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

#8 -- McFlow Capital v. Simcoe Condominium Corporation No. 27, 2011 ONSC 7389

The number of condominiums under court administration has grown over the past year, as has the number of reported decisions dealing with appointment of administrators and related issues.   In this case, a motion for directions in an ongoing case that was named #8 in our top 10 list last year, the court gives useful guidance as to the materials that must be prepared and filed when condo administrators seek approval of the reports of their activities and the accounts for their fees and their lawyers’ fees.   This is a good read for anyone trying to understand how a court-appointed administrator should report their activities and fees and the principles behind a court’s approval of those reports and accounts.

#7 – Three-way tie:  Walji v. York Condominium Corporation No. 455, 2011 HRTO 1365, Parkinson v. Carleton Condominium Corporation #43, 2011 HRTO 1209 and Dai v. Metropolitan Toronto Condominium Corporation No. 971, 2011 HRTO 876

Here’s proof that the Ontario Human Rights Tribunal has become an increasingly popular venue for frustrated condo unit owners to bring grievances against condo boards and property managers.   These are just three cases among a whole bunch of complaints that were summarily dismissed as not disclosing an actionable human rights violation or as having no prospect of success.  The first case relates to statements by a board member that the owner’s unit smelled of urine. The second case alleged harassment when the condo required unit owners to remove protective weather stripping from their unit doors.  The third case was brought by a married woman offended by the condo president addressing her as “Miss.”  While these three cases were dismissed, the unit owners who brought them felt sufficiently aggrieved by shoddy treatment by the board or management.  Condos can and should avoid these kinds of proceedings by treating their owners respectfully and managing disputes more proactively.

#6 -- Jakobek v. Toronto Standard Condominium Corporation No. 1626, 2011 HRTO 1901

Just because complaints to the Human Rights Tribunal are often unmeritorious doesn’t mean they can be ignored.  In this case, the condo corporation and its management firm failed to provide a meaningful response and did not participate at the hearing of a unit owner’s complaint related to the condo’s refusal to accommodate a disabled person.   After hearing the unit owner’s evidence (no one from the condo attended), the Tribunal smacked the condominium and its management firm with a $5,000 fine, ordered the condo to amend its bylaws to permit parking mobility-assisting scooters in the garage and ordered the condo and its manager to read up on the duty to accommodate.   Condo corporations that don’t actively respond to and manage HRTO proceedings are playing with fire.

#5 --  Pantoliano v. Metropolitan Condominium Corporation No. 570, 2011 HRTO 738

This was a human rights complaint by a unit owner over condo pool rules that set separate swim hours for kids, prohibited children under age 2 from using the pool and completely banned diapered individuals (baby or adult).  The Tribunal confirmed that age restrictions in recreational facilities at condominium complexes are discriminatory on the basis of family status and consequently struck down the offending rules and awarded the complaining unit owner $10,000 as damages injury to her dignity, feelings and self-respect in response to a hostile environment created by the board during the proceedings.  This case reminds us that the concept of adult-only buildings is utterly dead in Ontario.

#4 -- Waterloo North Condominium Corporation No. 168 v. Webb, 2011 ONSC 2365

In what is probably only the fifth case of its kind, the Ontario Superior Court granted the extraordinary remedy of forcing a unit owner to sell and vacate a condo unit.  In this case, featuring a very brief decision, the court cited years of aggression, violence, threats, vandalism by the unit owner as justification for the remedy.   What’s noteworthy is that this case, like the Korolekh decision of 2010, appears to have been decided on its first appearance, but for an even more modest cost.  This case is a good example of how an efficient, economical and effective compliance application can deal with anti-social behaviour by problem unit owners.    More like these will follow.

