Top Condo Lessons of 2019

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As 2020 approaches I find myself reflecting on the most important news, cases, and events from this past year. There were several notable decisions released this year and a few that I’m sure we would all like to forget! The hardest part of these lists is selecting only ten to speak about. Here is my list of the top ten condo lessons for 2019:

Counting Isn’t as Easy as 1, 2, 3

The Court confirmed the 10 day notice requirement for liens can be calculated by excluding the date the notice of lien is mailed and including the date of registration. Sending the notice of lien on January 21 and registering the lien on January 31 was acceptable. (Note: this is the minimum; more time is generally better). See CCC 476 v. Wong (2019). Continue reading

Is Phase Two of the Amendments on Its Way?

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Unless you are new to condo living, you likely know that the Condominium Act, 1998 was amended in 2017. At the time, many believed that the rest of the amendments would be phased in over the following 18 to 24 months. It has been two years and very few of the remaining amendments have come into force. [Note: if you review the Act you will see large portions of it in grey indicating that it has not yet come into force]. Continue reading

Grandparenting Not Required for Rule to Be Reasonable

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A recent application (Wellington Condominium Corporation No. 31 v. Silberberg) before the Superior Court considered whether a condominium corporation’s newly enacted rule prohibiting smoking within the common elements of the condominium plan was unreasonable.

The Facts

The facts of the dispute are not complicated:

  • The owner of a unit (the “Owner”) had been smoking on the balcony adjacent to the Owner’s unit (the “Balcony”) since first occupying the unit in 2009;
  • There was no rule prohibiting such activity until, in response to complaints of smoke migration, the condominium corporation proposed a new rule that prohibited smoking within the common elements (including the exclusive use balconies) of the condominium plan;
  • The proposed rule did not prohibit smoking in the units of the condominium plan;
  • The condominium corporation held a meeting of owners after receiving an invalid request for same;
  • Some owners requested the Rule be amended so it would not be enforced against those occupants that smoked in the common elements prior to the rule coming into effect;
  • A majority of eligible owners voted not to amend the rule as proposed by the condominium corporation;
  • The rule came into effect June 21st, 2018 and read as follows:

Smoking of any kind, including without limitation by using vaporizers or e-cigarettes is not permitted in any part of the common elements or exclusive use balconies at any time.

(the “Rule”);

  • The Owner admittedly continued to smoke on the Balcony after June 21st, 2018 and believed the condominium corporation could not stop him from doing so;
  • The condominium corporation contacted the Owner demanding compliance with the Rule;
  • Counsel for the condominium corporation sent multiple letters to the Owner/Owner’s counsel demanding compliance with the Rule; and
  • The Owner continued to smoke on the Balcony.

 

The Application

The Court was asked to consider 3 issues:

  1. Is the Balcony unit or exclusive use common elements?
  2. Was the Rule properly passed?
  3. Is the Rule reasonable?

Is the Balcony unit or exclusive use common elements?

The Court was satisfied that the Balcony was an exclusive use common elements area of the condominium plan.

The Owner alleged the Balcony or a portion of the Balcony was owned exclusively by the Owner.  Other than the viva voce evidence of the Owner during cross examination, photos of the Balcony, and the Owner’s sketch of the Balcony depicting its dimensions, the Owner offered no evidence to support this assertion.

The Court preferred the wording found in the condominium corporation’s declaration that provides:

the Owner of each Unit shall have the exclusive use of that portion or portions of the Exclusive Use Common Elements as set out in Schedule “F” attached hereto.

Schedule F to the condominium corporation’s declaration provides:

The Owner of each Unit shall have the exclusive use of any balcony to which the Unit shall provide direct and sole access as shown on Parts 1, Sheets 2 and 3.

The Court found that “[a]bsent some modifying words in the [declaration] itself, balcony should be taken to mean the whole balcony”.  The Court went on to find that this interpretation was supported by the design of the Balcony and found no evidence to otherwise support the assertion that the Owner has exclusive ownership of part of the Balcony.

Was the Rule properly passed?

The Court found the Rule was properly passed.

As the Owners attended the meeting of owners by proxy, the Court was satisfied subsection 47(9) of the Condominium Act, 1998 prevented the Owner from objecting to a failure of the condominium corporation to give the required notice.  With respect to the meeting itself, the Court was satisfied that the uncontradicted minutes of the meeting of owners included in the condominium corporation’s application materials disclosed that a quorum of owners was present at the meeting of owners and that the Rule passed without amendment.

Is the Rule reasonable?

