Confusion Over Condominium By-law Requirements

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Earlier in the year we wrote about the different voting thresholds to pass condominium by-laws and described the process generally. We did not go over the extensive list of permitted subject matters or other requirements for a by-law to be valid. A recent case highlights the importance of ensuring the by-law complies with all requirements of the Condominium Act, 1998, so today we will explore the other requirements of the Act.

In a recent case the court was asked to rule on the validity of a by-law that contained conditions and restrictions on the rental of the units. The court found the condominium’s by-law was valid as far as its restrictions on: controlling who may operate a rental program, charging a rental management and amenity fee, collecting refundable damage deposits, and imposing limits on the number of people who may occupy a rental unit. The court found that the restrictions on advertising and the requirement that the owners use a rental manager approved by the Corporation were unreasonable. The court ordered the unreasonable parts be struck from the by-law.

Most people are aware that by-laws must be approved by the board of directors and then the owners at a meeting. The by-law must be approved by either a majority of the voting units or a majority at the meeting, depending on the type of by-law. We explained this in greater detail in our January 2021 post. Using the process to pass a by-law does not guarantee that the by-law will be valid.

The Act contains a few other requirements for a by-law to be valid. The by-law must be consistent with the Act and the Declaration. Put another way, a condominium cannot create a by-law that attempts to change an obligation or right in its Declaration unless the Act or Declaration specifically permits by-laws to modify the obligation. This is often where a by-law would extend an obligation (i.e. increase the situations where owners may be responsible for insurance deductibles) as opposed to change or remove the obligation.

The by-law must also be reasonable. This requirement is harder to explain. The Act does not define “reasonable”, but reported cases offer some guidance as to what may or may not be reasonable in a condominium by-law. Does it feel like the condominium is trying to regulate an activity that it shouldn’t be? Is the by-law offensive? Is it targeting a specific owner? If the answer is yes, the by-law might be unreasonable (and possibly oppressive). If there is any doubt about the reasonableness of a proposed by-law the condominium should speak to its lawyer.

The last requirement to keep in mind is that the subject matter of the by-law must be authorized by the Act. Section 56 contains an extensive list of subjects, such as qualifications and disqualifications for directors, procedures for owners meetings, and standard unit definitions. There are other parts of the Act or regulations that authorize other types of by-laws, such as sections 21 (easements and leases of common elements) and 57 (occupancy standards). It is important that a proposed by-law fit within one of the permitted subjects or the by-law will be invalid.

The Curse of Covid: Recap of the Top 2020 Stories

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You might have noticed that Annie Bailey’s post (10 Condo Law Highlights of 2020) had a notable omission: COVID-19. Given the overwhelming number of legal changes, reported cases, and news about COVID-19 in condominiums, we decided to dedicate an entire year-in-review post to COVID-19 in 2020. Here is our list of the top ten legislative changes, reported cases, and resources that your condominium need to be aware of heading into 2021 while we continue to deal with COVID-19 and the pandemic.

Levels, Colours and Lockdown – The Spring started with the entire country in lockdown to prevent the spread of COVID-19. As the numbers started to fall, each Province adopted its own strategy for addressing the pandemic. In Ontario, we had levels or stages at one point, which was later changed to five zones (each with a different colour). Each zone has its own restrictions, such as on the number of people attending gatherings, and requirements, such as additional cleaning and contact tracing.

While we appreciate the effort of those working hard to draft all of these legislative changes (often on Friday evenings), it is nearly impossible for anyone to keep up. We previously wrote about the five new categories (https://ontcondolaw.com/2020/11/30/covid-19-five-new-categories/). You can also find a great summary from our friends at CondoAdviser here: http://condoadviser.ca/2020/11/confused-by-colour-zones-and-restrictions-try-our-covid-tool/condo-law-blog-Ontario and the Ontario government has prepare summaries as well, which you can find here: https://www.ontario.ca/page/covid-19-response-framework-keeping-ontario-safe-and-open.

