The Ontario Condo Law Blog

The Ontario Condo Law Blog

Serving Ontario's condominium communities since 2008

Watch Out: Developers limiting their liability for building defects

Posted in Buying and Selling, Case Studies, Construction Deficiencies, Declaration, By-Laws & Rules

MC900300842As the buying frenzy for new condos continues, a growing trend threatens to leave purchasers poorly protected against construction deficiencies.   Purchasers and their lawyers should pay attention.

In recent years, some developers’ agreements of purchase and sale for new units began including limits on the developers’ warranties for those units.   But that wording would usually not prevent the condo corporation from making claims for construction defects in the common elements.  That has changed.

More recently, some developers will make agreements between themselves and the condo corporations under their control in the early days after registration, where the corporation releases the developer from all warranties and claims for construction deficiencies except for the minimal coverage under the Tarion new home warranty.   Those agreements might be authorized and registered on title to all the units using a condo by-law.

The result is that the condo corporation turned over to its purchasers has no legal recourse against its developer for construction deficiencies, other than to make claim under the Tarion warranty, known for its many shortcomings and limitations.   This leaves the condo corporation having to pay the cost to repair most construction deficiencies from its own funds, leading to rapid increases in common expenses and surprise special assessments.

What makes this slick practice legally acceptable is that the release agreements and authorizing by-laws are disclosed to purchasers as part of the disclosure materials and the by-laws are registered on title following the condominium’s registration, thereby giving the world fair notice.   But is fair notice enough?

Continue Reading

Court and Tribunal Roundup to October 24, 2014

Posted in Case Studies

In addition to people, pets and parking issues, this autumn’s harvest of condo-related court and tribunal decisions includes a bumper crop of court of appeal cases dealing with:

  • Expired condo liens;
  • Contempt of court by directors;
  • Bylaws permitting in-house “ethics reviews” for directors; and
  • Bylaws releasing developers from construction warranties.

Plenty of interesting reading.

HRTO spills much ink on proper naming, identification of respondent condo corporation, directors and managers. http://canlii.ca/t/g90f6 

ONCA upholds condo bylaw releasing devl’per from all construction warranties except Tarion. http://canlii.ca/t/gf1qs  Buyers & lawyers beware.

ONCA: Expired condo lien rights can’t be revived. Unpd common expenses aren’t damages recoverable by compliance order http://ow.ly/CK1zH 

ONLST: Lawyer to pay $172K cost of prof misconduct investigation & prosecution re handling her own condo devlpmt. http://canlii.ca/t/gdqsv 

HRTO: Only written settlements of human rights disputes are enforceable. http://canlii.ca/t/g8zkw  Dismissal of case is relevant too, no?

ONSC: Condo corp may enter unit and remove dogs itself since owner won’t comply with earlier ruling. $10K in costs. http://canlii.ca/t/g8r77 

ABQB: Condo owner can’t avoid/delay paying special assessment while his dormant counterclaim is pending. http://canlii.ca/t/g8r0f 

ABQB philosophizes and then splits the difference in condo pet rule enforcement case. http://canlii.ca/t/g8r27 

ONLRB sets the stage for YCC 42 to become a unionized workplace. As if things can’t get any worse for this condo. http://canlii.ca/t/g835r 

ONLRB: With no protest from condo bd, security workers at infamous YCC 42 (320/30/40 Dixon Rd. Toronto) may unionize. http://canlii.ca/t/g8gwf 

ONSC converts seemingly complex condo shared facilities dispute from application to action. http://canlii.ca/t/g8lp0 

ONCA affirms condo bd’s contempt for breaching order but reduces penalty, reserves on $97K cost of contempt motion. http://canlii.ca/t/g8gcz 

ONCA upholds condo by-law permitting board to disqualify directors after an “ethics review.” http://canlii.ca/t/g83w9 

ONSC: Unit owner to pay her condo corp $49K for legal costs of lengthy rule enforcement case that settled late. http://canlii.ca/t/g80bl 

ONSC: Meeting requisition with owners’ names printed (not signed) still valid. Condo Act to be construed liberally. http://canlii.ca/t/g7shd 

HRTO removes condo directors from ethnic origin complaint but case vs. condo corp and mgmt firm to proceed. http://canlii.ca/t/g7ghc 

ONSC evicts unit owner and guest for breaching court orders. OPGT controls the owner’s property; will likely sell it. http://canlii.ca/t/g7mrr 

ONCA slashes two-thirds of the costs payable by condo directors for breaching court order. http://canlii.ca/t/gf1t9  Guess who pays the diff.