#3 -- Pate v. Sinclair, 2011 ONSC 3997

Condo resale agreements often include a condition allowing the purchasers to back out of the deal if their lawyer is not happy with the status certificate issued by the condo corporation.  At issue in this simple discovery motion in a lawsuit over an aborted condo purchase was whether purchasers must answer questions about their lawyer finding the status certificate to be unsatisfactory.  In a nutshell, while a lawyer’s opinion and advice to purchasers would normally be protected by lawyer-client privilege, the privilege related to the opinion itself was waived by the purchasers when they pleaded in their defence that they relied on the lawyer’s opinion in terminating the transaction.  Any advice given by the lawyer as to whether the agreement could legally be terminated would be protected by privilege, but issues surrounding the purchasers’ instructions to their lawyer to terminate the transaction and the issue of “whether” the lawyer gave any advice are not protected and questions about those aspects must be answered.  While it’s not very sexy, this case is a gem for real estate litigators who will get busier when the local real estate market corrects and purchasers seek to nix their deals.  The case also reminds purchasers relying on this clause that they cannot use it in a capricious manner or in bad faith. 

#2 – Schneeberg v. Talon International Development Inc., 2011 ONCA 687

In a case related to the new Trump Tower in Toronto, the Ontario Court of Appeal agreed that a purchaser was entitled to terminate his new condo purchase agreement because the developer failed to provide occupancy and close the transaction on the specific closing date set out in the agreement.   After a good overview of the law of contract interpretation, the court said that “[t]he proper functioning of the complex and rapidly growing condominium industry depends on agreements that set out all rights and obligations of the parties in a clear fashion.”   Purchasers at other projects shouldn’t get too excited, however, because the wording of the contract in this case had a gaping hole through which the lucky purchaser beat a hasty retreat when the project got delayed and the economy turned south.    “The Donald” likely isn’t very happy with the lawyers who drafted the agreement for this project.

#1 -- Orr v. Metropolitan Toronto Condominium Corporation No. 1056, 2011 CanLII 66010 (ONSC)

Weighing in at 422 paragraphs on 75 pages, it’s only fitting that this behemoth decision, the product of 12 years of litigation ending in 40 gruelling days of trial, makes the top of our list.    At issue in the case was an unauthorized third floor built into the common elements by a previous owner who sold the unit to a purchaser who believed that the third floor was part of her unit.  See Bob Aaron’s column for a short summary of the facts.  To briefly summarize the result, the court dismissed the purchaser’s claim for an order legitimizing the third floor, granted the condo’s request for an order requiring the purchaser to close up the third floor, and awarded damages against the purchaser’s lawyers for negligence in failing to check the floor plans and tell the purchaser that the third floor was not part of the unit.   This single case is worth an entire series of smaller posts on a large number of issues, chief among them being the higher standard by which lawyers will be held in handling condo purchase transactions.  The effects of the case are only beginning to manifest themselves in the real estate bar and will likely give rise to an increase in costs for consumers.  Rumour has it that this case has been appealed, making it possible that our Court of Appeal might comment on some of the more salient legal issues, so there will likely be more that we can write about in the future.

And that concludes our list for this year!  Which of these cases are your favourites?   Would you have chosen any different cases?   Do you have any observations about the trends in the cases we’ve chosen?  Submit a comment below to give us your two cents. 

For you impatient types who would rather not wait until next December to see the top cases of the coming year, follow @ChrisJaglowitz on Twitter and watch our microblog posts to receive frequent updates during the year.  

Thanks for following our blog this year and for all your comments, kudos and support.   Visit us again in January when we dust off our crystal ball and make some predictions about which issues will define condo law in 2012.

The transitional details are simple enough. Section 32 of the new Public Inquiries Act, 2009 provides that inquiries commenced under the prior Act will continue to be governed by that prior Act. Inquiries commenced (or condominium inspectors appointed) on or after June 1, 2011 will be subject to the Public Inquiries Act, 2009.

