Best of the blogosphere for January 2010

In case you spent January at the gym or fulfilling other resolutions for the new decade, here is our mini-digest of noteworthy condo-related posts from the blogosphere last month.

Enjoy the Family Day long weekend!   

Records Retention: Going Paperless through E-Archives -- Paper is so passé! Marilyn Perez-Martinez of the Florida Condo & HOA Legal Blog describes some of the critical considerations in devising an electronic archive process for storing a condo’s records.  The key is in preparing a sound plan.

A Building Component does not become Common Area just because it was placed or built on the Common Area -- California HOA attorney David Swedelson blogs on a recent appellate case that sounds strikingly similar to our Court of Appeal’s ruling in Wentworth Condo Corp. 198 v. McMahon.   

Recognizing the Fraud Triangle -- Increase your vigilance. Florida condo lawyer Donna Berger highlights some telltale signs of fraud and how to spot them. 

CCAL Seminar -- The Case Law Update – Utah condo lawyer Lincoln Hobbs blogged about the presentation of the past years' top condo/HOA cases at the US College of Community Association Lawyers' annual law conference. Other seminars were reported, including CCAL Law Conference -- The Unauthorized Practice of Law.

The 2009 Home Renovation Tax Credit and CondominiumsIt’s tax season again, and property manager Tracey McLellan offers some suggestions for reporting and claiming the HRTC.  

Dealing With "the Crazies" Within a Homeowner Association -- Daniel Zimberoff at the Northwest Condo & HOA Law Blog offers some advice for what is probably a remarkably rare situation that is seldom faced by condo boards and mangers. 

The Sword, the Shield, and the Guide - Working with the Association's Attorney -- Kevin Britt of the Seattle Condominium and Homeowners Association Attorney Blog identifies and describes three distinct roles that a lawyer can fill when acting for a condo or community association.

Make indoor air quality test a standard part of real estate purchases -- Bob Aaron notes that people are becoming increasingly aware of the dangers of radon gas but that indoor air quality is not yet dealt with as part of real estate transactions. He also describes a number of ways to test for radon.

Court of Appeal smokes the "private club" defence

Anyone still trying to circumvent Ontario’s anti-smoking laws by operating as a “private club” should consider this recent advice from our Court of Appeal: Don’t bother.

In Kennedy v. Leeds, Grenville and Lanark District Health Unit, 2009 ONCA 685 (CanLII), the court upheld convictions against the operator of a Smith Falls sports bar who tried to operate the place as a private club. “Members” paid monthly dues of $4.00 and submitted application forms saying that they didn’t mind second-hand smoke. The “club” was reported as having more than 500 members.

The local health unit received a complaint in September 2006 and sent an inspector to investigate. He found no “no smoking signs” and found ashtrays on tables and saw patrons smoking in the place. The proprietor then tried to bar the inspector from making further entry and was himself observed walking out of the place while holding lighted tobacco. This led to the proprietor being charged with a number of offences under the Smoke-Free Ontario Act (“SFOA”).

The SFOA came into force in May 2006. It prohibits, among other things, people from smoking or holding lighted tobacco in “an enclosed public place.” It also requires the proprietor of “an enclosed public place” to post “no smoking” signs, remove ashtrays, warn and then eject violators, and so forth.

After a trial before a justice of the peace, the proprietor was convicted on all counts. The central issue at trial was whether the proprietor’s bar constituted “an enclosed public place.” The court found that members of a private club were still members of the public and thus the bar came within the definition of “enclosed public place.” The proprietor was consequently found in breach of the SFOA and was ordered to pay a fine of $3,500.

The proprietor appealed the conviction. In dismissing that appeal, a judge of the Ontario Court of Justice considered a ruling in another case where the Court of Appeal found a condominium’s swimming pool to be a “public swimming area” even though its use was restricted to the 8,000 members of the condominium community. The judge also concluded that it was reasonable for the justice of the peace to find that the members of the proprietor’s “club” were still members of the public. (This goes to show that smokers are people, too!)

Not to be deterred, the proprietor appealed further to the Ontario Court of Appeal. That court had no difficulty in finding that private clubs are not exempt from the SFOA. In considering the purpose of that Act, the Court of Appeal found that:

Read as a whole, the Act is clearly designed to eliminate smoking in public places and thus protect members of the public from contact with second-hand smoke. The word “public” is not defined in the Act. There is no attempt to limit or restrict its application in any way. As I see it, people who join the club are as much members of the public as are members of a swimming club or tennis club.

The court also found that if the legislature had intended to exempt private clubs from the application of the Act it would have done so.

With this, the appeal was dismissed and the conviction was upheld. This decision now effectively destroys the “private club” defence.

For condominiums, the “private club” defence never offered any real protection from the operation of the SFOA to begin with. Section 9 of that Act provides, in part, as follows:

9(2). No person shall smoke or hold lighted tobacco in the following places or areas:
. . .

3. Any common area in a condominium, apartment building or university or college residence, including, without being limited to, elevators, hallways, parking garages, party or entertainment rooms, laundry facilities, lobbies and exercise areas.

