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.

Thoughts on Ontario’s Landlord & Tenant Law by Harry Fine

Most lawyers in the trenches have done some residential landlord/tenant work at some point in their career. While the annotated statutes cite the latest leading authorities on a particular point, those annual tomes provide little insight into what happens at the tribunal, what’s going on at Queen’s Park or the backrooms of the industry associations.  Enter Harry Fine, a paralegal and former member of the old Landlord and Tenant Board.  Harry shares his view on the imbalance in our landlord and tenant law and the legislative thought process going on in the background.  He also provides rare commentary on trends at the tribunal and in the marketplace generally.   Groundbreaking case law is also highlighted.  Any legal professional working in landlord tenant law would find this blog to be useful.  Further, if you’re thinking of becoming a landlord, do yourself a favour and peruse Harry’s blog before you take the plunge.

SQP jeunes avocats | virtual mentor for new lawyers by Lee Akazaki

Lee Akazaki is one of those tireless people who can’t rest on his laurels or take a minute away from doing good things.  Fresh off of his stint as President of the Ontario Bar Association, Lee has set up a blog to provide mentorship to an entire generation of young lawyers and which offers deep insight into trends affecting the legal profession, case comments, war stories and calls to action on hot topics.  In addition to providing high quality stuff, the delivery method is far more efficient than traditional mentorship in that it can reach thousands of people and stand as a valuable resource for years to come.   Even more, the benefit of Lee’s efforts extends far, far beyond the newbies and is of interest and practical use to even the more seasoned practitioners.  

Canadian Charity Law by Blumberg Segal LLP

With the holiday season upon us, charities and their supporters are operating in red alert mode.  They doubtlessly spend the rest of the year getting ready for these busy few weeks.  To be at the top of their game, charities (and their lawyers and any donors wanting to avoid charity scams or pitfalls) should follow Mark Blumberg’s blog for breaking news and resource materials in this niche area of law.  This unassuming little blog is nicely searchable and has been frequently updated since its launch in late 2007. 

These are but three of many top notch Canadian law blogs out there.  If you need a break from the egg nog during the holidays or have a problem that needs solving, visit “the” authoritative list of Canadian law blogs at www.lawblogs.ca.  You’re sure to find something of interest there.

Best of luck to all nominees!

In addition to being an effective marketing tool, a fun creative outlet and a great way of connecting with clients and prospective clients, blogging allows lawyers to provide a free but valuable information resource to people needing current, specialized information to make their lives easier. It also provides a proverbial soap box for demanding necessary changes. Providing these kinds of resources serves a purpose greater than simple law firm marketing. It helps lawyers fulfil their obligation to serve the public by promoting awareness of relevant legal news and issues, distributing useful, practical information, advocating sensible legislative change and enhancing access to justice.

At the Canadian Bar Association annual conference earlier this month in Halifax, Governor General David Johnston, a lawyer himself, reminded us that the legal profession has a “social contract” with society. In return for self-regulation and a monopoly over the practice of law, he said, “We are duty bound” to improve justice and serve the public good.

We completely agree.

After nearly three years of running this blog and hosting tens of thousands of unique visitors, it remains our great pleasure to publish content that we hope you think is informative, entertaining and educational. We will also continue to use this blog as a platform for positive change that benefits the condominium community. While we might periodically ruffle some feathers along the way, being clear and bold is often required to effectively make an important point and we will not shy away from calling things as we see them.

Of course, this work is made much more enjoyable and personally satisfying from the interaction with the people who read this blog. Sincere thanks to our readers, both regular and occasional, to people who share our work with friends or colleagues, and to all of you that submit comments, ideas and other feedback.

The decision to reduce or avoid using lawyers in pursuing claims for construction deficiencies is typically made in order to save money. This is often a poor choice and can lead to a host of unfortunate scenarios, including the following:

1. Unsuccessfully pursuing claims clearly not covered by the Tarion warranty;
2. Pursuing claims of a value greater than the new monetary cap;
3. Missing the limitation period for commencing appeals of Tarion decisions;
4. Missing the new deadlines to request conciliation, resulting in unintentional withdrawals of warranty claims;
5. Missing the limitation period within which to commence an action in court;
6. Allowing the developer to divest itself of assets and fade away without making good on its financial obligations;
7. Being “outgunned” by the developer’s legal team;
8. Settling for far too little money or pushing too far for too much;
9. Unknowingly releasing the developer from other viable claims without receiving adequate value;
10. Getting bogged down in procedural quagmires; and (as a bonus reason),
11. Almost any combination of any of the above.

Any of these situations will likely cost the corporation many times more than the possible cost savings of embarking on the construction deficiencies claims process without the help of a suitably qualified lawyer. This is a classic example of condo boards being “penny wise, pound foolish.”

Experienced property managers recommend that their condominium boards obtain legal advice about pursuing construction deficiencies claims at an early stage. In addition to having too little time to properly address the important issues that arise in a construction deficiency claim, property managers are neither trained nor insured to advise boards on the different legal ramifications of proceeding by way of Tarion rather than pursuing a claim in court. As a result, property managers are generally not in a position to give proper advice on these important issues and they typically recognize the limits of their ability when it comes to these complex legal areas. A lawyer with expertise in condominium and construction law can provide the necessary advice and help devise an effective plan to guide boards and their managers through the construction deficiency maze.

