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.