Employee Entitlements

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About this time last year I wrote about Bill 148 (Fair Workplaces, Better Jobs Act, 2017) which included huge changes to employment law in Ontario. You can see the post here. Some of the amendments, like the increase to minimum wage and equal pay for equal work on the basis of employment status (i.e. part-time vs full-time), came into force last year. Many of the amendments, such as a further increase in minimum wage and the scheduling requirements, were set to come into force on January 1, 2019. But wait! There have been more significant changes to the employment landscape.  Continue reading

Trouble with the declarant?

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I am regularly consulted by our condominium clients about issues with the declarant. Sometimes the declarant is in arrears of common expenses for units it still owns. Other times the declarant has not paid the first year budget deficit owing to the condominium. Sometimes the declarant made promises to purchasers that they didn’t follow through on. On occasion there are construction defects. What’s a condominium to do? Unfortunately, the answer depends on the situation and there is no one best way to deal with the declarant.

Arrears of common expenses

The easiest problem on the list – arrears of common expenses – is also one of the most common. Where the declarant has fails (or refuses) to contribute toward the common expenses payable for any units that it still owns the condominium may be able to register a lien against the unit to collect the amounts owing just like it would with any other unit owner. The declarant usually intends to sell the units quickly after registration so it is important to pursue liens against declarants in a timely manner. If not, the declarant could transfer the unit and a dispute could arise about their responsibility for arrears owing prior to the transfer.

It is important to note that the condominium can only register the lien against the units in arrears and not all of the units owned by the declarant. It is also important to review the declaration to see if the declarant is obligated to pay for the units while it still owns them as on occasion there is an exemption for the declarant while it owns units (see this case).

First year budget deficit

Another common issue is collecting the first year budget deficit owing from the declarant to the condominium. We previously posted about the declarant’s obligation to reimburse the condominium for the first year budget deficit (see here).

The Condominium Act, 1998, states that the declarant is accountable for the budget statement for one year following registration of the declaration and description (or the registration creating any phases). Section 75 of the Act states that the developer is responsible for the difference between the budget statement and the actual numbers, which are described in the audited financial statements. The condominium must notify the declarant of the deficit within 30 days of receiving the audited financial statements. The declarant then has 30 days to pay the condominium.

If the declarant refuses to pay the condominium, or they have a dispute about the deficit, the condominium and declarant must mediate the dispute pursuant to subsection 132(3) of the Act:

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If the condominium and declarant cannot reach a settlement at mediation the next step is binding arbitration, which is very costly.  Fortunately, in my experience, most declarants pay before arbitration is required.

Like with arrears of common expenses, it is very important that the condominium act quickly when faced with a first year budget deficit issue. The Act has very tight timelines (i.e. 30 days after receiving the audited financial statements) that must be complied with or the declarant may be able to avoid the obligation. Also, as the units are sold the declarant may transfer assets, which may leave very little funds left to satisfy the first year budget deficit.

Inadequate Disclosure or Misrepresentation

Some owners feel like the declarant misrepresented some aspect of the development to them. For instance, I have two different sets of condominiums who feel aggrieved because their declarants marketed the condominiums as phased condominiums only to register them as separate condominiums. This may not seem like a big deal, but the costs are significantly higher to operate the condominiums as two separate entities than it would have been as one. In one case, the condominiums are considering legal action to recover their damages. In the other the declarant agreed to contribute toward the costs of amalgamation.

If the purchaser becomes aware of the issue prior to closing on the unit, such as after receiving a material change notice from the declarant, they may be able to rescind the agreement and walk away. Unfortunately, once the units are transferred from the declarant to the purchasers the process is more complicated as rescission of the agreement is no longer an option and the owners must sue for damages. For this reason, it is vital to have the disclosure documents (and any notices about changes to the disclosure documents) promptly reviewed by a lawyer. The lawyer needs time to review the documents and prepare a notice to the declarant within ten days of receiving the documents if rescission is sought by the purchaser. Time is of the essence!

