Ontario Condo Law Blog : Toronto Condominium Lawyer & Attorney : Gardiner Miller Arnold Law Firm : Ontario, Ottawa, Hamilton, Kitchener

While it is routine for money to flow from condominium corporations to their managers for payment of regular management fees, there are few valid reasons for other such transfers. It is, for instance, completely improper for a management firm to “borrow” its clients’ funds to finance its own operations or to “lend” funds to its other condo clients.

A recent Ontario Superior Court decision highlights precisely such a scenario and brings several important lessons for condominium directors.

In 2005, York Region Condominium Corporation No. 890 (better known as Pacific Mall in Markham) brought a lawsuit for damages against its property manager, RPS Resource Property Services Ltd. (“RPS”) and William Garland (“Garland”) who was RPS’s principal, for breach of fiduciary duty, breach of trust, conspiracy, fraud and breach of their obligations under the Condominium Act, 1998.

The condo also named Royal Bank of Canada (“RBC”) and sought damages for breach of contract, negligence and conversion.

The trial took place over several days in June 2010 and the ruling was released this month. The full decision is now reported here. We will reproduce some of the highlights here, but time-starved readers can skip to the bottom to see the important lessons.

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The federal government has just announced plans to tighten borrowing so as to help cap growing household debt and ensure the stability of the housing market. Changes announced today include requirements for larger down payments on purchases, shorter amortization periods on mortgages and a reduction of the maximum amount that can be borrowed against a home.

Notably absent from the today’s announcement is the more vigorous qualification requirement for condominium purchasers that was reported by the National Post on Thursday and again on Friday as an item under serious consideration. This measure relates to the debt ratio calculation used to qualify purchasers for CMHC-insured mortgages on condo units and called for the inclusion of 100% of the applicable condo common expense fees as part of the benchmark Total Debt Service formula, up from the current level of 50%. This change would make it more difficult for people to qualify for a loan to purchase a condominium unit. For an explanation of the mechanics of Total Debt Service formula and the impact of changing it, see this piece at the Canadian Mortgage Trends blog.

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2010 finished with a very strong showing by condo law bloggers on both sides of the 49^th parallel. Here are some of the best posts from the last two months of the year. 

Judging from the quality entries over this period, you can bet that 2011 will give us a bumper crop of good stuff.

2010′s Top Condo & HOA News Stories -- The Community Association Considerations blog looks back at the past year and highlights the top 10 issues facing condos and HOAs in the United States. 

How To Avoid Getting Taken Advantage Of When Comparing Landscaping Contracts -- While most condos in Ontario are focussed on clearing snow at this time of year, now might be a good time to start thinking about how to make the grounds look fantastic without blowing the budget. Condo and HOA Living blogger Ryan Poliakoff shares some pointers to consider when signing the landscaping contract.

2011 New Year Resolutions for Boards -- At this customary time of reflection and introspection, here are some New Year resolutions that community association and condo boards may want to consider, courtesy of the Colorado Homeowners Association Law Blog.

2011 New Year's Resolutions for Community Associations -- This January post on the Northwest Condo and HOA Law Blog is worth including at this point. Check out Daniel Zimberoff’s suggestions for eight (8) resolutions.

Association Governance Elsewhere -- Now back from vacation, condo lawyer and blogger Donna DiMaggio Berger shares her observations on the not-so-subtle differences in condo law between Costa Rica and her native Florida. If you don’t mind the snow, Donna, you can visit us for a fact-finding mission up here in the great white north anytime!

When will a condominium board's decisions be reviewed by the courts? -- Condo directors are often told to be sensible in their decision-making, but what does that really mean? Bradley Chaplick lists the critical elements that will allow a decision-making body like a condo board to benefit from the “business judgment rule” established by Canadian courts.

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The winners of the 2010 Canadian Law Blog Awards (the “CLawBies”) were announced on December 31, 2010.

We were thrilled that our blog won the CLawBie for Best Practice Group Blog of the year.  Here's the blurb:

Best Practice Group Blog – This is a new award for 2011, meant to recognize the growing number of law firm practice group blogs in Canada. Our inaugural winner in this category is the Ontario Condo Law Blog, written by the lawyers at Gardiner Miller Arnold LLP. Led by editor Chris Jaglowitz, this blog regularly delivers a variety of original topics and interesting links. Not only does it make for engaging reading, but the firm always makes clear just how well it knows its niche topic (condominium law) and its audience (condo corporations in the Greater Toronto Area).

We are quite honoured to be named, considering the high calibre of the other award winners and the many other outstanding Canadian law blogs, both new and old. Be sure to check out all of this year’s CLawBie winners and also the listings at lawblogs.ca to find Canadian law blogs sorted by topic, province or category. There’s sure to be one of interest to you there.

Hat’s off to Steve Matthews and the rest of the judging panel for providing this great showcase of  law blogging in this country and for coming up with some interesting new award categories to highlight the expanding and maturing talent of Canadian lawyers in the blogosphere. We also salute all the other award winners as well as the finalists and nominees.

To you our readers, thanks for joining us and sharing your feedback this past year. As long as you keep reading and writing in, we’ll keep writing! Cheers. 

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