Condo Declarations Are Not Carved In Stone

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One of our first posts of the year was on the requirements for making, amending, or repealing by-laws. In response to that post we were asked about the requirements for making, amending, or repealing rules. This lead to our third post of the year. If you haven’t read both posts make sure you go back and read them. Today, we will briefly describe the options for changing a condominium’s declaration or description (sometimes called the “survey” or “plans”).

The Condominium Act, 1998 (the “Act”) describes three methods for amending a declaration and/or description: 1) with consent; 2) with an order of the Director of Titles; and 3) with a court order. It is important to note that the Act allows a condominium to update its address for service or mailing address without amending the declaration. For more information, see section 108 of the Act.

With Consent

The most popular method of amending the declaration and/or description is to do so with the consent of the owners. If the amendment includes a change to the proportions of ownership or contributions to the common expenses, the exclusive use common elements, or maintenance and repair obligations, it requires the consent of the owners of 90% of the units. All other changes require 80% of the units. Ask your lawyer for a definition of “units” for the purposes of a declaration or description amendment.

I should note that this method may also require the consent of the declarant if the declarant has not transferred all of the units (except telecommunications units) and less than three years has elapsed from the later of the registration of the condominium and the date the declarant first entered into an agreement of purchase and sale for a unit.

Once the board of directors are satisfied with the proposed amendment they must call a meeting of owners to present the proposed amendment to the owners. The normal process for calling a meeting is used, including the use of the prescribed forms and the normal timeline. The notice of meeting must include a copy of the proposed amendment. The board must collect the written consent of the owners, but the consent does not need to be collected at the meeting. The amendment must be registered in the land registry office before it becomes effective.

With an Order from the Director of Titles

The Act also permits condominiums to amend the declaration or description without the approval of the owners in certain circumstances. Section 110 of the Act states that a condominium (or another interested person) may apply to the Director of Titles appointed under the Land Titles Act for an order amending the declaration or description to “correct an error or inconsistency that is apparent on the face of the declaration or descriptions, as the case may be.” The amendment is not effective until a certified copy of the order is registered on title to the units.

Our office has seen this process used where there was a minor typo found in the declaration, such as where it referred to the wrong instrument number for a document or it referred to levels that did not exist. The Director of Titles has refused requests where the error or inconsistency appeared to be obvious to us, such as where there was an inconsistency between the unit boundaries in the declaration and those in the description.

With a Court Order

The Act also permits condominiums (or an owner) to seek an order from the Superior Court of Justice to amend the declaration or description without the approval of the owners. Notice of the application must be given to the condominium and every owner and mortgagee whose name appears in the condominium’s records. The judge must be satisfied that the “amendment is necessary or desirable to correct an error or inconsistency that appears in the declaration or description or that arises out of the carrying out of the intent and purpose of the declaration or description.” The amendment is not effective until a certified copy of the order is registered on title to the units.

The courts have also ordered declarations and descriptions (and other documents) to be amended in other circumstances. For instance, if the declaration is oppressive, unfairly disregards an owner’s interests, or unfairly prejudices them, it is possible that a court would order the condominium to amend the declaration if an application is brought by the owner under section 135 of the Act (oppression remedy). This is very rare. See an old post for further information: https://ontcondolaw.com/2014/06/06/owner-successfully-applies-to-court-for-amendment-to-declaration/

We previously wrote a single post summarizing the requirements for changing declarations, by-laws and rules. I encourage you to review it if you want a more succinct version of our last three posts. You can find it here: https://ontcondolaw.com/2018/08/29/amending-the-condo-documents/

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

brown beside fireplace near brown wicker basket

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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

Amending the Condo Documents

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Lately our firm has been working on a lot of revisions to condominium documents: the declaration, description, by-laws and rules. Cannabis has been a very popular topic these past few months. Some condominiums are updating their condominium documents to reflect changes to the Condominium Act, 1998. Others are making changes to the number of directors or their qualifications.

Many clients complain that the process to change their documents is confusing. The main reason for the confusion is that each type of document has its own process to change it. The purpose of this post is to describe the basic process to change each of the documents.

Continue reading

My Favourite Condo Lessons of 2017

2017

Just as I did last year, I’ve put together a list of my favourite condo lessons for 2017. Every condo director, owner, manager, and other person living in or working for condominiums should know these lessons:

10. An owner cannot bring apply for a minor variance from a zoning by-law for common element parking spaces. The board of directors is obligated to manage the common elements, which includes applying for any minor variances that may be required for the common elements. A different result may have occurred if the owner had the exclusive use of all of the common elements the minor variance would apply to, but in this case the owner only had exclusive use of 6 of the 82 parking spaces. Read our post on the case here: https://ontcondolaw.com/2017/10/03/who-can-apply-for-a-minor-variance-for-the-common-elements-condo-or-owner/

9. Only lawyers should register liens. Most lawyers jumped for joy when a decision about a lien was released in May of this year. During the trial a report from the Law Society was produced to show that, in the eyes of the Law Society, a paralegal is not authorized to register liens; only lawyers should register liens. The interesting part is that in most firms the law clerks, not lawyers, register liens. And don’t get me started on lawyers who give their clerks access to their registration keys…yikes. Here is our previous post on the topic: https://ontcondolaw.com/2017/05/29/is-lien-work-really-for-lawyers-only/

8. Condos can charge interest at almost criminal rates. A case this summer confirmed that a condo can charge interest at 30% above the prime rate if a by-law authorizes it. For  more information, read the MTCC 1067 v. 1388020 Ontario Corp. case available here: https://www.canlii.org/en/on/onsc/doc/2017/2017onsc4793/2017onsc4793.pdf