The appointment of a condominium inspector is rare, but we know that one is currently working at MTCC 710 in Toronto. This was a problem condo we reported about in April 2010, when an application to appoint an administrator was pending and later granted by the Superior Court under section 131 of the Condo Act. That administrator subsequently applied for and was given an appointment as an inspector under section 130 of the Condo Act in an unreported decision dated January 5, 2011. One would presume that the administrator required the powers of an inspector to investigate possible irregularities in the finances or records of that condominium or gather information needed to properly administer that condo's affairs.

Because of the extraordinary high cost of appointing someone as an administrator or inspector and then the cost of that person fulfilling their mandate, appointments under sections 130 and 131 are best reserved for the most dire situations as a final option or where the amounts at issue are extremely large. Even where the need is great or the cost is justified, the sad fact is that these appointments are no more than a reactive measure to try and fix a situation that has gone horribly wrong and which has probably arisen because adequate preventative measures and vigilant oversight by owners and auditors did not exist or have failed.

If an inspector has been or is sought to be appointed at your condominium, your condo is quite probably in serious trouble and you should closely monitor the situation, band together with a group of concerned neighbours and get legal advice.

If you are a prospective purchaser and notice in the condominium status certificate that an inspector has been appointed over the corporation under section 130 or that such an application is pending in court, you may wish to seriously consider your purchase before the deal becomes firm. Run, don’t walk, to your lawyer’s office.

#7 -- Jia v. Toronto Standard Condominium Corporation No 1479, 2010 ONSC 3433

A Toronto condo was found liable and ordered to pay $50K for assault and battery when its superintendent physically ejected a “trespasser.”  There is nothing new about the concept of employers being vicariously liable for the acts and omissions of their employees, but the brutal assault in this case is noteworthy. See our case comment and our quotes in the Law Times.

#6 -- East of Bay (2003) Development Corp. v. MPAC, 2010 ONSC 3337

Assessing property for tax purposes is a lot like making sausages – you probably don’t want to see how it’s done.   In this case brought by the condo developer to set aside MPACs assessment for the first two years of the condo’s existence and for a refund of all taxes paid, the court slapped MPAC for its "questionable" two-stage property tax assessment process for new condo units. The fact that MPAC was understaffed and unable to cope with a deluge of new condos on the market was no justification for using a two-stage assessment not expressly permitted by the Assessment Act, s.33(1).

#5 -- Metropolitan Toronto Condominium Corporation No. 675 v. Unit Owners, (unreported)

A condo corporation successfully obtained a court order to amend its declaration to unitize and sell an unused superintendent’s suite despite opposition by at least one unit owner. While it’s good to see a court stepping up to fill the void where needed, it’s troubling that a court might override the requirement in the Condo Act for a large majority of unit owners to democratically approve amendments to the declaration, which could include drastic plans to unitize and sell off common elements, a difficult and controversial decision. It is not clear what percentage of owners supported the amendment in this case as there are few facts set out in the court’s endorsement or the case comment by the condo’s counsel. This type of scenario is arguably addressed more appropriately by a change to the Condo Act rather than judicial intervention.

#4 -- Nipissing Condominium Corporation No. 4 v. Kilfoyl, 2010 ONCA 217

The Ontario Court of Appeal affirmed that single family occupancy restrictions in a condominium declaration do not violate the Ontario Human Rights Code.  While the court’s reasons were sparse, this troubling issue is now definitively answered. We can tell that the Ontario Human Rights Tribunal is listening because they relied on the court’s decision in throwing out a human rights complaint made by that same unit owner on the same issue (see 2010 HRTO 1036).

#3 – TIE: Metropolitan Toronto Condominium Corporation No. 985 v. Vanduzer, 2010 ONSC 900 and Kilfoyl v. Nipissing Condominium Corporation No. 4 (re costs), 2010 ONSC 6023

In cases where unit owners are responsible to fully indemnify their condo corporation for the legal costs of enforcing the declaration, by-laws and rules under Condo Act, s. 134(5), the court can order that the lawyers’ accounts be assessed.  By so doing, the court can ensure that cases are not “overlawyered.” See our case comment on Vanduzer and, for a case applying this principle, see Peel Condominium Corp. No. 452 v. Jaworowski, 2010 ONSC 4567, where the court reduced the recoverable legal costs by a whopping 66% after finding that the corporation’s lawyers had “over-resourced” a condo lien enforcement case.

