Shared Facilities Disputes

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As I mentioned in my previous post, the most common question that I’m asked about shared facilities agreements is how to terminate them. The reason? Many (if not all) condominiums have disputes related to their shared facilities agreements. Sometimes the problem is the agreement itself. It is difficult to read, has confusing language, or contains inconsistent provisions. Sometimes one or more of the parties refuses to participate in decisions or pay their fair share. Sometimes the agreement is ignored by the parties completely; sometimes they don’t even know it exists!

It is no wonder disputes arise: the Condominium Act, 1998, does not require shared facilities agreements to be fair. As long as the agreement and terms are properly disclosed to the parties it will be enforceable.

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Condo too aggressive; court awards no costs.

A condominium corporation commenced an application against unit owners seeking orders that they obey the rules, be quiet and leave others alone. The owner commenced a counter-application for the same relief against the condominium. Most of the dispute related to the costs of the proceedings. The condominium insisted upon full recovery, or near full recovery, of all of its costs (about $150,000.00) prior to a ruling by the judge. Neither the condominium or owners were successful in their applications. The condominium sought $30,000.00 in costs.

The ruling on costs is one of many made in the past few years where concerns were raised about a condominium’s aggressive stance toward an owner during a legal proceeding. This aggression seems to stem from the condominium’s confidence that it will be entitled to rely upon subsection 134(5) of the Act to recover all or almost all of its legal costs. Subsection 134(5) states: Continue reading

Shared Facilities Dispute Requires Med/Arb Despite Oppression Claim

The Court recently had to determine whether a dispute with respect to a shared facilities agreement must proceed to mediation and arbitration or whether it could be heard in court (see Metropolitan Toronto Condominium Corporation No. 965 v. Metropolitan Toronto Condominium Corporation Nos. 1031 and 1056 (2014) SCJ).

The plaintiff, a condominium, brought an application against two other condominiums claiming they had breached the shared facilities agreement (SFA) they were all parties to. The plaintiff condominium also alleged that the other two condominiums were acting oppressively. The defendants brought a motion asking the court to stay (put a stop to) the action and order arbitration. The defendant condominiums argued that the shared facilities agreement required arbitration of disputes. They also argued that section 132 of the Condominium Act, 1998 required mediation and arbitration of disputes with respect to shared facilities disputes. The plaintiff condominium argued that mediation and arbitration was not required because it was seeking relief under section 135 of the Condominium Act, 1998 (oppression).   Continue reading