Construction defects

Some unfortunate condominiums find construction defects in the common elements or units. The engineer often finds them during the performance audit or subsequent reserve fund studies, but sometimes they can be discovered years later when destructive testing is completed for an upcoming repair project. Depending on a number of factors (i.e. the time of the discovery, type of condominium, and the type of defect), the condominium could have a warranty claim to Tarion. If not, the condominium may still have a cause of action that could be pursued at court, such as breach of contract, breach of warranty, breach of statutory duty, or negligence.

If a condominium suspects there are construction defects it needs to hire an engineer to investigate as soon as possible. It should also have a preliminary discussion with a lawyer to determine any possible limitations to a claim against the declarant. Apart from traditional limitations, such as the statue of limitations or expiration of warranty periods, some declarants are not including documents in their disclosure packages that require the condominium to release legal rights to pursue the declarant for construction defects, except for those that cannot be released (i.e. major structural defect warranty claims to Tarion).  My recommendation would be to consult with engineers and lawyers familiar with construction defect litigation. The condominium’s general counsel may not have the knowledge and expertise that you need when it comes to construction defects.

 

Tips for Owners Requisitioning Meetings

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Requisition meetings can be a source of anxiety for many directors, managers, and owners. In my experience, the conduct of the parties during the preliminary steps of the requisition process can exacerbate the anxiety and cause a great deal tension, hostility, and bickering at the meeting. We previously wrote about the requirements for requisition meetings (here) and the practical tips (here) for condominiums in responding to requisition requests. Today, I thought that I would share some tips for owners requisitioning meetings. Continue reading

Let the CAT out of the Bag

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The Condominium Authority Tribunal (CAT) has been up and running for a little over a year now. It has released 14 decisions so far, but it has handled hundreds of claims based on the last statistics disclosed at the ACMO/CCI-T Conference in November. Despite being a popular topic at condominium industry events, I am regularly asked about the CAT’s jurisdiction to hear disputes. Continue reading

Clear and Current Disclosure

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In Toronto Standard Condominium Corporation No. 2051 v Georgian Clairlea Inc. (“Georgian”) the Ontario Court of Appeal affirmed the findings of the motion judge with respect to a declarant’s disclosure obligations as set out in the Condominium Act, 1998 (“Act”).

Subsection 72(1) of the Act provides that “the declarant shall deliver to every person who purchases a unit or a proposed unit from the declarant a copy of the current disclosure statement made by the declarant for the corporation of which the unit or proposed unit forms part” (emphasis added).  The obligation to provide the current disclosure statement demonstrates that the Act intends for the declarant’s disclosure obligations to continue as the project changes between inception and final closing. Continue reading

Condo Stats – Golden Horseshoe

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Today, I am going to update a previous post we did on condo stats for the Golden Horseshoe area as I did earlier this week for Grand River. For those unfamiliar with the area, the Golden Horseshoe includes Halton, Hamilton-Wentworth, Niagara, Haldimand, and Norfolk.  In the next few weeks I’ll provide statistics for the other areas of Ontario.

As of June 27, 2017, the Golden Horseshoe had 1665 registered condominium corporations:

  • Halton – 672
  • Hamilton-Wentworth – 552
  • Niagara – 391
  • Haldimand – 17
  • Norfolk – 33

As of January 22, 2019,  the Golden Horseshoe now has 1722 condominium corporations registered:

  • Halton – 695
  • Hamilton-Wentworth – 570
  • Niagara – 401
  • Haldimand – 19
  • Norfolk – 37

As said in my previous post,  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. Hopefully the CAO will start releasing statistics to the public on the real numbers.

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

Condo Stats – Grand River Edition

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For any of the self-proclaimed condo geeks out there (I’m thinking of you Jon Juffs), I thought that I would update a post we did previously on condo statistics. As a director for the Grand River chapter of CCI and a resident of the area, it seemed most fitting to start with the Grand River. For those unfamiliar with the area, the Grand River includes Brant, Wellington and Waterloo.  In the next few weeks I’ll provide statistics for the other areas of Ontario.

