When Amlani v. YCC 473 was released at the start of the year, it was the immediate frontrunner for “2020 Condo Case of the Year”. YCC 473 appealed and even in a year of fascinating cases, the Amlani decision still holds its seat at the top of that mountain.

The initial Amlani decision dealt with a common situation. In a nutshell, the board received complaints about Mr. Amlani’s smoking so they instructed their lawyers to deal with the matter. YCC 473 relied upon the indemnity provision in its declaration to charge back its legal expenses to Mr. Amlani and subsequently register a lien against Mr. Amlani’s unit to collect its legal fees.

The initial judge held that YCC 473 could not rely upon it’s the indemnity provision to charge back its legal costs for two key reasons:

1. Mr. Amlani did not commit “an act or omission to or with respect to the common elements and/or all other units” as required by the indemnity provision; and

2. YCC 473’s interpretation of its indemnity provision contravened section 134 (5) of the Condo Act as the costs it claimed related to compliance and enforcement costs without being embodied in a court order.

Section 134 (5) of the Condo Act allows a corporation to add its enforcement costs to an owner’s common expenses if a court awards the corporation its damages or costs in bringing a compliance application. Section 134(5) does not itself authorize a lien for legal fees incurred prior to the compliance application: to register a valid lien for legal fees, the court must first award these fees. However, many condominiums rely on their indemnity provisions as a “catch-all” provision to permit a corporation to add certain costs to an owner’s ledger resulting from their acts or omissions, often without requiring a court order.

The Amlani decision sparked considerable debate amongst condominium lawyers. Some of our esteemed peers argue that you cannot rely on an indemnity provision to charge back legal compliance and enforcement costs without first obtaining a court order. Others took the position that Amlani was a fact-specific decision that turned on the specific wording of YCC 473’s indemnity provision; they argued the Amlani decision does not stand for the proposition that a court order must be obtained before any pre-litigation legal compliance and enforcement costs can be charged back.

The Divisional Court recently set the record straight: condos cannot rely on their indemnity provisions to enable a lien to be registered against a unit to charge back compliance and enforcement costs without a court order. This does not mean a condo can’t recover its pre-litigation compliance and enforcement costs – condos can seek these costs in an s. 134 (5) order but registering a lien for these costs before the order is obtained is improper.

Continue Reading Amlani and indemnity provisions – All Bark, no bite? Not quite

I love hearing from all of you after our posts!

Even your messages of bewilderment and concern about yesterday’s disappearing blog post.

A draft of version of the post was inadvertently published while multitasking on a vacation day. In a panic, the post was deleted. At least the whole blog wasn’t deleted.

Thanks for all your notes and thanks for reading!  More from us soon!

Andrea

The City of Toronto has recently announced that the registration system for short-term rental operators or hosts will launch on September 10, 2020. Homeowners who rent their principal home or condo on a short-term basis (a period of less than 28 consecutive days) must register with the City by the end of year and renew annually.

In addition to registering and paying the annual fee of $50/year, operators must post the City-issued short-term registration number on all advertisements and listings, provide safety information to guests and collect and remit 4% Municipal Accommodation Tax on all short-term rentals. Violators may be convicted of an offence and fined up to $100,000 and up to $10,000/day for each day the offence continues. Short-term rental companies also must register and follow the City’s regulations.

Operators should note that registration with the City doesn’t authorize an operator to short-term rent in a condo that prohibits such rentals. Condominiums may impose stricter rules and prohibitions on short-term rentals. At all times, owners and residents of condo units must follow the condominium’s declaration, by-laws and rules.

What this registration system does provide is operator accountability in addition to the rule enforcement system under the Condo Act. For example, condos can soon check advertisements and listings for a City-issued short-term registration number as a first step in its enforcement. Further, Toronto residents can contact 311 to report issues related to short-term rentals, such as noise and concerns that people are renting homes that are not their principal residence.

Many condos struggle with regulating short-term rentals and the negative impacts on their communities. This mandatory registration system will hopefully aid those condos in enforcing rogue operators who often adopt different aliases to escape detection and continue to skirt the rules.

As of August 15, 2020, gyms and recreation spaces are allowed up to 50 patrons for each indoor sport or fitness room, with physical distancing of at least two meters.

Now that Ontario has eased gym restrictions, condominium corporations should review their amenities reopening protocol, which might include a requirement that users sign a waiver of liability before being allowed access.

But are waivers enforceable?

Continue Reading Re-opening amenities – Is signing a waiver enough? 

As we blogged on July 14, 2020 – The Ministry of Government and Consumer Services intends to proclaim a “Condominium Guide” into force effective December 1, 2020.  Submissions from the public on the proposed contents are due August 14, 2020. 

We made brief submissions on further potential headings for the Condo Guide table of contents.  These include status certificate and pre-construction condo purchase topics, first year deficiency and funding issues, conversion condominiums, and touch on the requirements for condo insurance, owner insurance and an explanation of standard unit vs. improvement coverage 

In our view, the suggested contents are comprehensive and hopefully the plain-language content will be too! 

