Condo Ignores Condo Authority Tribunal (CAT) Requests to Join Case

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A recent CAT decision serves as a good reminder to condominiums of the consequences for refusing to participate in the process.

The owner requested various records from the condominium twice. The condominium had its lawyer respond indicating that it had no obligation to respond because the owner had not used the mandatory form. The lawyer provided a copy of the request form with the letter and indicated that they would respond to the request once it was submitted on the proper form. The owner completed the form and sent a copy via fax to the lawyer and manager. The condominium did not respond so the owner filed a case with the Condominium Authority Tribunal (the “CAT”).

The owner provided notice of the CAT case by courier to the condominium at the management office. The CAT clerk even contacted the condominium twice to ensure they received the notice. The condominium still did not join the case. The condominium did not participate at any point and the process continued without it.

There is an interesting discussion of records requested by the owner that related to a civil action commenced by the condominium against the builder and developer. The action was funded by a special assessment and eventually settled with a payment to the condominium of $1.7 million. The owner was concerned because there was apparently a discrepancy between the settlement amount and the amount received by the condominium ($700,000) so the owner sought an accounting of the amount as well as the settlement agreement. After reviewing sections 55 and 23 of the Act, the CAT member found the owner was entitled to see the settlement agreement.

The CAT ordered the condominium to provide all of the records requested by the owner and pay a penalty of $3,000 for its refusal to provide the records without reasonable excuse. The CAT also awarded the owner costs of $150 (the filing fees paid to the CAT by the owner).

While $3,000 is a significant penalty for many condominiums, I wonder if it is enough incentive for some of the larger condominiums with multi-million dollar budgets. Clearly some are still choosing to ignore record requests by owners (and apparently direct contact from the CAT clerk). What will it take to get them to respond? $10,000? Personal liability on the directors? A summons? Fortunately, most condominiums comply with their obligations when records are requested.

The full case is available on CanLii: https://www.canlii.org/en/on/oncat/doc/2019/2019oncat44/2019oncat44.pdf

The CAT’s Meow – New Tribunal Decisions

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The CAT has been busy this month releasing three new decisions. Obviously, the issues relate to record requests. All three cases have some interesting commentary on the circumstances when the CAT will award legal costs and penalties.

Lahrkamp v. Metropolitan Toronto Condominium Corporation No.
932, 2019 ONCAT 4

The owner filed a claim with the CAT for records. Previously, the condominium obtained an order from the Superior Court of Justice to declare the owner a vexatious litigant. The CAT member found the owner’s claim vexatious and dismissed it. That was not the end of it. The condominium sought over $12,000 for costs of its involvement in the CAT hearing and $22,000 after further submissions were made! Continue reading

New Help Guides & Factsheets!

I received an email from the Ministry of Government and Consumer Services (MGCS) today about some free resources it recently created. The MGCS has released two very useful (and free) guides on the amendments to the Condominium Act, 1998, and the Condominium Management Services Act (CMSA):

In addition to the two plain language guides, the MGCS also released four documents to assist people in dealing with requests to records, both core and non-core.

Our firm had previously prepared flowcharts for our clients, but these ones are definitely nicer looking! That said, it would have been nice if the record flowcharts included the deadline for the requester to reply to the board’s response. The forms indicate that a reply is required, but the more times it is said the more likely people are to remember that they must reply or their request may be deemed to have been abandoned.

To access the above guides and factsheets visit:

http://mailchi.mp/bd62beeb85b5/new-requirements-for-the-condo-sector-in-2018-and-helpful-guides-to-the-recent-condo-law-changes?e=de7b6cdd50

FAQs: Owner Edition

Like any blogger, I regularly receive emails from people about my posts. Sometimes it is managers. Sometimes directors. Often it is frustrated owners with no where to turn for answers. Sometimes there is a legitimate reason for their frustration (i.e. the board made a decision contrary to the Act), but often it is because the owners have misinterpreted a provision of the Act or the declaration, by-laws or rules. I thought that I would take a few minutes today to answer some of the most common questions that I receive from owners in hopes that it eases the tension in some condominiums.

Question: “My board changed management companies without a vote of owners. Can they do that?”

Answer: Yes, in most instances. The board is responsible for managing the affairs of the condominium, which includes the manager. In some circumstances, such as where the condominium goes from self-managed to professionally managed, the board may want to get a legal opinion before making the change to ensure it does not trigger any of the notice requirements of Act.

Question: “One of the board members quit. The other ones replaced her without a vote of the owners. Can they do that?”

Answer: Yes, in most instances. Section 34(2) of the Act permits the board to appoint a qualified person to hold office as a director until the next AGM as long as a quorum remains in office. For instance, a 3 member board has 1 person resign. The other 2 can appoint a director. If 2 people resigned the remaining director would need to call an owners’ meeting to elect new directors pursuant to section 34(4) of the Act.

Question: “The property manager wants me to pay to get a copy of minutes and other documents. Can they do that? What is a reasonable rate?”

Answer: Yes. Section 55(6) of the Act permits the condominium to charge a “reasonable fee” for copying and labour charges. What is reasonable? There is no prescribed amount. It should depend upon the circumstances, such as the location of the record (i.e. electronic or paper copy) or its length (i.e. 2 pages or 100). Many management companies have a charge set out in their management agreements that sets out the fee that they will charge the condominium for record requests. That same amount is often used as the fee for the owner.

Question: “One of the directors sold his unit. He didn’t resign. Can he be a director if he doesn’t own a unit?”

Answer: Yes, if the by-laws allow it. Some condominium by-laws require directors to also be owners of the units, but some do not. You have to read your by-laws.

That’s all for now. I’ll answer some more questions next month.

Condo Reform #4 – Governance: Records and Meetings

Condominium communities are small democracies with their own set of unique challenges. Like many democracies, the board of directors is often criticized by the owners for the decisions made, or not made, but are rarely praised for their hard work. Given the wide range of values, interests, and characteristics of condominium inhabitants, it not surprising that governance issues account for a large proportion of the disputes that arise in condominiums.

Given the importance of proper governance to the financial health and stability of condominiums, the working group made several recommendations to improve the governance of condominiums. The recommendations were in five key areas:

  1. Access to Records & Information
  2. Meetings
  3. Directors and Officers
  4. Fines
  5. Owners’ & Directors’ Rights & Responsibilities.

Continue reading