Owner not oppressed by by-law restricting use of parking spaces

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I recently read an interesting case about parking rights in a commercial condominium. The applicant was the owner of three units, which were leased for use as a restaurant. The owner commenced an application against her condominium after it passed a by-law restricting parking in common element spaces.

Historically parking was allocated on a first-come, first-served basis. This led to problems with insufficient parking for customers and employees of many of the units. In 2009 the Board passed a by-law to change the allocation of parking spaces. The by-law allocated two parking spots to each unit. In 2014 the Board discovered that the by-law was never registered so it was not valid. The Board passed another by-law in 2015 to fix the problem. The 2015 by-law increased the number of parking spaces per unit to four. The result was that the restaurant had significantly less available parking for its customers.

The owner claimed that the by-law essentially privatized parking because after the 132 spaces were allocated to the owners there were only 30 spaces left for general use. The owner also claimed that the board’s conduct was oppressive. The condominium denied that the by-law was invalid and claimed that it was merely trying to balance the competing interests of all unit owners.

The court agreed with the condominium and upheld the by-law. The judge made several interesting comments:

At para. 27:

A by-law is not discriminatory simply because it aims at a problem caused by one unit-holder. It would only be discriminatory if it solved the problem by imposing different prohibitions or obligations on that one unit-holder. The solution in this case is to lease an equal number of parking spaces for all units. That does not discriminate against the [owner]; in fact it confers a benefit because the condominium corporation has allocated a larger number of parking spaces exclusively to her.

After finding that the owner had made “heavy use” of the parking spaces prior to the enactment of the by-law and that the by-law had a detrimental effect on the restaurant, the judge said at para. 41:

…I do not see how the Board’s actions can be called unreasonable. There was a parking problem and it had to be remedied. The Board came up with a solution that it believed would remedy the problems and treat all owners on an equal basis. It is not my job to second-guess the Board and substitute my judgment for theirs unless the by-law is clearly unreasonable or contrary to the Condominium Act or the declaration.

The judge reviewed the test for oppression, which is: 1) the claimant must demonstrate that there has been a breach of its reasonable expectations; and 2) that, considered in its context, the conduct complained of amounts to “oppression”, “unfair prejudice”, or “unfair disregard”. The judge found that the owner had expectations that her tenant could use all of the shared parking spots prior to the enactment of the by-law. The judge concluded that her expectation was not legitimate or reasonable. “Indeed, [her expectation] is what led to the parking problems in the first place.”

Given the decision on the first part of the test the judge did not need to consider the second part of the test. The judge offered the following comment:

I find it difficult to understand how the actions of the Board could be called oppressive when the owner of three units in a 33-unit development wishes to use 100% of the available shared parking for her tenant. I think, frankly, that the oppression goes in the other direction.”

A decision on costs has not yet been released.

While this case was about a commercial condominium many of the same considerations and principles would likely apply to the allocation of parking in a residential or mixed-use condominium. Based upon this decision, the fairest way of allocating parking spaces is to give each unit the same number of parking spaces and reserve a group for use on a first-come, first served basis by visitors and other guests. This is not to say that a judge would find another method invalid in all circumstances. A judge will look at: 1) was the by-law or rule improperly enacted?; 2) is the passage of the by-law oppressive? If the answer is yes to either question the by-law may be declared invalid by the court.

Interesting legal issues. Great analysis of the board’s responsibilities, especially when balancing competing interests. Definitely worth the read when you have a moment. You can get a copy of the decision here.