Not sure which colour or zone your area is in? No problem. The Ontario government has a map to help you: https://covid-19.ontario.ca/zones-and-restrictions

https://covid-19.ontario.ca/zones-and-restrictions

Virtual Meetings – one of the many legislative changes during the pandemic was to permit condominiums to hold their owners’ meetings using technology that allows owners to vote using electronic or telephonic means (“virtual meetings”). These meetings were permitted before the pandemic, but condominiums had to pass by-laws to use them. The Ontario government has authorized, via temporary amendment to the Act, all condominiums in Ontario to host virtual owners’ meetings until May 31, 2021 without a by-law. This could be further extended if Covid-19 continues to be prevalent in the Spring of 2021. Need tips about chairing virtual meetings? Head over to the Lash Condo’s blog for some great tips.

It is important to note that initially the legislation extended the time for condominiums to hold annual general meetings. This temporary amendment was not extended and all condominiums must make sure they meet the required deadlines for their AGMs. See our previous post on the deadlines for 2019 and 2020 deadlines: https://ontcondolaw.com/2020/07/30/end-of-the-declared-emergency-your-most-common-condo-agm-questions-answered/ 2021 AGM deadlines should be unchanged.

Court Enforces Covid-19 Policies & Rules – there have been a few reported cases of condominiums successfully enforcing Covid-19 policies and rules where a resident was engaging in conduct that potentially put the other residents at risk. In one case an owner was prohibited from allowing contractors into their units to complete painting and other minor work. In another case an owner was prohibited from allowing contractors to repair a unit that was damaged as it was not an emergency or essential (the owner had another bathroom). See the post by our friends at DHA: https://dhacondolaw.ca/condo-law-news/court-upholds-corporations-covid-19-policy/

New Covid Condo Financing – at least one lender is providing condominiums with a short-term loan option to help with operating cashflow problems this year due to excess cleaning or higher receivables because of owners struggling to pay their condo fees. We previously wrote about this: https://ontcondolaw.com/2020/04/17/covid-19-update-new-financial-option-for-condominiums/

Online Dispute Resolution – it only took a global pandemic, but the courts and tribunals in Ontario have moved into the 21st century! Many matters can be heard via teleconference or videoconference instead of requiring everyone to attend in person. They have expanded the use of electronic filing and service. All of this should reduce costs to the parties and hopefully speed up the process. From a condominium perspective, many mediations and arbitrations can now be held online. There was a great article on online dispute resolution by Colm Brannigan and Marc Bhalla for the CCI-GRC’s blog: https://www.cci-grc.ca/blogs/view/stay-home-stay-safe-and-mediation-online

Webinars – there have been so many great webinars this year to help people keep up with all of the legislative changes related to the pandemic. Many of the CCI chapters have held regular webinars. CCI-GRC even held its first virtual conference in November! While many enjoy the social aspects of the in-person seminars and conferences, the virtual options have many advantages over the in-person ones. I predict a use of both in-person and virtual options once it is safe to have large gatherings again, but for now there are plenty of webinars available for you to keep up.

And that is a wrap for us on pandemic material for the year. Like many of you, we are tired of talking about Covid-19. It is our reality right now, but it does not need to be the only thing we talk about. We will get through this pandemic one way or another.

We wish you all a happy and healthy new year!

COVID-19: Five New Categories

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As you may know, in early November the Ontario government changed from its three stages COVID-19 response model to one with a more regional focus with five different levels. Today, we will briefly summarize the new model and key requirements for each level. It is impossible to provide an adequate summary of the very detailed regulations in a single post without making it 100s of pages in length. Instead, we will provide a list of other resources where you can find more detailed information.

Overview

As mentioned above, there are now five levels in the new model, each with its own restrictions. The five levels are:

Each level has different restrictions and requirements designed to prevent the spread of COVID-19. As the region enters a higher level, the restrictions increase and some businesses or services must close. There are a few similarities in the levels, including but not limited to:

  1. Masks and face coverings that cover the mouth, nose, and chin are required in all indoor public areas, subject to exceptions in regulations (i.e. not in a pool, children under the age of two, people with health conditions that make it hard for them to breathe properly).
  2. Some amenities, like steam rooms and saunas, must close in all levels.

It is important to keep in mind that some municipalities and local medical officers have added additional restrictions or requirements to the provincial health measures. As such, in addition to keeping on top of the provincial measures you should check with your local public health unit or municipality to see if there are any other requirements.

