My Favourite Condo Lessons of 2016

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As 2017 approaches I find myself reflecting on the most important news, cases, and other events from this past year. Here are my favourite condo lessons for 2016:

10. Property Managers may be liable for errors in status certificates. The responsibility for the status certificate is normally set out in the management agreement so make sure that you are familiar with any limitations of liability and any obligations on the board to disclose information relevant to the status certificate. You can read the most recent case here and the costs award here.

9. Condominiums cannot refuse access to telecommunications providers.  A condominium had three telecommunications providers in the building and it refused a request for access by a fourth after negotiations failed between the two. The provider asked the CRTC to intervene, which it did in part. The CRTC required the parties to negotiate the terms of access, and if access was not given the CRTC would order access or preclude the other providers from offering services to the residents. This was a hot topic in 2016 and was discussed in countless articles and blogs (see e.g. Lash Condo Law’s blog post on it). Bottomline? Don’t refuse access to telecommunications providers without talking to the condominium’s lawyer first.

8.  Scheduling Meetings. Even though the condominium in this case was successful in defending its meeting date, condominiums need to be mindful of religious holidays or special events when selecting dates or times for owners’ meetings as it could be discrimination if there isn’t a valid reason for selecting a date that coincides with an important religious holiday.

7.  Duty to take all reasonable steps. Section 17(3) of the Act requires condominiums to take “all reasonable steps” to ensure that the owners comply with the Act, declaration, by-laws and rules. The lessons to be learned from this case are: 1) the board needs to be reasonable when enforcing against a landlord owner; 2) reasonable will depend upon the circumstances, but it may include giving the owner time to negotiate the early termination of a lease of his unit or apply for an for eviction; and 3) the board should assist the owner in his efforts to enforce against his tenants. Since the condominium “jumped the smoking gun” by moving for a compliance order too quickly it was not entitled to any costs from the owner.

6. Fraud. More property managers were charged with fraud this year. One has even been convicted and sentenced to 4 years in prison. All directors and owners should be diligent when reviewing financial records of the condominium; hire only trustworthy managers; and ask the auditor and bank reps for tips to avoid fraud.

5. Airbnb. A recent case confirms that short-term rentals are incompatible with a single family use restriction. You can read about the case from Rod Escayola, the lawyer who represented the condominium.

4.  Unreasonable Owner + Reasonable Board = Costs for Condo. This premise is pretty easy to understand, but often times the board is the party found to be acting unreasonably by the court. Here is an example of a board acting the way it should.

3.  Condo Harassment is Real. Condominiums have an obligation to investigate complaints of discrimination of one group of residents by another group. The board must address the situation promptly and with sensitivity, and communicate to the complainant. On the flip side, a condominium will not be found to have harassed an owner if it was merely enforcing the documents as required by the Act. For more information, see our earlier post.

2.  Chargebacks and liens. The courts continue to hear complaints of condominiums levying improper charges against owners and registering invalid liens. Without proper authority in the Act, declaration, or by-law, a condominium cannot charge back any cost it wants to an owner. There must be a specific clause that allows legal fees to be charged to an owner; the general indemnity clause (i.e. damage to the common elements or units) is not sufficient. We previously wrote about this in July. In addition, the courts have also been clear that all liens must be registered within 3 months of the default and the court will not extend the time for registering a lien based upon equitable principles or section 134 of the Act. As Dunphy J. said recently:

The common-sense meaning of default when used in relation to an obligation to pay is that default occurs when the payment is due but not made.

The lien must be registered within three months of the default. If it is an amount other than ordinary monthly fees (which are usually due on the first of the month), make sure you clearly set out the due date so you will know when the three month period begins and the lien right expires. Bottomline? You snooze, you lose.

And not surprisingly, the top news event of 2016 (as it was in 2015) is…

1.   The waiting game. When will the Protecting Condominium Owners Act, 2015 (Bill 106) come into force?  The government is working on the regulations and organizational structure (i.e. tribunal), but many estimates say it will be phased in starting in the Spring of 2017.The waiting game continues…