7. Green energy initiatives are becoming increasingly popular as hydro costs soar and the government is making it easier for condos to implement some of them. For instance, submetering of the units for electricity consumption does not require the approval of the owners; the board can implement it by resolution of the board alone. Condos cannot prohibit clotheslines, but may have restrictions or conditions for their use. For more information, see our previous post on green energy initiatives: https://ontcondolaw.com/2017/05/10/green-initiatives-in-condos/

6. Similarly, electric vehicles and charging stations are likely to be a hot topic in future years as demand for electric vehicles increases.  For more information on some of the legal issues associated with electric vehicles and charging stations see our previous post: https://ontcondolaw.com/2017/04/27/electric-vehicles-in-condos/ 

5. Degrading and harassing behaviour may be prohibited by section 117 as it may be likely to cause psychological harm.  Some owners abuse managers and directors with vulgar language, yelling, and threats. The court has indicated that extreme cases would violate section 117, which prohibits conduct that is likely to cause injury to persons or damage to the property. It would also constitute workplace harassment, which condominiums have a duty to protect their workers from. See our previous post on: https://ontcondolaw.com/2017/04/23/if-you-cant-say-something-nice/

4. Owners need to be careful about sending defamatory emails to other owners and residents. Where an owner sends defamatory emails about directors or the manager, the condominium may obtain an order directing an internet service provider to disclose info to the condo to enable it to identify the person. Defamation is a communication that tends to lower the esteem of the subject in the minds of ordinary members of the public. For more information or to read the case in its entirety, see our previous post: https://ontcondolaw.com/2017/07/26/defamation-in-condos-an-update/

3. The courts will not amend a declaration because an owner feels it is inconsistent with the Act or unfair. The courts have confirmed that their involvement in such matters is limited by the Act to situations where there is an error or inconsistency in documents or where the documents are oppressive. The court will not interfere with validly passed by-laws either. For more information, read our previous post: https://ontcondolaw.com/2017/08/22/summer-case-law-reading/. For a more recent decision by the courts, see the following case: https://www.canlii.org/en/on/onsc/doc/2017/2017onsc6542/2017onsc6542.html

2. Many more condos may make the switch from self-managed to professional managers in 2018 and beyond because of the next lesson on this list. For more information, see our post for self-managed condos: https://ontcondolaw.com/2017/12/18/self-managed-condominiums/

And the top lesson of 2017 (it was also the top for 2015 and 2016) is…

1. The Protecting Condominium Owners Act, 2015. Unless you have been living under a rock for the past year, you know the Condominium Act, 1998, (and a number of other statutes) were amended this year. Some of the key changes in force now include:

  • The creation of the Condominium Management Regulatory Authority of Ontario (CMRAO) to oversee condo managers. [www.cmrao.ca].
  • The mandatory licensing of condo managers by February 1st, 2018.
  • The creation of the Condominium Authority of Ontario (CAO) to oversee condos. [www.condoauthorityontario.ca].
  • The creation of the Condominium Authority Tribunal (CAT) to hear condo disputes. The CAT’s jurisdiction is currently limited to record disputes, but the intention is to extend it to other areas in the future.
  • Mandatory training for directors and disclosure obligations for candidates for the board of directors.
  • A new process for calling owners’ meetings, including new forms for the preliminary notice, notice, and proxies.
  • Allowing teleconferencing for board meetings without a by-law.
  • Reducing quorum for owners meetings after two unsuccessful attempts to achieve quorum.
  • Reducing the approval level required for certain by-laws, like adding disclosure obligations for candidates.
  • More communications with owners in the form of three new certificates: periodic information certificate, information certificate update, and new owner information certificate.
  • A new record request process where owners, mortgagees or purchasers want to obtain records of the condominium.

There are new forms associated with many of the changes described above. The forms are available here: https://www.ontario.ca/search/land-registration?openNav=forms&sort=desc&field_forms_act_tid=condominium

The deadline for registering condos was recently extended to February 28, 2018. For more information, visit the CAO’s website.

More changes are coming on January 1st, 2018. You can read about those here: https://ontcondolaw.com/2017/12/12/amendments-coming-january-1-2018/

More changes will come into force on February 1st, 2018 and later in 2018 (and maybe early in 2019). Changes still to come include:

  • The regulatory part of the licensing of managers, such as a complaints and discipline process.
  • Extending warranty coverage through Tarion to residential conversion condominiums in some instances.
  • A process for preparing a budget and notifying owners of changes to it.
  • A process for charging costs back to owners (i.e. infractions, damage).

Stay tuned! Next year should be full of lessons as more of the amendments are released and we have an opportunity to interpret them.

Summer Case Law Reading

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Who doesn’t enjoy a little case law reading by the pool or beach? Oh, that’s just me? Oh well. I hope you enjoy reading these brief summaries anyway.

MTCC No. 1067 v. 1388020 Ontario Corp. 

This is an action by a condo to enforce a lien. The condo brought a motion for summary judgment. There were three issues: interest on the arrears of monthly fees; additional expenses claimed by the condo; and legal costs.

The condo claimed interest at a whopping 30% above the prime rate charged by TD to its best risk commercial accounts per annum, compounded monthly. The defendant argued that the condo was not entitled to such a high rate of interest because it could not provide precise, consistent statements to show it was entitled to the full amount. The judge disagreed. The by-law was a contractual arrangement between the owner and the condo and there was no reason not to enforce it.  Continue reading