After recognizing the Court should only interfere with a rule properly enacted by a condominium corporation where such rule is clearly unreasonable, the Court was satisfied the condominium corporation had a reasonable basis for enacting the Rule.  The Court found that:

  1. given the current legislative environment, it was not unreasonable for the condominium corporation to impose further restrictions on smoking within the condominium plan;
  2. it was not unreasonable for the condominium corporation to regulate smoking in areas where fumes could affect other units;
  3. given the broader public context, the Rule was reasonable in and of itself;
  4. owners had an opportunity to discuss the proposed rule at a meeting of owners; and
  5. there had been complaints about smoke migration.

The Court then went on to consider whether the Rule was unreasonable for want of “grandparenting” occupants that smoked within the common elements prior to the Rule coming into effect.  The Court concluded that a period of grandparenting for the Rule was not necessary as such was not required by the Condominium Act, 1998.

The Court went on to note that the Owner was permitted to smoke within the Owner’s unit and that the Rule did not prohibit the Owner from smoking within the entire condominium plan.  Further, the Court as in Thunder Bay Condominium Corporation No. 15 v Ewen, found the Owner could walk off the condominium plan and smoke there.  The Court went on to state that including a grandparenting provision in the Rule would defeat the purpose of the Rule – to prevent smoke migration – and that the Rule does not contain any grandparenting provisions is neither unexpected nor unreasonable.

The Court concluded that the Rule was entirely reasonable and did not leave the Owners without options.

Takeaway

This decision illustrates that reasonableness is highly context dependent.  The decision clearly demonstrates that the Court will consider the broader legislative and public context in making a determination as to whether a rule is reasonable.

Although the Court concluded that a grandparenting provision was not required in this instance, it is essential to note that the circumstances surrounding the Rule appear to have had significant value to the Court in reaching its decision.  Further, the Court concluded that grandparenting in this context would defeat the purpose of the Rule.

It remains possible that a grandparenting provision could be required where:

  1. such a provision would not defeat the purpose of the rule; or
  2. the rule prohibits an activity in its entirety.

Further still, condominium corporations may wish to consider including a grandparenting provision for political purposes – to ensure a majority of eligible owners will vote in support of the proposed rule should the condominium corporation receive a requisition for a meeting of owners to vote on the rule.

Recent Changes to Cannabis Laws

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On October 17, 2019, the Cannabis Regulations under the Cannabis Act were updated to establish rules for the legal production and sale of three new classes of cannabis: edible cannabis, cannabis extracts, and cannabis topicals (i.e. lotions). It is expected that these new products will be available to Canadians before the end of the year.

What does this mean for condominiums? Continue reading

Coming January 1, 2020…

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We are still early into the Fall season, but there have already been a few announcements about changes coming January 1, 2020. More changes are expected to be announced, but here’s what we know so far.

Condo Authority of Ontario (CAO) 

The CAO announced that it will again have a 25% reduction in its fee for the 2020-2021 year. The fee will be $0.75/month per voting unit. The annual fee was initially set at $1/month per voting unit, but the costs to operate the CAO have been less than initially projected (in part because the CAT’s jurisdiction has not been expanded as originally anticipated under the previous government).

(Note: the Government of Ontario has proposed making the CAO responsible for 19 of the prescribed forms under the Act and its regulations, including information certificates, preliminary and notice of meeting, proxy, and forms related to record requests. These changes could take effect as early as January 1, 2020. Stay tuned on this one as it hasn’t been confirmed yet!).

Court Changes

The Government of Ontario announced some key changes to the court system in Ontario. The changes are aimed at increasing access to justice, reducing legal costs, and making the process quicker. On January 1, 2020 we will see the following changes:

  1. Increase in the monetary limit for Small Claims Court from $25,000 to $35,000.
  2. Increase in the monetary limit for Simplified Procedure actions in the Superior Court of Justice from $100,000 to $200,000.
  3. Other changes designed to reduce costs and speed up the process.

For those with claims with limitation periods expiring after January 1, 2020, you should discuss the pros and cons of commencing your actions now or waiting.

Condo Ignores Condo Authority Tribunal (CAT) Requests to Join Case

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A recent CAT decision serves as a good reminder to condominiums of the consequences for refusing to participate in the process.

The owner requested various records from the condominium twice. The condominium had its lawyer respond indicating that it had no obligation to respond because the owner had not used the mandatory form. The lawyer provided a copy of the request form with the letter and indicated that they would respond to the request once it was submitted on the proper form. The owner completed the form and sent a copy via fax to the lawyer and manager. The condominium did not respond so the owner filed a case with the Condominium Authority Tribunal (the “CAT”).

The owner provided notice of the CAT case by courier to the condominium at the management office. The CAT clerk even contacted the condominium twice to ensure they received the notice. The condominium still did not join the case. The condominium did not participate at any point and the process continued without it.

There is an interesting discussion of records requested by the owner that related to a civil action commenced by the condominium against the builder and developer. The action was funded by a special assessment and eventually settled with a payment to the condominium of $1.7 million. The owner was concerned because there was apparently a discrepancy between the settlement amount and the amount received by the condominium ($700,000) so the owner sought an accounting of the amount as well as the settlement agreement. After reviewing sections 55 and 23 of the Act, the CAT member found the owner was entitled to see the settlement agreement.

