Fight over 14% budget increase leads to court battle

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Most unit owners would be upset to receive notice that their monthly condo fees were increasing by almost 15% the following year. Recently an owner was surprised when she received notice from her condominium of a 0% change in her monthly fees.  She was expecting an increase close to 15%. Was she pleasantly surprised? Apparently not as she commenced an application in the Superior Court of Justice against the condominium and one of its five directors.  Continue reading

Ambiguous Condo Docs Cause Another Dispute

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bookI’m often asked to review condominium documents because the language used is not clear. One reason is the legalese used by many lawyers when drafting the documents. (“Now herewithin witnesseth” really?). Do we think it makes us sound smart? Whatever the reason, it needs to stop!

If we want the owners to read the documents (and we should) we need to make them easy to read. The owners shouldn’t need a law degree to understand them! Plain, clear, and unambiguous language needs to become the norm.

Why am I ranting about this today? Because I just read another case where a dispute arose because of unclear language in the declaration.

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Chargeback or Fine?

I’m often asked by directors if they can fine owners for unruly or disruptive behaviour, like excessive noise or improper parking. The simple answer in Ontario is no. While a condominium cannot fine an owner, it may be able to charge some costs back to the offending unit owner in certain circumstances. This process is typically referred to as a “chargeback”.

The Condominium Act, 1998, is clear that a condominium may only lien an owner for “common expenses”, which according to the Act are “expenses related to the performance of the objects and duties of a corporation and all expenses specified as common expenses in this Act or in a declaration”. It is noteworthy that it says the Act or declaration, not the by-laws or rules. This seems to suggest that an indemnification clause in a by-law or rule is not sufficient, in itself, to support a lien against a unit for a chargeback.

A provision in a by-law or rule may be sufficient to support a lien against a unit for a chargeback if it is authorized by the Act. For example, a condominium may pass a by-law extending the circumstances where a deductible may be charged back to an owner. While the provision is within a by-law, it is enforceable because of section 105 of the Act, which authorizes a condominium to pass such a by-law.

This is a controversial topic. Many lawyers ignore the definition of “common expenses” in the Act and rely upon provisions in rules and by-laws, without further support, to charge costs back to owners. If you have any doubts about the condominium’s ability to charge back an amount to an owner you should discuss it with the condominium’s lawyer or property manager.

For more information, see the Ontario government’s website.

 

Condominium Fines & Chargebacks

Every so often I have a client ask me if they can fine a unit owner because of behaviour that is annoying (i.e. constantly paying their fees late) or unsavoury (i.e. rude or vulgar language). Unfortunately for condominiums (and fortunately for the offending owners), condominiums in Ontario cannot fine unit owners for their undesirable behaviour. However, there are other charges that may be levied against a unit because of the behaviour of the unit owner or occupant. These are typically referred to as “chargebacks”.

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