There are a number of regulations, public health orders, and other requirements that condominiums must comply with. A condominium that fails to comply, or ensure residents comply, could face significant fines and penalties.

Prevent – Green

Limits for events and gatherings held in private residences are 10 people indoors and 25 outdoors. Limits for organized public events in staffed facilities are 50 people indoors and 100 people outdoors.

Most amenities can remain open with some restrictions. For example, for recreational fitness facilities, 2m physical distancing is required and face coverings are required, except while exercising.

Protect – Yellow

The Protect level has the same limits on the number of people at gatherings as the Prevent level, but it adds conditions and restrictions. Operators must obtain contact information for tracing, create a safety plan, and limit the number of people who sit together to 6.

Most amenities can remain open with some restrictions. For example, for recreational fitness facilities, 3m physical distancing is required and face coverings are required, except while exercising. Operators must also use a reservation system for entry, obtain contact information, and create a safety plan.

Restrict – Orange

The Restrict level has the same limits on the number of people at gatherings as the Prevent and Protect levels, but adds further conditions. Operators must obtain contact information for tracing purposes, create a safety plan, limit the number of people who sit together to 4, and screen guests in accordance with the instructions issued by the Office of the Chief Medical Officer of Health.

Most amenities can remain open like with the previous levels with some further restrictions. For example, for recreational fitness facilities, all of the requirements of Protect apply plus the following: limit of 90 minutes per person and screening of guests is required in accordance with the instructions issued by the Office of the Chief Medical Officer of Health.

Control – Red

The Control level further limits the number of people at gatherings. For organized public events and gatherings, the limits are 5 people for indoor events and 25 people for outdoor events. Operators must obtain contact information for tracing purposes, create a safety plan, limit the number of people who sit together to 4, and screen guests in accordance with the instructions issued by the Office of the Chief Medical Officer of Health.

Most amenities can remain open like with the previous levels, but there are further restrictions on the number of people. The limit for gyms and fitness studios is reduced to 10 people indoors or 25 people outdoors. The other requirements of the previous levels apply, such as gathering contact information, screening of guests, limiting time to 90 minutes, and creating a safety plan.

Lockdown – Grey

The Lockdown level is the most restrictive. It prohibits gatherings, except with members of the same household. If physical distancing can be maintained, outdoor events of no more than 10 people are permitted. Indoor amenities must generally close, unless condominiums can make “contactless” or “curbside” delivery options work (i.e. delivering books or puzzles to units instead of allowing residents to enter the room to pick them up). Outdoor amenities may be open with some restrictions. There are other restrictions that may limit the use of the units by owners, such as real estate showings by appointment only and limits on short-term rentals after November 22, 2020.

Resources

If you want to find out which level a region is in you can check the Ontario website here: COVID-19 response framework: keeping Ontario safe and open | Ontario.ca

There are three regulations that describe the various requirements:

O. Reg. 82/20 (Lockdown)

O. Reg. 263/20 (Red-Control)

O. Reg. 364/20 (Green-Prevent, Yellow-Protect, and Orange-Restrict)

The Ontario government has also created a guide for holding meetings and events during the pandemic:

Guidance for meeting and event facilities during COVID-19 | Ontario.ca

The Ontario government has a summary on masks and face coverings:

https://www.ontario.ca/page/face-coverings-and-face-masks

Conclusion

Some parts of the regulations are not clear as far as their application to the common elements and amenities within condominiums. The requirements change frequently and with little notice. There are additional requirements at the municipal level that do not always match the requirements at the provincial level. I find it hard to keep track of it all, even as a lawyer who knows how to find legislation and other requirements. Condominiums should ask their managers and lawyers for advice when they need it, especially as their region moves from one level to another.

The Condo Authority Tribunal (CAT) Hears New Matters Starting TODAY!

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Starting on October 1, 2020, the Condominium Authority Tribunal (CAT) will begin to hear more than record request disputes. The CAT’s jurisdiction has been expanded to hear most of the common disputes in condominiums. Specifically, the CAT will hear disputes with respect to any of the following provisions of the declaration, by-laws or rules: pets and other animals; vehicles (the definition is very broad, including boats, aircraft, and vehicles powered by muscular power); and parking and storage.

