The New Three P’s?

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If you live in or work for condominiums you’ve heard of the three p’s: people, pets and parking. These are three of the most common sources of problems in condominiums. (It really boils down to one problem – people – but let’s leave that aside for now.)

Lately, it seems like condominiums are encountering problems related to a new set of p’s: pot, prostitution and petty crime. Here we use “pot” to refer to drug activity generally, “prostitution” to include related crimes like human trafficking, and “petty crime” to refer to other sorts of criminal activity, such as vandalism and bicycle thefts. For some really unfortunate condominiums they experience all three of these at once.  Continue reading

A Warning to Owners Leasing their Units

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A recent case provides a warning to owners leasing their units. Briefly, the facts are as follows. A unit owner leased her unit to a tenant. The tenant “did not live harmoniously with his neighbours” and was in constant conflict with management. He sued the condominium for over $5,000,000. The condominium’s lawyer wrote to the owner to warn them that the costs incurred by the condominium to defend itself against the tenant’s claim would be sought from them. The owner’s son, who was power of attorney, ignored the warning and provided an affidavit in support of the tenant’s claim against the condominium. The tenant’s claim “failed miserably” and the condominium sought to recover about $86,000 in legal fees from the owner.  The owner refused to pay and the condominium registered a lien against the unit.

The court found no reason to question the validity of the lien. The main argument presented by the defendants was that the owner was not properly served by the condominium. The court found that the owner was in India at the time and it was difficult for her own family to contact her. “It would not be realistic to require the corporation to serve her personally and the law does not require it.”

The court reviewed the new provisions of the Condominium Act, 1998 at paragraph 27:

The Condominium Act establishes what must be done to serve a document for the purposes of the Act:

  • Section 46.1(3)(b) requires the corporation to keep a record of each unit owner’s address for service if that address is in Ontario.
  •  Section 46.1(4) states that a document can be served on an owner in several different ways including delivery by prepaid mail addressed to the owner at the address for service that appears in the records of the corporation.

The court was satisfied that the documents were served on the owner when the condominium sent the document via registered and regular mail to the address for service provided by the owner. “There was nothing more that the corporation could do.”

The owner also disputed the validity of the process because the condominium did not bring an action or have a hearing before registering the lien. The court reviewed section 85(1) of the Act and confirmed the process does not require an action to be commenced prior to the registration of a lien against a unit. The condominium must register the lien within three months of the default and must provide notice of the lien at least ten days before registering it. The condominium satisfied the requirements of the Act.

The owner tried to argue that it was not fair for them to be responsible for their tenant. In response, the court said:

[36]           The simple answer to the questions raised by the Sandhu family is that section 134(5) of the Condominium Act makes the unit owner responsible for the financial consequences of her tenant’s actions. If a corporation is awarded costs in an order which is made against an owner or an occupier of a unit, the costs, including the legal fees of the corporation, are added to the common expenses of the unit. That is simply the law of Ontario.

[37]           There are very good reasons for that law. One must consider the nature of condominiums and the rules that are necessary to regulate them. A condominium draws many strangers to live together in a single building. For many unit owners, the purchase of their condominium unit will be the largest financial investment of their lives. It is essential that the building is managed in a way that preserves the value of the property and maintains a sense of fairness for everyone.

[38]           The sense of fairness is created by imposing strict responsibilities both on unit owners and managing corporations. Unit owners are responsible for paying their share of the common expenses and for the conduct of any one who occupies their unit. The corporation is responsible for collecting the common expenses and notifying the unit owner of any troubling behaviour by a tenant. The purpose of the legislation is to ensure that the actions of a single unit owner do not give rise to additional expenses for all the other unit owners.

The court, while sympathetic to the owner’s situation, granted judgment in favour of the condominium and granted it possession of the unit so it can sell the unit to recover the amounts owing under the lien.

 

 

Summer Reading: Condo Authority Tribunal (CAT) Edition

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On April 11, 2019, I wrote about some of the Condo Authority Tribunal (CAT) decisions so far. Some of the highlights include the dismissal of claims that were vexatious, the adoption of the “open book” principle enumerated in previous case law, and confirmation that owners may access the list of owners. You can read the post here. The CAT has been busy since my previous post, releasing another 16 decisions in the last four months! Here are some of the highlights for these recent cases: Continue reading

Ready, Set, Action: Are In-Camera Minutes a Record of the Condo?

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Many condominiums have private sessions during board meetings where they discuss more sensitive issues involving unit owners, employees, or litigation. These are often referred to as “in-camera” sessions. Owners, apart from the directors and officers, would not be eligible to attend these portions of the meetings. Are owners entitled to access the minutes from in-camera sessions of the meetings of the board? A recent CAT decision answers the question. Continue reading

Fight Fire with Fire: Seeking Court Orders to Amend the Declaration

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A condominium corporation recently brought an application to the court for an order amending its declaration. The application was brought under section 109 of the Condominium Act, 1998, which allows the court to amend the declaration for a condominium where it is “necessary or desirable to correct an error or inconsistency that appears in the declaration….or that arises out of the carrying out of the intent and purpose of the declaration.” The case is most interesting because of the alleged errors or inconsistencies. The case is available on CanLii for those interested in reading it in its entirety.  Continue reading

What did you get yourself into? Top ten tips for new directors

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I’m often asked to give advice to new directors, especially first time directors. It is a difficult question to answer because the advice depends on a number of factors, such as the experience level of the director, whether or not the condominium has a manager, and the age of the condominium. In hopes of reducing the anxiety of a few new directors, here are my top ten suggestions to newly elected directors:

1. Review the condominium documents – it is important for directors to review the declaration, by-laws and rules shortly after being elected. You are not expected to be an expert, but you need to have a basic understanding of the key provisions, such as repair and maintenance obligations, restrictions on the use of units, and shared facilities. Familiarity with the documents will make for more efficient board meetings and more informed decisions.

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Court rules (again) that condo can’t avoid mandatory arbitration

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There have been several cases in the last year or two that have been stayed (halted) because one of the parties ignored an obligation to arbitrate a dispute. Another decision was released this week. Given the number of cases as of late, it seems that a review of the basic principles might be useful. The most recent case includes a great review so we will summarize it here. Continue reading

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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