Collection Tips – Part 1

The collection of common expenses is an essential part of condominium administration. Here are a couple of considerations to keep in mind before getting to the lien process:

  1. Common expense arrears need to be reviewed regularly to ensure that the corporation is able to collect the arrears in a timely and cost effective manner.
     
  2. Remember that there is a three month deadline for putting a lien on a unit that is in arrears. Also, the lien process should be started fairly early in the third month, because of statutory notice requirements. Only arrears from within the previous three months can be secured by way of lien. [Note: The condominium corporation may still be able to collect arrears that are unsecured (because they fall outside the three month deadline) by way of other means. But, this is normally more time consuming and expensive.]
     
  3. Make sure that the corporation’s ledgers reflect that all payments are being applied to the earliest arrears. [Note: To be safe, corporations can state this in a by-law or notify all owners that this is how all payments are applied.]
     
  4. If you have any questions respecting chargebacks or other amounts that can be collected by lien contact your corporation’s lawyer in advance of the lien deadline.

Balancing Confidentiality and the Corporation’s Duty to Inform

James Davidson recently wrote an article for publication by Condo Business Magazine in which Mr. Davidson commented on a recent decision of the Ontario Human Rights Tribunal, Morley v. London Condominium Corporation No. 2.

The case dealt with confidentiality provisions in a settlement agreement between a condominium corporation and one of its owners. The owner had alleged that limitations on access to her unit constituted discrimination on the basis of a disability. In the minutes of settlement, the condominium corporation agreed to install a new entrance ramp to the owner’s unit.

Consistent with its disclosure obligations under the Condominium Act, the corporation subsequently advised all owners in a newsletter, that it had installed a new entrance ramp (at the corporation’s expense) as part of resolution of a human rights matter. The tribunal said that this was a breach of the confidentiality provisions in the settlement agreement and ordered the corporation to pay the owner $1,000.

The takeaway from the case for condominium corporations dealing with confidentiality provisions is that making it very clear in the agreement that the settlement will be disclosed to the condominium’s owners is a good option.

You can see the full article at http://www.nelligan.ca/e/balancingcondolawrequirements.cfm or at http://www.reminetwork.com/articles/balancing-condo-law-requirements/.

Smoke Migration

In a recent case, the Court dealt with the obligations of condominium corporations in relation to smoke migration. [See MacKay v. MTCC 985]

In the case, the owners of one of the units complained about migration of cigar smoke from a neighbouring unit. About two weeks later, they felt that they could no longer inhabit the unit, and they moved into a hotel pending anticipated resolution of the problem.

The condominium corporation initially obtained assurances from the smoker that he would stop smoking (at least for the time being); but it seems that the smoking did not entirely stop.

After some initial delay, the condominium corporation hired experts to investigate the problem and to recommend solutions. The complaining owners also hired their own experts, who made some different recommendations.

The corporation’s initial repair efforts (based upon advice from the corporation’s experts) did not fully resolve the problem. The corporation then hired new experts. Based upon the advice of those new experts, the problem was fully resolved – about nine or ten months after the complaint.

The Court said that, at the end of the day, the condominium corporation was in compliance with its repair and maintenance obligations. However, the Court said that the corporation ‘did not act with sufficient dispatch’ and ‘adopted an unfortunate attitude toward the owners, who were quickly branded as complainers who had far too quickly ran off to their own lawyers’.

Condo Act Revisions

Hot on the heels of the terrific Association of Condominium Managers of Ontario/Canadian Condominium Institute (ACMO/CCI) conference that was held on Friday, May 30, 2014, the provincial election is less than a week away. The hot topic for the condominium industry at both events is the proposed revision of the Condominium Act, 1998 (the ‘Condo Act’).

As most of our readers are aware, while our Condo Act is only just over a decade old, due to the booming success of condominiums in Ontario, there are numerous suggested revisions to the legislation to keep up with this changing industry and community.

One issue that is being considered as part of the revision process is the required quorum for holding a meeting of owners. At present, the minimum required quorum for holding a meeting of owners is 25% of the owners of all units present in person or by proxy. [Each corporation can, if desired, increase the quorum by passing a by-law.]

There is some suggestion that the minimum quorum requirement may be dropped below the 25%, perhaps even as low as 15% of the owners of all units.

This possible revision is strongly supported by some regions in Ontario, and strongly contested in others. Where some regions have great difficulty getting sufficient attendance at AGM’s, other regions do not face the same difficulty, and feel that reducing the minimum requirement will result in more disputes about the decision making process.

Whether or not the minimum quorum will be reduced as part of the revision process, I anticipate that the option will remain to increase quorum requirements by way of a by-law.