As the end of the year approaches, I like to look back at the lessons that I’ve learned (both in my personal and professional life). Over the next two weeks, I’ll share some of those lessons with you. For now, I thought that I’d share the most popular posts of 2016. Surprisingly, none of this year’s most popular posts were actually written in 2016.
5. Making Entry to a Unit
An oldie, but a goodie. This post from 2014 describes the requirements for making entry to a unit or exclusive use common elements: reasonable notice; at a reasonable time; and for purposes related to the objects and duties of the corporation.
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.
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”.