

(vi) front yards, rear yards, and side yards and patios, where applicable and with respect to
Units 19 - 25 inclusive on Level 1 the common element areas adjacent thereto at the rear of the said
Units, landscaping and driveways, in a clean and sightly condition, including without limitation, snow
removal from sidewalks, driveways and stairways notwithstanding that the Corporation may provide for
the maintenance and repair of same;

(vii) the roof assembly up to the underside of the roof sheathing, but shall not be responsible for the roof
sheathing, covering and flashings;

(viii) all improvements or additions made to the foregoing;

(ix) gas fireplaces, if applicable provided only service personnel certified to maintain and repair gas appliances
shall be permitted.

(b) The Corporation shall conduct such maintenance and make any repairs that an owner is obligated to make
and that he does not make within a reasonable time and charge the cost thereof to the Unit owner,
including any legal or collection costs incurred by the Corporation to collect the costs of such
maintenance and repairs, and all such sums of money shall bear interest at a rate of eighteen (18%)
percent per annum and that such amounts are deemed to be part of the common expenses and are
recoverable as such.

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(c) Each owner shall have the right to enter on the Property comprising part of an adjoining Unit, on reasonable
notice, for the purpose of maintaining and repairing his Unit.

10. REPAIRS AND MAINTENANCE BY THE CORPORATION

The Corporation shall maintain and repair the common elements at its own expense. However the
Corporation shall not be responsible for those parts of the common elements which are required to be
maintained and repaired by the owners. The Corporation shall be permitted access to any Units in order
to inspect, repair or maintain the Common Elements and the utilities, whether or not such utilities may
be located within the Common Elements.

11. INDEMNIFICATION

Each Owner shall indemnify and save harmless the Corporation from and against any loss, cost,
damage, injury or liability whatsoever which the Corporation may incur caused by an act or omission of
such Owner, his family, guests, visitors or tenants to or with respect to the common elements and/or all
other Units except for any loss, costs or liability insured against by the Corporation.

12. TERMINATION

The Corporation shall, within twenty (20) days after determination that there has been substantial
damage to twenty-f ive (25%) percent of the Buildings, give to all owners and to all mortgagees notice
of termination and a meeting of all owners is to be held within sixty (60) days after the determination
for the purpose of allowing the owners to vote for termination.

13. INSURANCE

a) The Corporation is required to obtain and maintain "all risks" insurance coverage for the common elements
and Units (but excluding improvements and betterments made or acquired by a Unit Owner) in an
amount equal to the full
replacement cost thereof. The Corporation is also required to obtain insurance against damage to
personal property owned by the Corporation, but not including furnishings, furniture or other personal
property supplied or installed by the Unit Owners, in an amount equal to the replacement cost thereof.
In addition the Corporation is obligated to maintain public liability and property damage insurance in an
amount not less than one Million ($1,000,000.00) Dollars per occurrence and insurance against the
Corporation’s liability resulting from breach of duty as occupier of the common elements; and

b) The insurance to be obtained and maintained by the Corporation does not include insurance on the
improvements or betterments made by an Owner to his Unit and does not include insurance for
furnishings, fixtures ‘ equipment, decorating and personal property and chattels of a Unit Owner. The
Corporation assumes no obligation with respect to insurance which may be obtained and maintained by
an Owner and each Owner is advised to enquire as to additional insurance coverage that may be
required by him from his insurance adviser.
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14. INSURANCE TRUSTEE AND PROCEEDS OF INSURANCE

In accordance with the provisions of the Declaration and By-law No. 1, the Corporation shall enter into an
agreement with a trust company registered under the Loan and Trust Corporations Act or a chartered bank to act
as trustee to receive all insurance proceeds in excess of Twenty Five Thousand Dollars ($25,000.00) in the
event of damage to the Buildings, which proceeds are to be utilized either in payment of repairs and
reconstruction if such is appropriate, or in the alternative, to be distributed amongst those entitled thereto if the
Buildings are not repaired or rebuilt. In the event that such trust company or chartered bank refuses to act, the
Corporation may enter into such agreement with such other Corporation authorized to act as a trustee as the
Owners may approve by By-law at a meeting called for that purpose.

