Spring Break Reading: The CAT Edition

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The Condominium Authority Tribunal (CAT) has been busy so far in 2021. As of April 13, 2021, the CAT has released 30 decisions. Many of the decisions still relate to record requests, but there have been a few about other issues that it now has jurisdiction to hear, like pets and parking. Some cases were about procedural matters, like the application of the CAT rules. Some cases were about the jurisdiction of the CAT when other courts or tribunals also have jurisdiction over the dispute.

2021 ONCAT 27 : the CAT heard two motions from a condominium requesting the CAT dismiss or merge four cases and rule that the conduct of the applicants was vexatious. The CAT did not dismiss the cases, but the CAT ordered the applicants to choose which of their cases would proceed. The CAT also found that one of the representatives had repeatedly violated the CAT’s rules. He was not qualified to be a representative because he was not a lawyer, paralegal, or condo manager, and the CAT was not convinced he was a “friend” of the corporate applicants. Despite a ruling by the CAT that he was not qualified, he continued to monitor email, reply for the applicants, and submit documents for them. The CAT ordered the applicants to change their representative and provide updated email addresses to the CAT that the “friend” could not access.

2021 ONCAT 25: The CAT merged three cases brought by an owner against his condominium to provide the most fair, focused, and efficient process for both parties. The three cases related to: 1) parking rules; 2) pet rules; and 3) a record request for pet rules.

2021 ONCAT24: An owner requested two contracts from the condominium, which the condominium refused to provide because of the owner’s history of making complaints about the manager. The CAT found that complaining about your manager is not a valid reason for a condominium to refuse a valid request for records. The CAT awarded the owner $200 in costs and a penalty of $2,000.

2021 ONCAT 21: An owner filed a case against their condominium and a neighbour regarding a basketball net placed by the neighbour on their driveway. The condominium claimed it was not a violation of the rules and the owner asked permission to place the net on the driveway. The CAT found the basketball net was not contrary to the declaration or rules, but awarded the applicant $200 for filing fees because it was a novel issue within a new area of jurisdiction for the CAT.

2021 ONCAT 20: The owner brought a motion to defer the CAT case because they had already filed an application with the Human Rights Tribunal of Ontario (HRTO). The condominium was aware of the HRTO case when it filed the CAT case. The condominium acknowledged that it had a duty to accommodate the owner because of her disability. The condominium sought to require the dog to wear a muzzle in common areas. The CAT found the dispute was about the application and exemption of the condominium’s rules. The CAT dismissed the motion as it had jurisdiction to hear the dispute.

2021 ONCAT 18: The owner filed a case against her condominium and a neighbouring condominium about parking. The two condominiums shared a visitor’s parking area, which the owner sought to use. The case was dismissed as the time for filing the case had expired. She failed to bring an application within 2 years after the dispute arose, namely when she was denied permission to use the visitor parking area. The CAT did not rule on whether a claim by the owner for accommodation due to a disability would also be out of time under other legislation.

10 Condo Law Highlights of 2020

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2020 has been an eventful year, to say the least. With everything else going on in the world, who has time to stay on top of changes in condominium law? We do! And so to help you out, we’ve prepared a list of 10 changes and decisions in condominium law in 2020 that you won’t want to miss.

  1. The Condominium Authority Tribunal (the “Tribunal”) expanded its authority

Starting on October 1, 2020, the Tribunal’s jurisdiction expanded to include hearing disputes based on provisions in a condominium’s declaration, by-laws, or rules regarding: (a) pets, (b) vehicles, (c) parking/storage, and (d) indemnification/compensation related to the disputes in (a)-(c). This means that disputes in these categories can now be heard using the Tribunal’s streamlined dispute resolution process instead of going to court.

  1. The new Condo Guide for pre-construction and newly-built residential condo purchasers

The Condominium Authority of Ontario released a new Condominium Guide which, starting January 1, 2021, must be delivered to all potential purchasers of pre-construction and newly-built residential condominium units. The Guide will give these purchasers more information on condominium construction and condominium living. For more information on the Condominium Guide, see our previous post here: https://rcllp.ca/condo/?p=499

  1. “Adequate” condo records need not be perfect

Condominiums are required to keep adequate records. The Tribunal confirmed that “adequate” means the records must allow the condominium to fulfill its duties under the Condominium Act, 1998 (the “Act”). To do so, “adequate” records must be accurate but need not be perfect. The level of accuracy required for a record to be “adequate” may vary depending on the record in question. For example, minutes of board meetings are held to a high standard because they look back on facts which should be certain and known, and they serve the important purpose of making the board’s affairs open to the owners. Read the full case here: https://www.canlii.org/en/on/oncat/doc/2020/2020oncat33/2020oncat33.html?resultIndex=1