As of June 27, 2017, the Grand River had 971 condominium corporations registered:

  • Brant – 105
  • Wellington – 237
  • Waterloo Region – 629

As of January 22, 2019,  the Grand River has 1007 condominium corporations registered:

  • Brant – 110
  • Wellington – 249
  • Waterloo 648

It should be noted that the total number is not the number of active condominiums as a few condominiums have been terminated or amalgamated. For instance, I attended a meeting for a Waterloo condominium last night that was created in 2004 when 20 condominiums (ranging in size from 3 units to 16 units) amalgamated into a single condominium. On my wish list is an accurate list of active condominiums for each jurisdiction. Maybe someone at the CAO could help us out?

Apart from the number of condominiums, the trends as far as type, number of units, and style appears to be holding steady. For instance, the last condominium registered in Wellington was a 36 unit townhouse style in Guelph. In my experience, many of the condominiums in Wellington are townhouses; high-rise and single detached condominiums are less common. The last one in Waterloo was a 77 unit low-rise in Waterloo. In Brant, it was a 9 unit vacant land condominium. As a percentage of the total number of condominiums, I suspect that Brant (or possibly  Middlesex) may have the most vacant land condominiums.

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

 

Upcoming Events: Winter 2019

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The post-holiday / winter blahs usually peak around now. Why not get out and socialize with some like-minded people? Meet some new people. Share a few laughs. And learn some tips from the experts. There are plenty of great events coming up this winter. Here are the highlights:

January 2019

23rd – CCI-Eastern Ontario’s Lawyers, Guns and Money in Ottawa. If the title of this event isn’t enough to entice you, I don’t know what is! The presenters will review some of past year’s most important court decisions.

24th – CCI-Huronia’s Introduction to Condos Course in Barrie will provide basic (but important) information to directors and owners.

26th – CCI-GHC’s Beyond Mediation – Condominium Conflict Management in Burlington. I will be speaking with two of the leading condo mediators – Colm Brannigan and Marc Bhalla. This is a level 300 so space is limited. Sign up now to avoid disappointment.

29th – CCI-London’s Lunch & Learn on the Mysteries of the Condominium Authority Tribunal (CAT). Do you have questions about the CAT? This is the session for you!

February 2019

8th – CCI-GRC’s Professional Partners Lunch & Learn on Preventative Maintenance in Kitchener. This annual event includes over an hour of presentations as well as plenty of time for networking with the trades and professionals in attendance.

12th – CCI-London’s Seminar on Budgets. This course is designed to help condos prepare budgets and will include a discussion of related issues, like reserve fund contributions.

13th – CCI-GHC’s Introduction to Condominiums in Stoney Creek. This session will provide a basic overview of condominiums, property management, director responsibilities and financial issues.

March 2019

1st – CCI-GHC’s Lunch & Learn series. No details are available so you’ll have to check back for further information.

12th – CCI-London’s Climate Change: It’s Impact on Condominiums seminar. Details are not yet available, but this sounds like it could be an interesting session so stay tuned for more information!

Coming Soon – Better City Waste Collection Options for Condos in Guelph

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Last week I attended a meeting with staff from the City of Guelph’s Environmental Services department to hear about the City’s latest efforts to provide better waste collection services to multi-residential properties, including condominiums.  The City’s 2014 Solid Waste Management Master Plan Update included a recommendation that City waste collection be expanded to multi-residential properties. One of the key pieces of this recommendation – a front-end large bin collection vehicle – is set to be rolled out in the second quarter of 2019. This has taken longer than initially hoped, but better late than never, right? Continue reading

Looking Back on 10 Decisions of 2018

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Below is a brief look back at some of the most talked about cases in 2018:

Metropolitan Toronto Condominium Corp. No. 932 v. Lahrkamp, [2018] O.J. No. 311

A unit owner had commenced many legal proceedings against the condominium corporation for approximately 10 years relating to the production of documents – many of these proceedings were dismissed.  The condominium corporation successfully applied to the Court to have an order prohibiting the owner from commencing legal proceedings against the condominium corporation and its past, present, and future directors, property managers, and service providers without leave of the Court.  Note that the unit owner was not prohibited from bringing legal proceedings before the Condominium Authority Tribunal (“CAT”) and did so later in 2018…the owners application before the CAT was dismissed.