#2 -- Weinberg v. Metropolitan Toronto Condominium Corporation No. 1019, 2010 HRTO 1527

The Ontario Human Rights Tribunal dismissed a unit owner's complaint about the condo’s enforcement of a “no pets clause” where an arbitrator appointed under the Condo Act had already considered the complainant’s disability and ordered the dog's removal. The case reminds us that every litigant has only one “kick at the can.” An arbitrator’s ruling on an issue cannot be revisited by another tribunal.   Similarly, in Atkinson v. Essex Condominium Corp. No. 5, 2010 HRTO 123, the Human Rights Tribunal ordered a unit owner’s complaint over a “no pets” clause to be deferred pending the outcome of the condominium corporation’s concurrent enforcement application to the Superior Court. Multiplicity of proceedings should be avoided.

#1 -- Metropolitan Toronto Condominium Corporation No. 747 v. Korolekh, 2010 ONSC 4448

This was unquestionably the top newsmaker of the year. After hearing evidence of a condo unit owner's bizarre behaviour including verbal assaults, besetting and menacing others with a dog, the Court found the unit owner to be "incorrigible, unmanageable" and ordered her to sell her unit.   See our case comment, our article in Condo Business and our quotes in the Toronto Star and the Law Times.  This appears to be only the fifth Ontario case where a sale order was given. The rarity of such orders was underlined in another 2010 case called Condominium Corporation No. 8110264 v. Farkas, where the Alberta Court of Appeal ruled that evicting condo unit owners is an extraordinary remedy, to be granted only when other incremental remedies fail. 

BONUS:   Lahrkamp v. Metropolitan Toronto Condominium Corporation No. 932, (unreported)

As another instalment of a long-running dispute between a unit owner and his condo corporation, an October 2010 decision of the Ontario Small Claims Court explores the issue of owners’ right to inspect records under Condo Act, s.55. The court rejected the argument that every request for records must be accompanied by a reason for the requested records, but held that the right of a corporation to refuse records may be appropriate where the actual motivation behind the request is being challenged, or the burden and expense to the corporation is a serious issue. Each request must be considered on its own merits. A number of requests for different sorts of records are then raised and decided. 

Thanks for reading our blog this year. Have a happy and healthy 2011.

What does it mean to owe someone a fiduciary duty? - Florida HOA attorney Donna Berger discusses this commonly-used term and the obligations of condo directors. In a separate post called What should be expected of owners in community associations? she then lists some basic obligations of unit owners that should be common sense but are forgotten or ignored too often.    Fairness is a two-way street.

ROC Boards Should Use Common Sense and Compassion When Enforcing Rules - Scott Gordon of the Florida Resident Owned Community blog cites a recent example of a board acting sensibly in a rule enforcement situation.

The Mezuzah Conundrum - Religious Fixtures on Common Element Doorposts - Bradley Chaplick of Fine & Deo illustrates a delicate scenario that requires a delicate touch when it comes to declaration and rule enforcement. 

Toronto-area readers may wish to get their snow shovels ready.   The winter weather is finally about to begin.  

Use Prepaid Credit Cards for Online Purchases -- Canadian Capitalist suggests using prepaid credit cards to minimize risk when shopping online. My thought:  Condos that provide their superintendents with a corporate credit card for emergencies or purchasing supplies could use prepaid cards instead to help lessen the chance of a huge unauthorized bill and to protect against theft. These cards might also be a good gift idea.   Compare the costs and features of the most popular pre-paid cards at Million Dollar Journey's entry on Prepaid Mastercard and Visa Credit Card Comparison.