  1. A condominium cannot impose conditions before releasing records to owners

The Tribunal determined that a condominium cannot impose conditions before providing requested records to an owner. If the records are properly requested by the owner, the condominium must either provide them or refuse to provide them (with a reasonable excuse for the refusal). By imposing conditions, the condominium effectively refused to provide the records. Read the full case here: https://www.canlii.org/en/on/oncat/doc/2020/2020oncat2/2020oncat2.html?resultIndex=1

  1. Comply with Tribunal orders or face cost consequences in court

The Tribunal ordered the condominium to provide records to the owner within 30 days. The condominium did not comply, so the owner took the matter to court. The condominium provided the records to the owner before the court hearing date, yet because the condo had still breached the Tribunal’s order, the court ordered the condominium to pay the owner’s legal fees and disbursements totalling $14,716.91. This serves as a reminder that timelines in Tribunal orders must be complied with, and that Tribunal orders may be enforced in court. Read the full case here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc189/2020onsc189.html?resultIndex=1

  1. Condominium directors not held personally liable for board decisions

A declarant claimed that the condominium’s directors acted oppressively toward the declarant. The court determined that the claims could not succeed against the directors personally. The directors’ decisions in question were decisions relating to day-to-day activities of the condominium without personal gain, and therefore even if the directors made the wrong decisions, this did not justify a personal order against them. Read the full case here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc6445/2020onsc6445.html?resultIndex=1

  1. Significant cost consequences of acting unreasonably  

After succeeding in a case against his condominium, an owner sought a court order for the condominium to cover the costs he had incurred. The court ordered the condominium to pay $83,340 in costs to the owner. The court granted this unusually high costs award because the owner had acted reasonably throughout the matter whereas the condominium was unreasonable and aggressive. Let this serve as a reminder and a warning that unreasonable, aggressive behaviour from a condominium may have significant cost implications. [Note: the decision was unsuccessfully appealed by the condominium, resulting in another $30,000 costs order payable to the owner]. Read the full case here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc1190/2020onsc1190.html?resultIndex=1

  1. The Act will be interpreted to protect owners

A third party claimed that a condominium’s action against it was a nullity because the condominium did not properly notify the owners of the action under section 23 of the Act. The court held that it would be inconsistent with the Act, which is designed to protect owners, to render an action a nullity where doing so would actually be detrimental to the owners. The condo commenced this action for the benefit of the owners and therefore it was allowed to proceed despite not providing proper notice to the owners. Read the full case here: https://www.canlii.org/en/on/onca/doc/2020/2020onca63/2020onca63.html?searchUrlHash=AAAAAAAAAAEADVNPIDE5OTgsIGMgMTkAAAABAA4vNjY1LWN1cnJlbnQtMQE&resultIndex=3

  1. Tenant’s excessive noise was a breach of the condominium rules

A tenant in a high-rise condominium repeatedly made excessive noise. The neighbouring tenant repeatedly made noise complaints to property management. The condominium took steps to get the noisy tenant to stop, and when those failed, the condominium filed a court application to enforce compliance with the Act and the condominium’s rules. The condominium succeeded. Not only was the tenant ordered to comply with the Act and the rules, she also had to pay condominium’s costs of $23,250. Read the case and costs decision here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc196/2020onsc196.html and https://www.canlii.org/en/on/onsc/doc/2020/2020onsc3853/2020onsc3853.html?searchUrlHash=AAAAAAAAAAEADVNPIDE5OTgsIGMgMTkAAAABAA4vNjY1LWN1cnJlbnQtMQE&resultIndex=5

  1. Another noise complaint

In the case above, the condominium and the neighbouring tenant worked together to deal with the loud tenant. In contrast, this is a case initiated by an owner against her condominium for failing to take sufficient action to deal with her noisy neighbour. The court determined that the condo could have done more but still acted reasonably, so the claim was dismissed. Noise can be a serious issue in condos, and condos should balance the competing interests of the parties when dealing with these disputes. Read the full case here: https://www.canlii.org/en/on/onsc/doc/2020/2020onsc1262/2020onsc1262.html?searchUrlHash=AAAAAAAAAAEADVNPIDE5OTgsIGMgMTkAAAABAA4vNjY1LWN1cnJlbnQtMQE&resultIndex=6

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