Owner’s Challenge to Special Assessment

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A unit owner recently brought an application to the court for an order declaring a notice of sale issued by a condominium under a lien null and void. The owner was also the condominium’s declarant. The declarant did not turn over the condominium to the owners when required by the Act or contribute to the common expenses for the units it still owned. Sound familiar?

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AGM: Apathy, Gossip and Mutiny

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The AGM is often the most important meeting of the year for a condominium. The AGM provides the owners with valuable information about the condominium’s affairs with presentations from the auditor, board, management, and other professionals. It also gives owners an opportunity to voice their concerns or ask general questions about issues that might be important to them, like upcoming repair projects, parking, or landscaping. Finally, the AGM allows owners to be involved in important decisions, such as electing directors or passing a new by-law.

Most AGMs go off without a hitch and everyone goes home happy and informed. Some, however, are long and arduous battles that leave people more confused than when they started. The battles are often caused by apathy, gossip or mutiny. Continue reading

Are emails between directors a record of the condominium? The CAT says…

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Can owners request copies of emails between directors? Can the condominium refuse a record request because the owner’s reason for requesting the records is apparently unrelated to their ownership interests? Must the owner prove their reason is related to their ownership interest, or is the onus on the condominium to prove the reason is unrelated to the owner’s interests? These are only a few of the questions recently answered by the Condominium Authority Tribunal (CAT).

Kai Sin Yeung v. Metropolitan Toronto Condominium Coporation No. 1136 

An owner requested emails related to the renewal of a gas contract referenced in board meeting minutes. The owner wanted a penalty and costs of the hearing. The condominium claimed that the emails do not exist, but even if they existed the owner would not be entitled to them. Continue reading

Condos in Trouble

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We’ve all heard the horror stories of condominiums with no money in their reserve accounts and significant repair projects that need to be completed. Work orders may have been issued by the municipality because the buildings are falling apart and becoming a danger to the occupants. At best, there are allegations of mismanagement by previous boards. At worst, there are allegations of fraud and theft. Many of the owners have defaulted in their contributions toward the common expenses and the condominium is unable to pay its contractors, which results in lawsuits due to unpaid bills. The local real estate agents know of the issues and the market values of the units plummet.

When the board attempts to fix some of these problems, such as levying special assessments, they often receive a requisition to remove them. The new board quickly changes managers, rescinds the special assessment, and lowers monthly fees. A requisition is received to remove the new board shortly after they are elected. Factions form and every issue creates further division among the owners. The problems are ignored or pushed aside while the groups fight for control.

So, what can be done in these terrible situations? The Act contains a few options to help condominiums get out of trouble. Continue reading

Condo Stats – Toronto & Area

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Earlier this year I posted updated statistics for the Grand River and Golden Horseshoe areas. Today, I’m focusing on Toronto and surrounding areas, including York, Peel and Durham.

As of August 8, 2017, Toronto had 2602 condominium corporations. Today, that number has grown to 2714. The last one registered is a 12 floor building with 642 units (about 180 of which appear to be parking or storage units).

As of August 8, 2017, York had 1240 condominium corporations. Today, that number is 1406! The last condominium registered has 372 units.

Peel had 1021 condominium corporations on August 8, 2017. As of today, Peel has 1054 condominium corporations. The last one registered is a mammoth with 975 units over 5 floors (in several buildings).

Finally, as of August 8, 2017, Durham had 285 condominium corporations. While it has the fewest condominium corporations, Durham continues to have impressive growth. It now has 308 condominium corporations. The last registered has 224 units.

As said in previous posts,  the total number is not the number of active condominiums. Some condominiums have been terminated or amalgamated so the “real” numbers are less than those above. I understand the CAO is working on obtaining a list of the “real” number so hopefully it will be able to start releasing statistics to the public soon.

That’s it for now.  Share this post and let me know what area you want statistics for next!

Voting: All condo units are not created equal

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As discussed in a post earlier this week, there has been some confusion as of late over the phrase “units in a corporation”. Does that mean all units? Only voting units? Owner-occupied units? Residential units? Fortunately, there is a section of the regulations that interprets the phrase. Continue reading

The Controversiality of the Voting Threshold: Borrowing By-laws

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Earlier this week, we blogged about the considerations and processes involved when a condominium determines there is a need for borrowing from a lender, inclusive of the requirement for a borrowing by-law. In this post, we discuss a recent case related to the passage of borrowing by-laws, which has created some controversy within the condominium industry.

LaFramboise v. York Condominium Corp. No. 365, 2019 CarswellOnt 680, dealt with a motion brought by an appointed administrator on behalf of a condominium corporation, seeking direction from the court as to whether a borrowing by-law had been passed at an owners’ meeting. Although there was little information provided on the particular circumstances that led to this application, it appears that some unit owners may have questioned the validity of a borrowing by-law that was passed at an owners’ meeting, resulting in the motion for direction to be filed by the condominium corporation’s administrator.

Based upon an interpretation of sections 50 and 53 of the Condominium Act, 1998 (“Act”), the Court appears to suggest that so long as a majority of all unit owners within a condominium are present at an owners’ meeting called to consider a borrowing by-law, a borrowing by-law can be successfully passed with the support of a majority of all unit owners present at the meeting rather than a majority of all units within the corporation.