If you prefer to learn of these cases within hours or days of them being posted, just follow me on Twitter.

 

Learn to terminate condo corporations like a pro

Posted in Publications & Resources

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It is estimated that almost 9,000 condo corporations have been created in Ontario since 1967, but no more than a half dozen have ever been terminated.

To explore a relatively obscure but increasingly important area of our condo law, the Real Property and Civil Litigation sections of the Ontario Bar Association have teamed up to present an educational session on court-ordered termination of condo corporations on Monday Tuesday, September 22, 2014.

Here’s the blurb:

The recent termination of Simcoe Condominium Corporation No. 32 is believed to be the first termination of an Ontario condominium corporation under court supervision and one of only a small handful of condo terminations in Ontario’s legal history. Attend this program to hear directly from the lawyers who handled the termination of SCC 32 about the steps and procedures undertaken to terminate a condominium corporation. Through this, you will gain practical insight into a novel area of condominium law – one that may become increasingly pertinent to both real property and litigation lawyers as older condominium corporations begin to reach structural life expectancy.

The program is open to members and non-members (including non-lawyers), either by attending in person at the OBA in downtown Toronto or by live webcast at a computer near you.

If you’re downtown, consider attending in person. The hospitality is warm and the food is good.

Those outside Toronto (or too shy to dine amongst a room full of lawyers!) or people pressed for time can opt for the live webcast option at a reduced price ($40 for members and $60 for non-members).

Here are registration links for attending in person, and for live webcast. Please be careful to choose your desired option (in-person vs. live webcast) accurately.

The evening includes Q&A with the speakers.  As program co-chair, I would be glad to ask the speakers your questions if you send them to me in advance. Alternatively, ask them yourself at the in-person session or submit them electronically during the webcast.

I’ll be back.

Condo Act reformer moves on to new challenges

Posted in News and Events

After this long weekend, many of us following Ontario’s Condo Act Review process will refocus on the imminent tabling of a draft new Condo Act. Those involved in the review process found it to be an innovative and interesting one that was championed by a senior government official who, sadly, will not be returning to work on condo law reform on Tuesday.

Giles Gherson, Ontario’s Deputy Minister of Consumer Services since 2011, is credited as a driving force behind the multi-stage public engagement review process to modernize our condominium law. He was a regular feature at sessions and workshops and spearheaded a number of important initiatives that came from the review process, not least of which is condo manager regulation and, of course, the draft new statute that remains to be revealed and is expected within weeks.

DM Giles Gherson

On September 2, 2014, Giles becomes Deputy Minister of Economic Development and Employment and also of Research and Innovation. On October 6, he will also assume responsibility for Infrastructure. These are remarkably important portfolios that will without doubt benefit from Giles’ insight and leadership.

Thank you, Giles, for your service and contribution to reforming our condo law. Best wishes for your new role.

Rejecting meeting requisitions on minor technical grounds is a major foul

Posted in Case Studies, Governance
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The recent Ontario Superior Court case of Hogan v. MTCC 595 demonstrates that some condo boards have not yet read the memo about being responsive to unit owners and exercising common sense. Headshaker cases like this one are worth highlighting as examples of how not to run a condominium.

In November 2013, MTCC 595 notified its unit owners under section 97 of the Condo Act about the board’s plan to make an addition, alteration or improvement to the common elements at an estimated cost of $72,000. As required by subsection 97(3), the notice also advised owners of their right under section 46 to requisition an owners’ meeting to vote on the board’s proposal. Section 46 requires the board to call a meeting on requisition by the owners of at least 15% of the units.  Continue Reading

Microblog posts to June 20, 2014 – Court and Tribunal Roundup

Posted in Case Studies

The first half of 2014 brought a bumper crop of condo-related court and tribunal cases from across Canada.   The race for the top 10 cases of the year is heating up!

ONSC nixes unit owner’s case vs condo & bd over previously-litigated issues. Good discus’n re liability of directors. http://canlii.ca/t/g23p8 

HRTO: For giving condo a binding release, fired super’s sexual orientation complaint dismissed as abuse of process http://canlii.ca/t/g298x 

ONSC imposes terms on condo unit owner for violent, antisocial outbursts, but not sale of unit. http://canlii.ca/t/g2b2r 

ONSC awards condo costs of $37K in hotly contested compliance application where sale order requested but denied. http://canlii.ca/t/g2w8t 

ONSC: Claim vs landscaper made 3 yrs after slip&fall may proceed, but condo’s x-claim vs landscaper statute-barred. http://ow.ly/rNMvI 

ONSC: Condos who snooze, lose. Expired lien rights cannot be revived. http://ow.ly/rSH9j   Continue Reading

Policy prescription for pain-free collections

Posted in Financial Issues, Governance

IOUSome of the most uncomfortable conversations that condo directors, managers and lawyers have with unit owners take place when owners cannot afford the monthly common expenses for their unit. While it is natural to show compassion to someone in trouble, significant problems and potential liabilities arise by delaying prompt collection action.