The CAT ordered the condominium to provide all of the records requested by the owner and pay a penalty of $3,000 for its refusal to provide the records without reasonable excuse. The CAT also awarded the owner costs of $150 (the filing fees paid to the CAT by the owner).

While $3,000 is a significant penalty for many condominiums, I wonder if it is enough incentive for some of the larger condominiums with multi-million dollar budgets. Clearly some are still choosing to ignore record requests by owners (and apparently direct contact from the CAT clerk). What will it take to get them to respond? $10,000? Personal liability on the directors? A summons? Fortunately, most condominiums comply with their obligations when records are requested.

The full case is available on CanLii: https://www.canlii.org/en/on/oncat/doc/2019/2019oncat44/2019oncat44.pdf

Get to Know the Team: Evan Holt

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Practice Areas

Evan’s practice is divided between assisting declarants acquire land and develop condominium plans and assisting condominium corporations and unit owners with condominium related issues.   Evan’s work includes:

  • reviewing and drafting agreements of purchase and sale;
  • assisting with various matters relating to condominium plan registration;
  • attending and acting as chairperson at condominium meetings;
  • drafting condominium documents (declaration, by-laws, and rules);
  • coordinating the collection of common expenses;
  • negotiating and drafting shared facilities agreements;
  • arranging settlements among condominium corporations, suppliers, or unit owners; and
  • commencing enforcement proceedings against a condominium corporation or unit owner.

Recently, Evan has devoted time to assisting condominium corporations collect arrears of common expenses that are no longer eligible to form the subject matter of a lien.  Evan has found that creative thinking and a willingness to understand the positions of opposing parties is key to any successful resolution.

Involvement

Evan is a former member of the Communications Committee of the Grand River Chapter of the Canadian Condominium Institute.   Evan has written articles that have been published in the Grand River edition of the Condo News and hopes to have more opportunities to have articles published in the future.

Personal

Evan enjoys spending time with his family, friends, and his dog, Bauer.  He is a sports enthusiast and you can often find him watching or participating in live sporting events.

Contact

Evan would be happy to speak with you to discuss any condominium related issue by e-mail or phone.

Get to Know the Team: Daniel Brockenshire

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Practice Areas

Daniel works with both the condominium management group and the condominium and subdivision development group.

Daniel is currently working with the condominium and subdivision development group on a variety of development projects with clients across Ontario including residential condominiums, commercial condominiums, condominium conversions, and subdivisions. He also chairs turnover meetings for clients’ registered condominium projects.

Recently, Daniel has been spending much of his time with the condominium management group working on borrowing by-laws for condominiums across Ontario as well as amalgamations for condominiums in Waterloo and London. The amalgamation process is time-consuming, but the goal is helping clients achieve significant cost savings within a few years following amalgamation by consolidating previously duplicated costs (ex. reserve fund studies, audited financials, AGMs, service contracts, etc.).

Involvement

Daniel is involved in the Canadian Condominium Institute (CCI) especially the London and Grand River Chapters. You may have seen him recently at one of the conferences enthusiastically recruiting visitors at the firm’s booth to try the golf putting challenge. Keep an eye out for its return at a future conference!

Personal

Daniel enjoys spending time with family and friends and as most major sports seasons have now kicked off – cheering on his beloved Manchester United, Toronto Maple Leafs, and Oakland Raiders. He also loves traveling and recently had a fantastic hiking experience in Cornwall, England.

Contact

E-mail or phone.

For more information, please see the firm’s website: www.rcllp.ca

 

Quiet condo for retirement? Maybe not…

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A recent case discusses an interesting (and becoming more common) situation where a building is registered as a condominium, but also operated as a retirement home under the Retirement Homes Act, 2010. An action was commenced by certain unit owners against the condominium and various corporations involved in the operation of the retirement home. The owners claimed that the defendants breached the declaration, by-laws, and Retirement Homes Act, 2010, by acting in a discriminatory manner against some of the owners. The owners sought an order that: 1) required the defendants to ensure that at least 2 directors are independent of the defendants; 2) required the defendants to use an agreement that sets out the services program with mandatory fees in accordance with the by-laws; and 3) damages in the amount of $50,000. Continue reading

Is the CAO responsible for creating the forms? Maybe in the near future…

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There is a new proposal to have the CAO assume responsibility for 19 forms under the Condominium Act, 1998 and its regulations. The idea is that the proposed changes would “support the condominium community in being able to more easily access and use certain forms under the Condominium Act, 1998.” The proposal is for 17 forms to be delegated to the CAO on January 1, 2020 and 2 additional forms on July 1, 2020. Continue reading