. . .

9(6). Every proprietor of an enclosed public place or a place or area mentioned in subsection (2) shall,

(a) ensure compliance with this section with respect to the enclosed public place, place or area;

(b) give notice to each person in the enclosed public place, place or area that smoking is prohibited in the enclosed public place, place or area in accordance with the regulations, if any;

(c) post any prescribed signs prohibiting smoking throughout the enclosed public place, place or area, including washrooms, in the prescribed manner;

(d) ensure that no ashtrays or similar equipment remain in the enclosed public place, place or area, other than a vehicle in which the manufacturer has installed an ashtray;

(e) ensure that a person who refuses to comply with subsection (1) or (2) does not remain in the enclosed public place, place or area; and

(f) ensure compliance with any other prescribed obligations.

Section 9(2) leaves no doubt that smoking is entirely prohibited in all common areas of a condominium in Ontario.

It is equally clear that condominium corporations must comply with the requirements of section 9(6) on the basis that they are the “proprietor” of the common elements, which are places or areas specified in section 9(2). After all, condo corporations have a duty under section 17(2) of the Condominium Act, 1998 to “control, manage and administer the common elements and the assets of the corporation.”

While it may be tempting, unit owners who observe unlawful smoking in or around their condominium would be wise not to rat out the offender to the local health unit. Complaints should be made instead to the condo manager or board, who should then take steps to warn the offender and to ensure compliance with the SFOA. Making complaints directly to the local health unit may have the unintended result of charges being laid against the condo corporation, which can result in hefty legal fees and possible fines that are paid from common expenses.

The cost of failing to comply can be steep: A corporation convicted of breaching section 9(6) of the SFOA for the first time is subject to a maximum fine of $100,000. For second and subsequent convictions, the maximum fine is $300,000. An individual caught smoking in a restricted place is subject to a maximum fine of $1,000 on the first conviction and $5,000 on subsequent convictions.

Some people speculate that smoking will be banned in high-rise condo units one day, seeing as how vibration, sound and smell travel so readily from unit to unit in such buildings. That day may not to be far off, given that the anti-smoking movement has grown considerably more powerful in recent years while smokers’ “rights” are being marginalized. Consider, for instance, the 2008 enactment of section 9.2 of the SFOA, which prohibits smoking in a vehicle when accompanied by a person under age 16. When it comes to smoking, the “king of your own castle” concept is already under assault.

A complete smoking ban in condo units will likely arise once the civil courts begin routinely awarding damages in favour of non-smoking unit owners who sue their chain-smoking neighbours. Such a lawsuit was recently filed in New York City and has survived the first round of challenges by the defendant. See here. With society’s growing intolerance for tobacco smoke, it is probably just a matter of time until trial judges consider smoking to be a nuisance in the same way as pollution, flooding, loud noise or noxious odour. Once that precedent is set, condo corporations will have greater success in enforcing the typical “no nuisance” rules against smokers and in passing specific "no smoking" rules that will be upheld by courts as a stop-gap measure until a legislated ban is enacted. 

Condo dwellers who still smoke might consider making a new year’s resolution to quit the habit.

Chinese drywall threat seems distant -- for now

Toronto lawyer and Tarion director Bob Aaron says that toxic Chinese drywall "may become the biggest environmental crisis to hit North American homeowners and builders in decades."

The defective drywall is decidedly carcinogenic and may be radioactive. This product emits noxious sulfuric gases that can damage HVAC components and corrode electrical wiring inside of walls. Not surprisingly, these gases pose a serious threat to human health and can render affected homes uninhabitable. Any home owner or condominium corporation faced with Chinese drywall in their home or building faces a daunting challenge and must consult quickly with engineering, health and legal experts.

Thankfully, relatively little of this defective product was imported into Canada and only a tiny portion may have found its way to Ontario. No significant cases have yet been reported in Ontario.

In contrast, the problem is quite widespread in the Southern U.S. and has spread north, generating a large-scale response by lawmakers, consumer protection watchdogs and construction litigation attorneys. Protective laws are being passed and multiple class action lawsuits are already underway.

Considerable information on the topic is available in the blogosphere, particularly by American construction law attorneys. An entire section is devoted to Chinese drywall at The Construction Litigation Blog of Stark & Stark in New Jersey and a Chinese Drywall Blog was recently launched by Wolfe Law Group of Louisiana and Washington states. Both are good resources.

We'll be watching for local developments. Post a comment below with any news or tips you may have.

Learn about indoor air quality and breathe easier

Toronto lawyer Dianne Saxe, one of Canada’s foremost environmental law practitioners, has posted a short but thoughtful blog entry on indoor air quality in homes.

After suggesting that indoor air quality (IAQ) in homes is significantly under-regulated, she goes on and:

  • Identifies the most common indoor air pollutants;
  • Outlines the problems arising from poor IAQ;
  • Describes existing Canadian guidelines that may apply;
  • Provides tips to improve IAQ; and
  • Offers links to resources.

This is worthwhile reading for anyone seeking a crash course in indoor air quality. Check it out.