15. GENERAL MATTERS AND ADMINISTRATION

a) The Corporation, any insurer, their respective agent or any other person authorized by the Board is
entitled to enter any Unit, at all reasonable times, upon reasonable notice, in order to perform the
objects and duties of the Corporation and without limitation, to make inspections, adjust losses, make
repairs, correct any conditions which violate the provisions of a policy or policies of insurance, remedy
any condition which might result in damage to the property or carry out any duty imposed upon the
Corporation. Notwithstanding the rights of entry, the Corporation assumes no responsibility or liability
whatsoever for the care or supervision of any Unit except as specifically provided in the Declaration or
the Bylaws. The Corporation shall retain a key to all locks to each Unit to facilitate access, if required.
No Owner shall change any lock or place any additional locks to the doors to any Unit or the Unit or to
the garage or any part of the common elements of which such Owner has exclusive use, without
immediately providing to the Corporation a key for each new or changed lock;

b) In case of an emergency, an agent of the Corporation may enter a Unit anytime and without notice for
the purpose of repairing the Unit, common elements, or for the purpose of correcting any condition
which may result in damage or loss to the Property. The Corporation or anyone authorized by it may
determine whether an emergency exists;

c) A complete set of all the original as-built architectural and structural plans (if any) and
specifications for any additions, alterations or improvements from time to time made to the common
elements or to any Unit with the prior consent in writing of the Board shall be maintained by the
Corporation;

d) Each of the provisions of the Declaration shall be deemed independent and severable and the
invalidity or unenforceability in whole or in part of any one or more of such provisions therein shall not
be deemed to impair or affect the validity, enforceability or affect the remainder of the Declaration; and

e) The failure to take action to enforce any provision contained in the Act, the Declaration, the By-laws or any
Rules of the Corporation shall not constitute a waiver of the right to do so thereafter or be deemed to
abrogate or waive any such provision.

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The Declaration contains restrictions on the sale or lease of Units and Purchasers should review the Declaration
for a full understanding of these restrictions.

B. PROPOSED BY-LAWS

The proposed By-laws of the Corporation establish the administrative procedures to be followed in carrying out
the functions of the Corporation and are binding upon every Unit Owner. The proposed By-laws indicate, amongst
other things, how the Corporation will be organized and such things as how common expenses will be assessed from
time to time and how assessments are to be collected. The following is a brief synopsis of the By-laws in the proposed
Corporation. Purchasers should review the By-laws which form part of this Disclosure Statement for a full
understanding of the rights, obligations and provisions contained therein.

1. BY-LAW NO. I (GENERAL ORGANIZATION BY-LAW)

By-law No. 1 establishes the procedures and obligations


of the Corporation with respect to various administrative matters including the following:

a) Records

The Corporation shall maintain numerous documents, including without limitation financial
statements, minutes of all Board and Owner meetings; as-built architectural, mechanical, structural and
electrical plans; appraisal for insurance purposes" a list of all owners and mortgagees; a copy of the
Declaration, Description, By-laws and Rules; a copy of all resolutions passed by the Board; and a copy
of all consents for alterations to Units and/or common elements; a copy of all notices sent on behalf of
the Corporation; a copy of all reports and financial statements of the Corporation and table of
maintenance responsibilities.

b) Duties

The Corporation shall have numerous duties including maintaining and repairing common elements;
collecting common expense contributions; arranging for the supply of utilities; obtaining necessary
insurance; preparing the Corporation's budget; employing and dismissing necessary personnel;
maintaining and investing adequate reserve fund monies; calling and holding of meetings and enforcing
the Act, Declaration, Bylaws and Rules of the Corporation; establishing and maintaining adequate
reserve funds for the major repair or replacement of the common elements.

C) Meeting of Owners

The Corporation shall hold a general meeting of Owners annually upon not less than ten (10) days
notice to every Owner and mortgagee who has notified the Corporation of his/her entitlement to vote.
Not more than fifteen (15) months shall elapse between successive annual general meetings. A quorum
shall be thirty-three and one third percent (33 1/3%) of the Units present in person or by proxy. The
Board, any mortgagee of not less than f if teen (15%) of the Units or any group of Unit owners
representing not less than fifteen percent (15%) of the Units may call meetings of the Owners. owners
and
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mortgagees entered in the Corporation's records, the auditor of the Corporation, the directors and
officers of the Corporation and any other person entitled to vote may attend the meeting. Any other
person may be admitted only on the invitation of the chairman of the meeting or with the consent of
those present at the meeting. All voting is on the basis of one (1) vote per Residential Unit.