The CAT will also have jurisdiction to hear disputes related to indemnification or compensation claims related to any of the disputes that it now has jurisdiction over. For example, if the condominium brings an application to the CAT because an owner is not complying with a provision in the declaration about pets it will also be able to ask the CAT for a ruling on its right to be indemnified by the owner according to its declaration.

Section 132 of the Condominium Act, 1998, will also be amended on October 1, 2020 to add the following:

Non-application

(4.1) Subsections (1) and (4) do not apply to any matter in dispute for which a person may apply for resolution under section 1.36 to the Condominium Authority Tribunal established under Part I.2 if the Tribunal has been established under that Part. 2020, c. 14, Sched. 1, s. 18 (1).

This means that mediation and arbitration are not prerequisites for an application to the CAT, which makes sense because the CAT has its own mediation process. It will be interesting to see how this change is interpreted. Do we think mediation and arbitration will continue to be used for these disputes despite the CAT’s jurisdiction being expanded to hear them?

While the expansion of the CAT’s jurisdiction is sure to result in the resolution of matters with less costs being expended than with court and arbitration, there is a significant gap in the CAT’s Rules right now. The CAT’s Rules currently indicate that the CAT will not order a party to pay legal fees “unless there are exceptional reasons to do so”. The CAT’s Rules were amended on September 21, 2020 (I assume to address the expansion), but this rule was not changed. The Rule made sense when it was only record request disputes and the CAT was deciding if the condominium had failed to produce a record when it was required to do so, but now that it is going to hear cases where owners (sometimes blatantly) disregard the declaration, by-laws, or rules, it seems grossly unfair to saddle the innocent owners with the costs of the condominium’s enforcement efforts. Will the expansion of the CAT’s jurisdiction actually result in fewer of these nuisance and enforcement issues being resolved because of the possible costs?

Stay tuned. Hopefully we see further changes to the Rules in the days to come to address this imbalance.

CONDO COVID Q & A

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We are still receiving dozens of questions about COVID each week, ranging from how to host meetings to how to reduce potential liabilities. It looks like COVID is here to stay for a while, so we thought that we would provide some answers to the most common questions from our condominium clients.

Mandatory Masks

Q: Are masks mandatory in condominiums?

A: Not in all parts of Ontario. Some municipalities have implemented mask by-laws that require masks in some parts of condominiums, most often the interior common areas like the elevators, hallways, and amenity areas. Some of the by-laws require condominiums to create policies regarding masks and post specific signage on the entrances. Masks are required (at least in part) in most jurisdictions in Ontario, including but not limited to: Toronto, Ottawa, Peel (Mississauga, Brampton, and Caledon), Hamilton, Waterloo Region, Halton Region (Burlington, Oakville, Milton, and Halton Hills), and Windsor. Condominiums can also create new rules or policies requiring masks even if the local municipality does not require it. A rule is generally seen as more enforceable, but a recent case suggests that the courts may enforce policies in light of the unique situation we find ourselves in.

Meetings & Gatherings

Q: Can / should we hold our meeting in person?

A: Likely not. The Ontario government has restricted gatherings to 10 people inside and 25 people outside. Most lawyers appear to be of the opinion that these restrictions apply to condominium meetings. Even if the condominium is small enough to comply with the guidelines, the potential risks of holding a meeting in person make virtual meetings preferable for the foreseeable future, especially in areas where the daily numbers of reported infections are on the rise, like Toronto, Peel and Ottawa.

Q: Can we hold our AGM virtually without a by-law?

A: The temporary amendments to the Act that were made this past summer permit condominiums to hold meetings using electronic or telephonic means even if a by-law has not been passed by the condominium. These amendments are currently set to expire November 21, 2020. There is some speculation that the period could be extended, but there are no guarantees that will happen. The best option is to hold a virtual meeting before November 21, 2020 to pass a by-law permitting the condominium to hold virtual meetings. This way the condominium will be able to hold virtual meetings virtually even if the temporary amendments are not extended. If this is not possible, it may still be better to hold virtual meetings without a by-law than hold meetings in person during the peak of the second wave. Condominiums should get legal advice about possible options for holding meetings during the pandemic, especially since most condominium meeting hosts are booked into 2021.