HOA Boards Often Approach Me with a Plan and a Question – The lawyers at northwestern US law firm Vial Fotheringham lament the fact that too many HOA boards enact a plan first, and then ask their lawyer “can we do this?”  Good discussion on the scope of a board's authority.

Before Buying Into a HOA or Condo Association... – What due diligence would “The Donald” conduct before buying a condo? Find out by reading this entry on the Trump University Blog.

Mold and Water Damages Often Expensive to Repair – Lisa Magill at the Florida Condo & HOA Law Blog offers practical suggestions to avoid commonly encountered mould problems when owners leave their units for prolonged periods (or for good).

Directors and Officers Coverage is Not the Same as Fidelity Coverage – Lincoln Hobbs of the Utah Condo Law Blog speaks the truth.

Because they often do not take a walking tour of the parking units prior to signing the purchase agreement or closing the deal, most purchasers would simply assume from looking at their deed (for Unit 53, Level A) that they are the proud new owners of the parking unit marked as 53, only to find out later that they actually purchased the one marked as 99, which might have a much less convenient location in the garage.

It often happens that long-time residents discover that they have been using the wrong parking spot or locker for many years. We see situations in 20 to 30 year-old condo buildings where no one can accurately identify which parking and locker units belong to which owners (or to the corporation itself) because the painted numbers on those units do not match the legal description. The confusion is compounded where unit owners have sold the wrong parking or locker unit over the years or where the vendors sell the dwelling unit but forget to transfer the parking and locker units, in which case those units remain in the name of the vendor, or the previous vendor, or the vendor before that!

Such problems become even more serious where the condo declaration contains a schedule listing which parking and locker units are tied to each dwelling unit. Because condo corporations have a duty to uphold their declarations, it is difficult for the board to turn a blind eye to such irregularities, especially when purchasers can complain that they took title to their units in reliance upon the information contained in the schedule to the declaration.

Most problems of this sort surface during the sale of a unit when an observant lawyer for a purchaser checks the drawings, as Bob Aaron recommends, and finds the inconsistency. Invariably this takes place in the few days before closing, then the management office gets a frantic call by a selling unit owner who threatens to sue the corporation for interfering with the sale, etc, etc. The manager must then defer that day’s regular priorities and enlist the corporation’s lawyer to help sort out the problem on a rush basis.

So how is this kind of problem avoided?

Ideally, the situation does not arise at all because most reputable developers ensure that the numbering of parking and locker units in new buildings relates to the corresponding legal description. Unfortunately, not all developers are so conscientious, in which case it falls to the turnover board of the new condo corporation to rectify the problem.

Even more unfortunate is the fact that turnover boards are often deluged with more pressing first-year issues to tackle (like recovering budgetary shortfalls, conducting the performance audit, engaging professionals, etc.) and so the numbering of the parking and locker units is easily forgotten. The inevitable result is that the board will one day be required to deal with the situation, usually when it is least convenient.

In cases where a turnover board notices that the parking and locker unit numbering is significantly different than the legal description, one suggestion is to add this issue to the list of construction deficiencies to be taken up with the developer in the ordinary course during the first year after turnover. Hopefully the developer will solve the problem as part of a settlement of the case or may offer some amount as compensation for the necessary work to be done. Even if this problem is not ultimately rectified or paid for by the developer, the numbering issue will at least be on the board’s radar and can be corrected at an early stage.

If the numbering is not corrected, the board should, at the very least, ensure that the status certificates show the “commonly known as” numbering in addition to the legal description of parking and locker units, e.g. “Unit 53, Level A (Parking space 99)” or “Parking space 99, being Unit 53, Level A”.  

If your garage has multiple levels, then preface the parking space number with P1, P2 or as may be, so that it reads as: “Parking space P2-99.”

Dealing with this type of issue effectively in the first year or two of the condo’s life will save time, money and frustration down the road.  That said, it is never too late to try and clarify what might otherwise be a confusing item on your corporation's status certificates.