(d) Board of Directors

The Corporation shall be managed by the Board. The number of directors shall be three
of which two (2) shall constitute a quorum. Directors shall be at least eighteen (18)
years of age, not an undischarged bankrupt, and mentally competent to hold office.
Directors need not be Owners of Units. This By-law contains further provisions with
respect to calling of board meetings, conflict of interest, indemnification of directors and
officers, and filling of vacancies and removal of directors.
e) Officers

The Board shall elect from among its members a President and Secretary and may either elect or
appoint at its discretion a Vice-President, General Manager, Treasurer or other officer who need not be
members of the Board. The Board may by resolution remove any officer of the Corporation.

f) Banking

The Condominium Corporation shall bank with a trust company or bank designated by the Board from
time to time. All documents shall be executed as directed by the Board and in the absence of such
directors, by any two directors.

g) Fiscal Year

The financial year of the Corporation shall end on the 31st day of December in each year, or on such
other day as the Board by resolution may determine.

h) Management

The Board may retain a manager or management company to manage the affairs and assets of the
Corporation at such compensation and upon such terms and requirements as the Board may determine
from time to time.

i) Insurance Trustee

The Board may enter into an agreement with an Insurance Trustee respecting the insurance policies of
the Corporation.

j) Notice
The Corporation may give notice to anyone by personal delivery or mail to the address noted in the
Corporation's records. Any notice to be given to the Corporation or Board shall be sufficiently given if
mailed or delivered to the address for service of the Corporation.

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k) Assessment and Collection of Common Expenses

The Board is responsible for the preparation of a yearly budget and collection of common expenses. on
receipt of the budget, each Owner shall pay to the Corporation his/her proportionate share on the first
day of each month by way of twelve (12) postdated cheques or pre-authorized payment plan as directed
by the Board. Extraordinary expenditures not contemplated in the budget and f or which the Board
shall not have sufficient funds may be assessed at any time during the year by the Board serving notice
of such assessment on all Owners as an additional common expense. The notice shall include a written
statement setting out the reasons f or the assessment which shall be payable within ten (10) days after
the delivery thereof or within such further period of time or in such instalments as the Board may
determine. The Board also has the authority to levy special assessments. Arrears of payments shall
bear interest at the rate of eighteen percent (18%) per annum.

1) Liability of Owners

Unit Owners are responsible for all costs to repair damage to the common elements caused by the
Owner, his/her residents, tenants, or invited guests, whether deliberate, negligent or not. The Board
may enter any Unit in which a breach of the Act, Declaration, By-laws or Rules exists and may abate or
remove, at the expense of the Owner, any thing that may exist contrary to the meaning of the Act,
Declaration By-laws or Rules.

2. BY-LAW NO. 2 (BORROWING BY-LAW)

By-law No. 2 is the Borrowing By-law of the Corporation which permits the directors of the
Corporation to borrow money on the credit of the Corporation and to give security therefor on any of the assets of the
Corporation, however, any borrowing in excess of one (1) month's total contribution to Common Expenses for any one
occurrence shall require the approval of Owners owning a majority of the Units at a meeting duly called for that
purpose.

C. PROPOSED RULES

a) The Board may make Rules respecting the use of the common elements and Units or any of them to
promote the safety, security or welfare of the owners and of the Property or for the purpose of
preventing unreasonable interference with the use and enjoyment of the common elements and
of the other Units. The Rules are intended to be reasonable and consistent with the Act, the
Declaration and the By-laws and are to be complied with and enforced in the same manner as
the By-laws of the Corporation;

b) The Declarant intends to have the proposed Rules passed by the Board at the first meeting thereof
when the Declarant will still be the owner of one hundred (100%) per cent of the Units. The
Owners may at any time after a Rule becomes effective amend or repeal a Rule at a meeting of
owners duly called for that purpose in accordance with the Act; and

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C) The proposed Rules, among other things, govern and restrict the placing of signs, and include other
prohibitions designed to reduce the risk of overloading the plumbing and electrical systems, the
risk of fire and other casualty and are designed to reduce the likelihood of disturbing other
residents' use of their Units or interference with party walls or other structural aspects of the
Buildings. The Rules prohibit the erection of any radio or television antennae, aerial, satellite
dish or tower by any owner other than in accordance with the Declaration; set maintenance
standards for owners, and obligate all owners to obey all laws and by-laws, whether
parliamentary or municipal.