Q: Can we hold our board meetings via teleconference without a by-law?

A: Yes. The amendments to the Act in 2017 removed the by-law requirement. All condominiums can use teleconference for their board meetings without a by-law so long as the directors consent. (Note: the consent requirement was temporarily removed this past summer, but it is expected to revert back at the same time as the other temporary amendments).

Amenities

Q: Can / should we keep the amenities open? Can / should we keep the amenities closed?

A: This is a tougher one to answer. It depends so much on the amenity area, the residents, the options for limiting exposure, etc. At a minimum, condominiums will need to comply with any restrictions in place at the time, such as limits on gatherings and mask requirements. Condominiums should also consider the value of the amenity and potential risks. Some amenities provide residents an opportunity to exercise, which is good for overall health and wellness. Other amenities provide an opportunity to learn or relieve stress, like a library. While amenities pose additional risks, many risks can be reduced by limiting the number of users at a time and increasing sanitization. Is there anything wrong in keeping amenities closed during the pandemic? No. It really depends on the condominium.

In-Suite Renovations

Q: Can the condominium prohibit owners from completing work in their units?

A: Yes, condominiums can create policies or rules restricting renovation work in the units. There are now multiple cases confirming the right of the condominium to restrict work in the units right now. This doesn’t mean that all work should be prohibited, but it is reasonable for condominiums to have restrictions in place. For example, some condominiums have prohibited non-essential work, but will permit essential work like plumbing repairs. Other condominiums have guidelines for the contractors carrying out the work to minimize the risks to the other residents.

CCI Grand River Chapter’s Virtual Conference Registration is Now Open!

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The Grand River Chapter is hosting its first Virtual Condo Conference & Tradeshow on Friday, November 20th and Saturday, November 21st, 2020. The Friday event is open to property managers only and will include a special event to kick off the conference, time with a few of the exhibitors in a roundtable format, and ends with a legal debate (which I’m thrilled to be participating in). The Saturday is open to all and will include a number of sessions, ending with an Ask the Experts session featuring various professionals.

Registration for attendees, sponsors and exhibitors is now open. I hear sponsorships are going fast, so make sure you purchase your sponsorships early to avoid disappointment!

For more information, including the agenda, check out the Grand River Chapter’s page: https://www.cci-grc.ca/events/2020/11/20/2020-grand-river-virtual-condo-conference

Upcoming Events!

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Every few months I like to post about some upcoming events that may be of interest to condominium owners, directors, managers, and others. Today, I’ll briefly describe a few of the upcoming events in Ontario.

CCI GRC Level 100: Introduction to Condos (September 12, 2020 9 am)

The Grand River Chapter of CCI is holding its Level 100 course on September 12, 2020. This course is designed to provide an introduction to condominiums for owners and new directors. Register now:

https://www.cci-grc.ca/events/2020/09/12/level-100-introduction-to-condos

CCI GHC Enhanced Virtual Director’s Course (Various dates starting September 14 at 7 pm)

The Golden Horseshoe Chapter of CCI is holding its first ever virtual directors course over 8 nights in September and October. I will be kicking it off on night one with a discussion of the governing documents, the role of directors, records, and privacy issues. For more information, or to register, click here:

https://cci-ghc.ca/events/2020/09/14/enhanced-directors-virtual-course-series-part-1-of-8

CCI GHC CondoTalk (September 15 at 12 noon)

The Golden Horseshoe Chapter of CCI is hosting a virtual webinar over lunch to discuss the authority of the board of directors and dealing with difficult owners. Register now:

https://cci-ghc.ca/events/2020/09/15/condotalk-that-owner-did-what

CAI’s First Virtual Condo Conference (September 16th and 17th)

CAI Canada is holding a two-day virtual conference. The conference includes a virtual exhibit hall with numerous opportunities to chat with exhibitors. There are also various sessions planned, including a keynote, a legal panel, COVID panel, and concurrent sessions on maintenance projects, AGMs, telecommunications, ethics, electric vehicles, and chargebacks. Register now:

https://bondexec.eventsair.com/cai2020/reg2020/Site/Register

CCI London’s AGM & Special Presentation (September 22, 2020 at 11:30 am)

CCI London is hosting its AGM using Zoom with a special presentation on condo safety to follow the business portion of the meeting. Register now:

https://www.cci-sw.on.ca/events/2020/09/22/annual-general-meeting-special-presentation

Lastly, remember to save the date for the CCI Grand River Chapter’s first virtual condo conference on November 20 and 21. The Friday is for property managers only and includes a legal panel discussion. The Saturday is open for all members and non-members and will include 3 concurrent sessions, a Q & A session, and exhibitor hall. Registration and sponsorship opportunities will be available starting September 15, 2020! Space is limited.