Respectfully, the conclusions drawn from the interpretation of the Act in this case are contrary to the Act; specifically, section 56(10) of the Act.

56(10) of the Act unambiguously states that a by-law is not effective until:

“(a) the owners of a majority of the units in the corporation, or such other number of owners that is prescribed, vote in favour of confirming it, with or without amendment…”

Unless a lower voting threshold is prescribed in the regulations, section 56(10) of the Act makes it clear that a majority of the units in the corporation must vote in favour of a proposed by-law in order for it to pass, rather than the majority of units present at the meeting.

An often overlooked section of the regulations provides additional support for our position. Section 1.1(1) states that a reference to the portion of units in a corporation in the Act or regulations shall be interpreted as a reference to a portion of: a) owner-occupied units; b) units that are not s.49(3) units (i.e. parking, storage, facilities or mechanical installations); or c) all units in the corporation if all units are s.49(3) units and clause (a) does not apply. Subsection (2) specifically states that subsection 1.1(1) applies to section 56(10)(a) of the Act. Accordingly, subsection 56(10) requires a majority of units in the corporation that are not s.49(3) units unless all of the units are those type of units.

As noted above, the regulations do outline various by-laws that can be passed by a majority of the units present at a meeting rather than a majority of all units in a corporation; however, you will note that a borrowing by-law is not one of the prescribed by-laws that may be passed with the support of a majority of units present at a meeting [see section 14(2) of O. Reg. 48/01].

Below you will find a chart prepared by our firm which summarizes the by-laws that can be passed by a majority of units present at a meeting, pursuant to the regulations:

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Based upon the clear language in section 56(10) of the Act and the regulations, we cannot agree that a by-law can be passed with the support of a majority of those units present at an owners’ meeting called for that purpose (unless the regulations specifically permit for a lower voting threshold). Rather, in order for a by-law to pass, a majority of all units within the corporation must vote in favour of it.

Accordingly, despite the existence of this case, it would be prudent for condominium corporations to continue to receive the support of a majority of all units within the corporation when attempting to pass a by-law, unless the regulations clearly prescribe a lower voting threshold for that type of by-law.

To Borrow or Not to Borrow? How Does the Process Work: Borrowing By-laws

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We previously blogged about common myths regarding condominiums utilizing borrowing by-laws here https://ontcondolaw.com/2017/07/12/condo-financing-myths-debunked/

Condominiums have three ways to raise money

  1. Increasing monthly common expenses;
  2. Special assessment of owners; or
  3. Borrowing money from a lender.

As we noted condominiums typically use borrowing by-laws when they have to raise a substantial amount of money within a short period of time.

There can be a multitude of reasons a condominium may want to consider a borrowing by-law: an unexpected need to complete a major common elements repair/maintenance project before projected in the reserve fund, unexpected damage from a significant weather event (ex. the significant windstorm in southern Ontario in May 2018), or the desire to complete replacements related to a major common elements project (ex. installing new windows as part of a building envelope EIFS project). Continue reading

CAT says no to owner’s request to see email addresses

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The CAT released a decision confirming that owners are not entitled to receive email addresses provided by owners and mortgagees to the corporation. The case includes an interesting review of the relevant provisions of the Act and regulations related to the record of owners and mortgages and the exceptions to the right to examine records. The full case can be found on CanLii: https://www.canlii.org/en/on/oncat/doc/2019/2019oncat9/2019oncat9.html?resultIndex=3

Some highlights include: Continue reading

Kitec – Don’t Forget the Deadline to Submit a Claim

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It seems like many years since the Ontario Superior Court of Justice entered an Order for Approval of Class Action Settlement back on November 29, 2011 and the Kitec Settlement Agreement (“Kitec Settlement”) for defective plumbing systems became effective way back on January 9, 2012.

I suppose 7 years is a long time depending on how you look at things, especially as discussions about Kitec have also seemingly faded into the background at industry events in recent years as new hot button topics  such as amendments to the Condominium Act, 1998, cannabis legalization, and electronic vehicles have all arisen.

We last wrote about Kitec in March of 2017 reminding condominiums the first step should be to contact their engineer to determine if the condominium has a Kitec plumbing system, then filing a claim and/or consulting the Condominium’s lawyer. You can read the post here: https://ontcondolaw.com/2017/03/07/kitec-piping-claims/

So here again is a friendly reminder for condominiums in Ontario that the deadline to submit a claim form to be eligible to be included in the Kitec Settlement is fast approaching: January 9, 2020.

You can find the claim form, information regarding the case/settlement, and FAQs here:  http://www.kitecsettlement.com/index.cfm

Finally, just a few key reminders about completing the claim form and providing supporting documentation to file a claim:

  1. Complete the whole form – if sections/questions are inapplicable remember to note “N/A”
  2. Make sure to provide copies of invoices and cancelled cheques for plumbing services . My understanding is banks can be quite slow to provide old archived cheques to the condominium so make sure to get on this request quickly.
  3. If possible – provide a sample of a failed Kitec fitting and an engineering report to support the condominium’s claim; and
  4. Finally, if the condominium has suffered numerous plumbing failures over the years it may be best to complete one comprehensive claim. Already made a claim but the condominium has suffered further plumbing failures? Submit a new claim. Organizational Tip: Use a spreadsheet to track the cancelled cheques and plumbing invoices to be submitted with the claim.