Jones v. 2341464 Ontario Inc., 2018 ONSC 717

A developer/vendor attempted to unilaterally terminate an agreement of purchase and sale for a pre-construction condominium unit due to delays in construction.  The Court found that the provisions in the agreement of purchase and sale that allowed the developer/vendor to unilaterally terminate the agreement of purchase and sale had been removed by a valid amendment and that the developer/vendor was required to perform its obligations set out in the agreement of purchase and sale.

Simcoe Standard Condominium Corp. No. 431 v. Atkins, [2018] O.J. No. 2986

Two condominium corporations were ordered to call requisitioned meetings of owners because of a special assessment levied by the condominium corporations. The condominium corporations had refused to call the meetings of owners because they alleged the requisitioning owners had obtained the necessary signatures to requisition a meeting of owners by disseminating misleading information.  The Court was not persuaded by the evidence presented to support such an allegation and found no reason for the condominium corporations to refuse to call meetings of owners in accordance with section 46 of the Condominium Act, 1998.  Further, the condominium corporations asked the Court to prohibit the use of proxies during the requisitioned meetings of owners as a result of the dissemination of misleading information. The Court refused to do so finding that the communications were not misleading but rather expressed an opposing view. The Court also questioned if it had authority to “deny owners the statutory right to vote by proxy.”

Janet Cangiano v Metropolitan Toronto Condominium Corporation No. 962, 2018 ONCAT 7

A unit owner had requested to audit the proxies recently used to elect directors to the board of directors without redaction. The CAT refused the request of the unit owner as clause 55(4)(d) of the Condominium Act, 1998 provides that the ability of an owner to examine the records of the condominium corporation does not apply to “any portion of a ballot or proxy form that identifies specific units in a corporation or owners in a corporation unless a by-law of the corporation provides otherwise”.

Peel Standard Condominium Corporation No. 984 v. 8645361 Canada Limited, 2018 ONSC 4339

After obtaining an order prohibiting a commercial unit owner from harassing the condominium corporation’s board members, employees and managers and multiple orders from the Court, the condominium corporation successfully obtained an order requiring the owner to vacate and sell the commercial unit for any reasonable offer.  The Court also granted the condominium corporation the ability to apply for possession of the commercial unit if the owner did not comply with the conditions of the Court’s order.

Toronto Standard Condominium Corporation No. 2256 v. Paluszkiewicz, 2018 ONSC 2329

A condominium corporation asked the Court to set aside the decision of an arbitrator with respect to the validity of improvements made to a unit authorized by a section 98 agreement. The section 98 agreement was authorized by the declarant appointed board and called for the production of detailed drawings and further approval of the board prior to renovations commencing.  The owner argued the required plans were submitted to the declarant appointed board provided and the evidence of the condominium corporation was not sufficient to persuade the Court to set aside the decision of the arbitrator.

Patterson v. York Condominium Corporation No. 70, 2018 ONSC 3735

The Court dismissed an owner’s effort to force the condominium corporation to raise the common expenses, among other requests.  The Court found that the decision process of the board of directors met the standard of care required under section 37 of the Act and that the Court should not substitute its own reasoning for that of the board of directors.

Noguera v. Muskoka Condominium Corporation No. 22, 2018 ONSC 7278

An owner had commenced construction to remove a demising wall between units with the board or director’s permission.  A subsequent board of directors asked for the owner to enter into a section 98 agreement and wanted to review/alter the decision and decision making process of the previous board of directors.  The owner brought an oppression and was permitted to complete construction but was required to enter into a section 98 agreement.

Terence Arrowsmith v Peel Condominium Corporation No. 94 2018 ONCAT 10

An owner made a request for records relating to the removal of mould from the sauna and mailroom.  The condominium corporation did not provide the requested records despite conceding the owner was entitled to such records on the basis that the owner had not properly completed the mandatory request for records form.  The CAT ordered the documents to be provided and award costs (which included an award for the owner’s time spent participating in the process) to the owner. The CAT also went on to impose a monetary penalty on the condominium corporation as a result of its failure to provide records without reasonable excuse.