The CAT is Growing…

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As you may know, Bill 159, Rebuilding Consumer Confidence Act, 2020, received royal assent on July 14, 2020. Ten statutes are affected by Bill 159, including the Condominium Act, 1998, the Condominium Management Services Act, 2015, and legislation related to the construction of condominiums. On August 25, 2020, a new regulation was made under the Condominium Act, 1998 (O.Reg. 465/20) to expand the jurisdiction of the Condominium Authority Tribunal (CAT).

On October 1, 2020, the CAT will start to hear disputes about people, pets and parking (as well as other disputes). The CAT’s jurisdiction is described in O.Reg. 179/17. Effective October 1, 2020, the following will be added to the regulation:

Note: On October 1, 2020, the day subsections 18 (1) and 19 (2) of Schedule 1 to the Rebuilding Consumer Confidence Act, 2020 come into force, subsection 1 (1) of the Regulation is amended by striking out “and” at the end of clause (b), by adding “and” at the end of clause (c) and by adding the following clause: (See: O. Reg. 465/20, s. 1 (1))

(d) subject to subsection (3), a dispute with respect to any of the following provisions of the declaration, by-laws or rules of a corporation:

(i) Provisions that prohibit, restrict or otherwise govern pets or other animals in a unit, the common elements or the assets, if any, of the corporation.

(ii) Provisions that prohibit, restrict or otherwise govern an automobile, motorcycle, van, truck, trailer, bus, mobile home, farm tractor, bicycle, motor-assisted bicycle, motorized snow vehicle, motorboat, rowboat, canoe, kayak, punt, sailboat, raft, aircraft, device used to facilitate the transport of a person with a disability, or any other vehicle drawn, propelled or driven by any kind of power, including muscular power, in a unit, the common elements or the assets, if any, of the corporation.

(iii) Provisions that prohibit, restrict or otherwise govern the parking or storage of items in a unit, an asset, if any, of the corporation, or any part of a unit, an asset or the common elements, that is intended for parking or storage purposes.

(iv) Provisions that govern the indemnification or compensation of the corporation, an owner or a mortgagee regarding a dispute described in this clause.

In short, the CAT will hear disputes about the declaration, by-laws or rules that relate to: 1) pets; 2) parking and vehicles; 3) parking and storage areas; and 4) indemnification rights related to any of the other disputes within the jurisdiction of the CAT.

Of note, the regulation goes on to state that the CAT will not have jurisdiction for any of the areas described above if the dispute is also related to section 117 of the Act (dangerous condition or activity), section 98 (changes made to common elements by owners), or subsection 24.6(3) of O. Reg. 48/01 (electric vehicle charging stations).

It will be interesting to see how the condo industry reacts to the CAT’s expanded jurisdiction.

Update on Previous Post – Fight Fire with Fire: Seeking Court Orders to Amend the Declaration

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Last year we posted about a case where a condominium commenced an application to the Superior Court of Justice for an order amending its declaration. The condominium wanted amendments to its declaration because of a repair and maintenance issue with the fireplaces in the building. A group of owners with fireplaces filed their own application seeking to have the chimney flues deemed part of the common elements, which the condominium was responsible for maintaining and repairing. They also sought an order requiring the condominium to maintain and repair the chimney flues.

To summarize, the court ordered the declaration amended to make the fireplaces exclusive use common elements, but refused to amend the declaration to require the owners to maintain and repair the fireplaces. As a result, the condominium would be responsible for the repair of the fireplaces while the owners and condominium will continue to share the obligation for maintenance of the fireplaces. Our previous post is available here:https://ontcondolaw.com/2019/08/02/fight-fire-with-fire-seeking-court-orders-to-amend-the-declaration/ Continue reading