D. CONTRACTS SUBJECT TO TERMINATION PURSUANT TO S.39 OF THE ACT

l. MANAGEMENT AGREEMENT

a) The Corporation will enter into a Management Agreement with Studio Court Property Management Inc. (the
"Manager"), which may be a related company to the Declarant pursuant to which the Manager is to be
the sole and exclusive representative and managing agent of the Corporation, subject to overall control of
the Corporation, for a period of one (1) year from the date of registration of the Declaration. The duties
of the Manager are fully set out in the Management Agreement and do not include the duties of the
directors and officers of the Corporation as set forth in the By-laws unless specifically stated otherwise in
the Management Agreement. The Manager is entitled to act in the name of the Corporation in order to
carry out the Corporation's duties under the Declaration, the Act and the By-laws. The Manager will
collect and expend the common expenses and supply monthly statements and annual budgets;

b) The Corporation is to pay the Manager for its managerial services the sum as set out in the Budget during
the term of the Management Agreement. The Management Agreement may be terminated by the
Corporation pursuant to the provisions of Section 39 of the Act;

C) The duties of the Manager include enforcing the terms of the Declaration, By-laws and Rules; advising
owners of additional By-laws or Rules; advising the Board as to any additional By-laws or Rules which
should be established to assist in the operation of the Property; collecting and receiving monies payable
by the owners and depositing same into a trust account; utilizing such funds to make payments of
accounts including insurance, repairs and maintenance; attempting to collect delinquent accounts;
keeping accurate accounts and records of financial transactions involved in the management of the
Property; and

d) The Manager may engage a parent or subsidiary corporation or person affiliated to perform any work or
services for the Corporation subject to the restrictions set out in
the Management Agreement. Upon registration of the Declaration and thereafter prior to the beginning
of each f iscal year during the term of the Management Agreement, the Manager shall provide the Board
with an estimated budget for the following year.
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2. PROPOSED INSURANCE TRUST AGREEMENT

a) The corporation will enter into an Insurance Trust Agreement with a trust company registered under the
Loan and Trust Corporations Act or a chartered bank (the "Trustee") . The Trustee is to receive an
annual retainer fee payable on the anniversary date of the Agreement in each year during the term. In the
event the Trustee is required to administer any insurance proceeds, then it is entitled to an additional fee
being based on a percentage of the amount disbursed by it;

b) The Trustee is to hold all insurance proceeds in trust until it has received a certificate of certain officers
of the Corporation certifying that the Board has determined that less than twenty-five (25%) percent of
the Buildings have been substantially damaged or that the Board has determined that twenty-f ive (25%)
percent or more of the Buildings have been substantially damaged and that owners who own eighty
(80%) percent of the Units have not voted for termination within sixty (60) days of such determination
by the Board or that there was damage to the Property excluding the Buildings and the Units;

c) The Trustee shall not be responsible or liable for any loss, cost or damages which may
result f rom anything done or admitted to be done by such Trustee under the Insurance Trust Agreement
except in the case of negligence or bad faith; and

d) The Corporation shall have the sole and unrestricted right to terminate the Insurance Trust
Agreement by written notice to the Trustee if the Trustee refuses to act in which case the
Trustee shall turn over all sums deposited with it to a new Trustee as determined by the
Corporation. The Trustee may at any time resign f rom its duties by giving to the
Corporation at least sixty (60) days notice in writing.

3. TECHNICAL AUDIT

The Declarant shall arrange for an Agreement on behalf of the Corporation with an
independent engineering consultant to prepare a Technical Audit within one year immediately following
registration of the Declaration and the Description. The Technical Audit shall be conducted by
professional Consulting Engineers who shall make a thorough examination of the buildings and assess the
as-constructed condition of the various systems and components of the buildings in order to provide the
Corporation with a report on the buildings which will assist the Corporation in assessing repair and
Maintenance requirements and in preserving any rights which the Corporation may have under the
Ontario New Home Warranties Plan Act. The Declarant has negotiated a price for the Technical Audit
(the "Contract Price") which is included in the Budget.

The Corporation is not restricted to the consulting engineers contracted with or the Technical Audit to
be prepared as set out herein. However, in the event that the Corporation retains an alternate consulting engineer to
undertake the Technical Audit, at a higher cost than the Contract Price negotiated by the Declarant then, the Declarant
shall only be responsible for the amount of the Contract Price for the purposes of Section 52 of the Condominium Act
and any expenditure in excess of this stated amount shall be the sole responsibility of the Condominium Corporation.