Ontario condominium corporations have one the strongest statutory debt collection mechanisms in the world. They can collect every single penny of common expenses in priority to most other creditors so long as the required notices are properly completed, given on time and a certificate of lien is registered on title within 90 days of default. The rules are fairly simple but the slightest slip in the paperwork or missing a deadline by a single day jeopardizes the condo’s priority and ability to collect the entire debt quickly.

Continue Reading

Powers of attorney essential for condo unit owners

Posted in Financial Issues, Living Together, News and Events
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To encourage people to carefully consider and protect their families, assets and affairs, the Ontario Bar Association has made April its “Make a Power of Attorney Month.”

A power of attorney (“POA”) is a legal document that gives someone else the right to act on a person’s behalf. These documents can be used to oversee personal care or to handle assets and property, and can be customized to suit the precise requirements of each person.  Continue Reading

Top 10 condo law cases of 2013

Posted in Case Studies

Owing to a very busy and ice-storm-filled holiday season and an even busier start to 2014 , we have been late in releasing our annual top 10 condo law cases of the year gone by.   Mea culpa!

In response to popular demand, here are our picks, presented in no particular order.  Almost all of them have at least one lesson that can and should be picked up by the ongoing Condo Act Review being undertaken by the Ontario Government.   A new condo act that deals with some of the persistent problems we see in our daily practice and in some of the cases cited below would be welcomed.

10.       Owners of Strata Plan LMS 2768 v. Jordison, 2013 BCCA 484

This is British Columbia’s first court-ordered sale of an owner’s unit for bad behaviour.  While this concept is hardly new in Ontario, the reasons of the BC Court of Appeal are noteworthy for the eloquent and compelling argument shattering the old adage that “a man’s home is his castle” if he lives in a condominium.   Let the word go forth that condos are no longer castles.

9.         PCC 98 v. Pereira, 2013 ONSC 7340

Although our courts have repeatedly ruled that forced sale of units is a remedy of last resort, too many condos still make the attempt too early.  In this compliance application, the court was satisfied that the unit owner’s bad behaviours breached the “dangerous activities” provision in s. 117 of the Condo Act.  But after noting that the owner ultimately complied with many of the complaints and since the behaviour fell short of that in comparable cases, the court found that the extraordinary remedy of a forced sale was not yet warranted, and gave a simple order for compliance with the rules and a warning that more severe remedies might be given for future bad behaviour.  Condo recovered the bulk of its legal costs of over $37K.

8.         GSCC 50 v. GSCC 46, 2013 ONSC 122

In this shared facilities dispute over allocation of utilities costs, one of the two feuding condos skipped mediation and arbitration and started a lawsuit to recover its overpayment of the utilities costs, arguing that the non-paying condo was unjustly enriched.  The court stayed that lawsuit pending completion of mediation and arbitration which is mandatory as per s.132 of the Condo Act and cannot be bypassed even if both sides agreed, per s. 176.  Court also pointed out that an arbitrator has the necessary power under s. 31 of the Arbitration Act, 1991 to decide a case like this and to grant the remedies that the plaintiff condo was requesting in its lawsuit.   Moral:  Don’t skip mediation and arbitration to start your shared facilities litigation. Continue Reading

Join CCI’s Twitter chat on condo disputes this Tuesday

Posted in News and Events

The Toronto chapter of Canadian Condominium Institute is hosting the first of hopefully many “Twitter Chats” this coming Tuesday, March 11 at 7pm. The topic of this inaugural session is condo dispute resolution, a topic near and dear to many of us.

Whether new to Twitter or seasoned tweeters, condo managers, directors and unit owners should join the chat to hear from condo experts, ask questions and share their experiences and views.  This is also a great way to join up with your friends and colleagues who are tweeting.  

Details on how to participate are available on CCI-Toronto’s website, here and download the pdf flyer. The easiest way is to follow me, @chrisjaglowitz.  During the hour-long session, be sure to follow hashtag #condochat and use that tag in your tweets.

See you there.

[Postscript:  An archived copy of the session is available here.]