In addition, an inherent conflict arises when a property manager appointed by the developer (while in control of the condo corporation before turnover) is asked to advise the post-turnover board as to whether or how to pursue a claim against the developer for construction deficiencies. It is arguable that a manager appointed by a developer-controlled board may be tempted to give advice to the owner-controlled board that favours the developer’s position, to the detriment of the corporation and its owners. For this reason alone, it is essential that the board engage a lawyer to obtain an objective, impartial opinion to consider and act upon. Managers should (and generally do) encourage this approach, as it effectively cleanses any appearance of possible impropriety or undue preference and ensures that the board receives good advice. Good managers focus on “managing” life for a new condo corporation and can readily spot situations that require the involvement of another professional or specialist. Conversely, managers that do not recommend that the board seek the involvement of legal counsel or who provide legal advice might find themselves the subject of a lawsuit for negligence if the warranty claims process unfolds badly and results in a high value claim being lost.

This is not to say that the property manager does not play a pivotal role in the entire process. The manager is key in supporting the entire effort and coordinating between the board, the engineers and counsel and in helping to move the claim forward. Perhaps even more important is the fact that the manager will help the board budget for a legal battle with the developer and rejuggle the financial plan where necessary so that the war chest doesn’t run dry at a critical juncture.

Finding costs savings is important too, and managers play an important part here as well. It is not strictly necessary for lawyers to have complete control over the construction deficiency claims process (especially the Tarion process) or be involved at every small step. In some situations, it is appropriate for the manager to step in to fill the void. Counsel should, however, be consulted early to help devise a workable strategy for the entire process and, subsequently, as and when needed throughout the process to keep the case on the rails. A close and effective working relationship between counsel and the property manager is essential to achieving a good result in any type of legal scenario.

Whether through the Tarion procedure or a lawsuit in court, pursuing claims for construction deficiencies is a process in which the condo directors, managers and owners invest substantial time, effort and money. The outcome of the process will play a large role in the condominium’s finances and its esthetic appearance and practical function for years to come. Embarking on the journey without the help of the corporation’s lawyer can put that investment at risk, cause delay and extra cost, and reduce the likelihood of a successful outcome. This, in turn, reflects poorly on the building and impacts the financial status and standing of the community. It may also demoralize the board, the manager and the owners alike and increase the chance of a dispute or conflict between those players. An unfavourable outcome of a long and hard-fought claim over construction deficiencies often gives rise to additional issues that distract everyone from the other important business that needs to be addressed in the condo’s early years. With so much at stake, responsible condo boards and property managers get their corporation’s lawyer involved before starting any warranty claim process.

Do Away With Community Directory -- Does any condo still publish an owners’ directory? If so, Ohio condo lawyers Kaman & Cusimano suggest that you rethink the wisdom of that decision.

Smoking in Community Associations -- This topic has grown legs in recent months and will continue to gain momentum.   The folks at HindmanSanchez’s HOA Legi-Slate blog feature a meaty NY Times article on the growing movement to ban smoking in multi-unit residential buildings.

“Smoking and condominium associations” -- Another smoking piece, this one from Patrick Brady at the MEEB law firm in Boston, discusses the developing trends in American lawsuits over smoking in close quarters and gives some insight into the state of the law on this growing issue and where it’s going.

Getting the Scoop on that Poop -- CSI comes to Condoland. The blogosphere and Twitter were abuzz last month with the story of the Baltimore condo considering (then rejecting) DNA testing to help identify the source of dog poop on common elements. Lincoln Hobbs of Utah reveals that the idea is not so crappy after all!

HOAs Going Green with a bit of Kicking and Screaming -- In a guest post on the Construction Law Musings blog, Arizona community association lawyer Roger Wood discusses the difficulties of “going green” from the perspective of boards of existing condos and HOAs. Whereas life is easier for the new developments that are built with green technology, existing associations seem doomed to stumble through the conversion process.

How to Deal With a "Crazy" Board of Directors -- After tackling the issue of dealing with crazy owners earlier this year, Daniel Zimberoff at the Northwest Condo and HOA Law Blog turns the tables and shines the light on the boards. 

Goat Dispute Highlights Best Practices for Covenant Enforcement -- Seattle condo lawyer Kevin Britt reminds boards to think carefully when confronted with a potential rule violation. 

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 Condominiums – It’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.

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.

This question typically arises after I make a ruling or statement that one or more owners don’t agree with, or if I try to move the meeting past an overly belaboured point or to skip to the next agenda item or allow another person to ask a question or make a comment.

Because this question is so common, I’ve taken a shot at giving a short answer.

Lawyers chairing a condominium’s AGM have two duties:

First: Any chairperson must ensure that the meeting is conducted in a fair, orderly and efficient manner and in accordance with the Condominium Act and the declaration and by-laws of the corporation.

Second: Lawyers performing any service for any organizational client must, according to the Law Society’s rules of professional conduct, exercise their duties in a manner that serves and protects the interests of the organization (as opposed to the interests of the property manager, board of directors or one or more unit owners, or the unit owner who asked that question in the first place).

This concept of acting "in the interests of the organization" was discussed by the Supreme Court of Canada in the case of BCE Inc. v. 1976 Debentureholders, which we wrote about and quoted relevant portions here. The case dealt with the fiduciary duty of directors of a business corporation but it is to some extent applicable to the duty of a chairperson of a condo's AGM, particularly in treating the various stakeholders fairly.

A condominium corporation, like any other organization, has a large number of interests, many of which may conflict with each other, and a number of different stakeholders, each with their own different (and often conflicting) interests.  Treating all of those interests and stakeholders fairly may seem like a difficult juggling act and it sometimes is. 

When it comes to conducting the corporation's AGM, however, the most important balance to be struck is, in my humble opinion, between facilitating a meaningful and constructive dialogue to help the community bond on the one hand, and completing the required business promptly and sending the owners home to their families on the other.

If you're a condo unit owner, make it a point to attend your AGM this year.   Your condo needs you.