In making our short notes, we had longer thoughts.  Here are some items we hope get fleshed out in the Condo Guide content: 

Continue Reading Considerations on the proposed “Condo Guide” 

When the City of Toronto first enacted its mandatory mask by-laws, condominiums were noticeably exempt. But after much feedback, the City of Toronto has amended its mandatory mask by-law to require masks in interior condo common elements such as hallways and elevators. By August 5, all Toronto condominium corporations must adopt a mandatory mask policy.

GMA is pleased to provide its comprehensive COVID-19 Protective Measures Policy which incorporates the mandatory mask provisions as well as other recommended provisions to mitigate the transmission of COVID-19. And even if your condo isn’t in Toronto, you can still implement this policy to promote best practices and prevent the spread of COVID-19 in your condo!

Contact Tony Bui, Andrea Lusk or An Nguyen for more details.

The Leafs are back on the ice, the Raptors are looking strong as they gear up to defend their championship and the Jays have taken flight. Things are looking good for Toronto and it doesn’t stop with our sports.

On July 29, 2020, the Ontario government announced that Toronto will be joining its neighbours by moving into Stage 3 of the Province’s reopening plans (unfortunately for our friends in Windsor, they must wait a little longer). Many are excited for the relaxed restrictions and some are rightfully hesitant to assume things are “back to normal”. But what exactly does Phase 3 mean for condominiums across the province?

Continue Reading Welcome to Stage 3, Toronto: What this means for your condominium

In Beswick v. YRCC 1175, the court held that a condo should not have made exterior interlock and pavement repairs to townhouse exclusive-use common elements without first providing reasonable notice of the expected cost of such proposed repairs to the townhouse unit owners.

In that case, townhouse unit owners were obligated to maintain and repair the steps and interlock on the exclusive use common elements in front of their units. The condo notified them it would be doing the replacement work at their cost.   The court disallowed the condo’s charge-back claim because it had not fulfilled its duty to provide reasonable notice to the owners before undertaking that maintenance work, since the corporation’s notice did not advise them that they would be responsible for the cost of the work.  As a result, the owners had not received the opportunity to obtain their own quotes or do the work themselves.

Before exerting any charge-back claim the condo should:

  • analyze the specific criteria to ascertain whether the charge-back is authorized by any of sections 57, 92, 98, 105 or 134 of the Condo Act;
  • check that the owner is required by the declaration to maintain and repair the defective portion of the unit or common element, since most charge-backs arise under s. 92 (work done for the unit owner) or s. 105 (an insurance deductible claim);
  • carefully document, photograph and assemble evidence at the outset to support the need for the work and owner’s failure to do it;
  • immediately do the work necessary to stop or lessen damage, loss or potential injury in an emergency where the owner is not responding. Issue a s. 92 notice to the owner requiring them to fix remaining, non-emergency damage;
  • give a specific but reasonable deadline with adequate time for the owner to obtain quotes and for its contractor to complete the work, taking into account that extra time may be required before the Board can provide its prior written consent, when applicable, as required by the declaration or pursuant to a s. 98 agreement. If so, allow time for the Board to approve the scope of work, plans, drawings, specifications and choice of contractor;
  • advise the owner of any declaration criteria applicable to a structural or other unit alteration, work affecting common elements, or as required by a s. 98 agreement. Also advise the owner of any applicable renovation rules;
  • make sure the owner knows that if the work is not done before the deadline, the condo will arrange for the work to be done at the owner’s cost;
  • include a notice of entry in the s. 92 notice for a day or two after the work deadline, to inspect whether the work has been completed;
  • get at least two quotes if the work is not done by the deadline. The contractor should preferably inspect the failed component and confirm in writing that the component needs to be repaired or replaced. The report should include dated photos and applicable materials and the scope, method and cost of repairs;
  • forward the chosen contractor’s quote to the owner, particularly advising the owner of the anticipated costs (as now required by the Beswick case);
  • forward the contractor’s invoice and completion report to the owner, indicating a due date for payment;
  • instruct the condo’s lawyer to register a lien to collect the charge-back if not paid. Standard notice and expiry of lien deadlines continue to apply using the date of default in payment;
  • recognize that the corporation cannot expect the lawyer to guarantee collection of its legal fees from the unit owner because some charge-back scenarios become contentious; however, typically legal fees are in fact recovered from the owner under sections 85, 92 and 105 of the Condo Act;
  • expect that the lawyer will often need to respond to a charge-back dispute by a careful analysis of the facts and all legal requirements. When a charge-back arises under an insurable event of damage, provisions in the declaration, standard unit by-law and the corporation’s insurance deductible by-law provision can give rise to varying results and consequential disputes.

 

 

GMA has almost 20 employees who, pre-COVID-19, were typically working in the office at 390 Bay Street, Toronto.   Many of our lawyers and staff were early adapters to remote work, with fully functioning home offices, a majority have been set up for years.   In that sense, we were prepared for the shift to remote work.  However, with reopening of more and more services,  I wanted to share my top links as GMA’s office manager.  These are sites I found myself clicking back to when considering how to best support our people returning to the office.

Continue Reading COVID-19: Learn, assess, modify. It’s a state of change in the office.