Another cause of owner ignorance: Lousy condo doc packages

Those of us who work with condo corporations often grumble that unit owners have no appreciable knowledge or understanding of the declaration, by-laws or rules that govern their condominium.  Indeed, if you ask any 100 (or 1,000 or 10,000) unit owners whether they have ever read those documents, the overwhelming majority will candidly tell you that they have not.  While there are many different reasons why owners fail to even attempt to learn how their condominium works and what is expected of them, at least one of those reasons is squarely the fault of the corporation itself.
 
I cannot possibly count the number of crappy condo document packages (whether or not accompanied by a status certificate) that have crossed my desk over the past decade that featured one or more of the following cardinal sins: 
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Federal flag law now in force

In the weeks prior to the Canada Day long weekend, we heard news of another condo flag flap. In this latest incident, an Edmonton condo board levied a $250 fine against the owners of a condo unit for hanging on their balcony a wind sock featuring the Canadian flag.

The news story refers to a private members bill introduced in Parliament last fall which, if passed in its initial form, would have prohibited any person to prevent displaying the Canadian flag and subject such persons to injunctions, fines and a jail term of up to 2 years. The implications for condo boards and managers were unclear but of serious concern.

Just in time for Canada Day 2012, that private member’s bill, Bill C-288 (“An Act respecting the National Flag of Canada”) received Royal Assent on June 28, 2012 and is now law.

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Get ready for the renovation boom

The Home Renovation Tax Credit (“HRTC”) generated considerable buzz after being introduced as part of the Federal Budget this year. The HRTC provides a tax credit of up to $1,350 for homeowners to perform renovations on houses, cottages and residential condominium units.

Click here to see Bob Gardiner’s summary of how the HRTC might apply to both condo corporations and unit owners.

With so many condominiums reaching 15-20 years of age, the HRTC will likely cause a small surge of renovation work in condominium units this year, which might help the economy in a small way and add value to condo units and complexes alike. But with this good news comes the possibility of a corresponding surge in disputes between condominium corporations and their unit owners.

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By-law needed for condos to appeal tax assessment of units

In December 2008, the Premier of Ontario said that municipal property assessments issued last fall for the 2009-2012 tax years are "unrealistic" since resale values have significantly declined in recent months.  

Will there be a flood of objections and appeals in respect of these assessments? Time will tell, but seeing as how each condominium unit is treated as separate property for municipal tax assessment purposes, a large volume of appeals may be likely.   A 100-unit standard condominium could, for instance, give rise to 100 separate objections or appeals. With more than 5,000 condo corporations in the Greater Toronto Area alone, the number of appeals by condo unit owners alone could be astonishing.

In reality, obtaining expert representation to navigate the process and collecting the necessary market value data to use as evidence is not cheap. For that reason alone, most property owners do not appeal from their assessments.  

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Look before leaping -- read the condo rules first!

In a recent entry on the Toronto Neighbourhoods and Real Estate blog Move Smartly, lawyer Rachel Loizos offers some wise advice for prospective condo purchasers:   "Before you commit to purchasing a condo unit, make sure you have reviewed the rules."

She then lists the rules that most commonly affect purchasers and goes on to say:

The cost for non-compliance can be high as the condo corporation has the right to obtain a court order to force you to comply. You may also get stuck with their legal costs in the matter.

It is worth emphasizing that those legal costs can and often do reach the tens of thousands of dollars.   In the recent case of Italiano v. TSCC 1507 (summarized here), the condo successfully pursued a unit owner for violating the noise and nuisance provisions in the condo declaration and rules.  In the end, the at-fault unit owner was ordered to pay over $80,000 in legal costs to the condo corporation.   This was on top of what the owner had to pay his own lawyer.    Ouch!

Purchasers who don't carefully examine the condominium declaration and rules before buying are taking an enormous risk.