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4. RESERVE FUND STUDY

The Declarant shall contract with an independent consultant for the preparation of a
Reserve Fund Study to be performed immediately following registration of the Declaration and Description, to ensure
that the Corporation maintains adequate Reserve Funds for major repair and replacement of Common Elements and
assets of the Corporation.
5. MISCELLANEOUS CONTRACTS

The Declarant Board may enter into contracts as required for the provision of services to the Project
including, cable television, hydro, water, gas, landscaping, snow removal, pest control, maintenance and disposal,
provision of supplies, cleaning services, insurance, accounting services, and other matters as may be required for the
orderly operation of the business of the corporation.

6. EXPIRY OF AGREEMENTS

In accordance with Section 39 of the Act, every agreement for the provision of services
on a continuing basis, every lease of the common elements, if any, for business purposes and every agreement for the
provision of recreation facilities to the Corporation on other than a non profit basis entered into by the Corporation at a
time when the majority of members of the Board were elected when the Declarant was the registered owner of a
majority of the Units that does not expire within twelve (12) months after its effective date shall be deemed to expire
twelve (12) months after its effective date,
(unless, within the twelve (12) months, the agreement is ratified by the Board at a time when
the majority of the Board members were elected after the Declarant ceased to be the registered owner of a majority of
the Units).

E. BUDGET STATEMENT

a) A Budget Statement for the one year period immediately following registration of the Declaration and the
Description forms part of this Disclosure Statement;

b) The assumed inflation factor, unless otherwise stated is four (4 %) per cent per annum. If registration of the
Declaration and Description occurs after July 31, 1997, then the Budget Statement may, at the option of
the Declarant, be increased by the assumed inflation factor in each year; and

c) As of the date of this Disclosure Statement, the Corporation has not been created and therefore there are no
judgments against the Corporation, no pending lawsuits to which the corporation is a party, and no
amounts in the Reserve Fund. There are no current or expected fees or charges to be paid by Unit
Owners or any of them for the use of common elements or part thereof and other facilities related to the
Property, other than as may be set out in the budget annexed to this Disclosure Statement. There are no
services not included in the budget that the proposed Declarant provides, or expenses that the proposed
Declarant pays and that might reasonably be expected to become, at any subsequent time, a common
expense. Please see the Budget Statement with respect to the supply of water to Units which will be
bulk metered to the Corporation but recoverable from Unit owners in accordance with their usage.

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F. MISCELLANEOUS MATTERS

1. Each Residential Unit has a provision for Cable Television and Bell Telephone. These services are to be
paid for directly by the Unit Owner.

2. The Project will be serviced by a super mailbox, and Purchasers are advised that Canada Post will not
deliver mail on a door to door basis.

3. All Units have duct work "sized" for future airconditioning to be installed at the expense of each Owner.
The location for installation of central air conditioning shall be a location as determined by the Declarant
prior to the date of registration of this Condominium and thereafter by the Board of Directors. A
provision regarding the repair and maintenance of the air-conditioner is contained in the Declaration.

4. Purchasers are advised that utility meters may be centralized and located on the exterior wall of certain end
units in accordance with the requirements and design of the applicable utility company. Alternatively,
each Unit may have its own utility meters on the exterior of the unit.

5. Purchasers are advised that despite the inclusion of noise control features in this
development, noise levels from increasing road traffic on Kingston Road, Walnut Lane
and Highway 401, and may continue to be of concern, occasionally interfering with some activities of the
dwelling occupants as the noise exposure level may exceed the noise guidelines of the municipality and
the Ministry of the Environment and Energy.

6. The Purchasers of Units 5, 6, 7, 18 and 19 on Level I are advised that patio noise barriers
(fences) will be constructed where required.

7. The Purchaser of Unit 7, Level 1 is advised that a landscaped defined area near the street
fronting Unit 7 will, on garbage pick up days, be used for the temporary drop off of garbage from Units 5,
6 and 7 on Level 1.

8. The Purchasers of Units 5 and 6 on Level 1 are advised that an ornamental architectural
bridge, forming part of the common elements and linking Units 5 and 6, Level 1 shall be affixed to the
exterior of the aforesaid units.

WARNING

This Disclosure Statement contains the general descriptions and brief narrative descriptions of
significant features as required by Section 52 of the Act. As the type and amount of disclosure required by the
Act is objective, some purchases may have special circumstances such that certain provisions contained in the
documents have significant importance to them on an individual basis, but have not been summarized as not
being significant to the average purchaser. Purchasers are therefore advised to read all of the documents enclosed
with this Disclosure Statement in their entirety and to review same with their legal and financial advisors.

It is strongly recommended that all of the accompanying documents be carefully reviewed by all
prospective Owners.