In the recent Ontario Superior Court of Justice decision of Elbaum v. York Condominium Corporation No. 67, the Court dealt with a motion by the condominium corporation for an order dismissing an action started against it by the Plaintiff, Sali Elbaum.
Ms. Elbaum’s claim against the corporation was for damages associated with injuries she sustained as a result of an alleged dog attack, which occurred on the condominium corporation’s common elements. Ms. Elbaum sued the corporation based on its alleged liability under Ontario’s Occupiers’ Liability Act. The corporation brought its motion for dismissal on the basis that the Dog Owners’ Liability Act was the applicable legislation, and the corporation could not possibly have any liability in the matter under that Act, as the corporation was not the owner of the dog.
Ultimately, the Court refused to grant the relief sought by the condominium corporation. Although the Court did not generally feel that the corporation was liable under the Dog Owner’s Liability Act, the Court felt that the condominium corporation was otherwise potentially liable on the basis of negligence.
Accordingly, the claim was not dismissed, and the corporation will be required to proceed with its defence to trial, unless the matter is otherwise resolved in the meantime.
A final trial decision on this issue would be helpful for the purpose of establishing the particular liability of a condominium corporation with respect to incidents that occur on common elements that result in damages to a unit owner. However, in the meantime, the decision from this motion certainly suggests that a condominium corporation could be liable in such cases, even where the corporation was not the direct cause of the damage alleged to have been sustained.
Mixed-use condominiums, which include both a commercial and a residential component, provide commercial owners with potential on-site clientele and condominium owners with the convenience of having a restaurant, grocery store, or a variety of other businesses available in their own building.
Depending on the nature of the development, mixed-use condominiums can work well and have benefits for all owners. In addition to having their benefits, though, mixed-use condominiums are also prone to certain issues, including:
- Allocation of common expenses – The developer determines the allocation of proportionate shares for common expenses when preparing a condominium declaration. In many cases, the allocation does not reflect the actual contemplated usage of the common elements, or expenses for services. This can lead to some resentment, or ill will, between residential and commercial owners.
- Representation on the board of directors – In a situation where a condominium has significantly more residential owners than commercial owners, it is not difficult to see how there can be inequities with respect to representation on the board. In some cases, mixed-use condominiums will have a bylaw, which requires that a certain number of positions on the board be reserved for commercial owners. However, the bylaw must be carefully crafted to ensure that the best interests of the corporation are granted first priority.
- Safety and security – One of the central concerns in a mixed-use setting is to ensure that the development is built in such a way as to provide for the security of all residents of the complex. In other words, the development must take into account how each of the users, owners, occupants, or tenants, or their agents or guests, will access their portion of the development, without creating security risks for others.
- Complaints – Given the nature of communal living, every condominium corporation must deal with complaints from owners from time to time. However, the type of complaints that arise in a mixed-use setting can be a little trickier to manage, given that the expectations of the occupants are not necessarily common. Condominium corporations should consider implementing a policy for addressing complaints in a consistent manner.
- Human rights considerations – The upcoming implementation of the new standards pursuant to the Accessibility for Ontarians with Disabilities Act (AODA) may result in some interesting issues for mixed-use condominiums, due to differing obligations for certain commercial owners versus residential owners.
At the end of the day, a mixed-use development is what each member of the condominium community makes of it. Owners need to be aware of the potential for these types of issues and develop a proactive strategy for resolving them if they arise. Both residential owners and commercial owners need to work together to ensure the success of this type of condominium.
For more information, read the full article, Co-existing in mixed-use condominiums, by Nancy Houle and Cheryll Houle, as published in Condo Business on the Real Estate Management Industry (REMI) News Network.
The Condominium Act, 1998 (the “Act”) says that a proposed rule can be passed either by vote of the owners, or by resolution of the Board followed by a notice to the owners (unless a requisition for a meeting is made by owners within 30 days following the Board’s notice).
From time to time the same or successor condominium boards may propose a rule or an amendment to a rule which had been previously rejected or amended by the owners. Section 58(8) of the Act deals with that situation.
According to Section 58(8), if essentially the same rule has already been rejected or amended by the owners (within the previous two years), then the proposed ‘revisited’ rule or amendment must be approved at a meeting of owners. In other words, the ‘Board notice’ procedure described above is not available for these sorts of rules or amendments.
This situation arises from time to time, and is often misunderstood or overlooked by a condominium board that may be intent on passing a particular rule.
According to Section 37.(1)(a) of the Condominium Act, 1998, condominium Directors and Officers have a duty to act honestly and in good faith.
Condominium Directors and Officers also have a duty to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; but the duty to act honestly and in good faith is perhaps more ‘serious’, for the following reasons: If a Director or Officer fails to act honestly or in good faith,
(1) the corporation’s D & O insurance may not apply (see Section 39 of the Act); and
(2) the corporation’s duty to indemnify the Director or Officer may not apply (see Section 38 of the Act).
These are obviously important risks.
So, how do you act ‘honestly and in good faith’? This is a complex question, and it’s not possible to provide a short answer. However, you should likely be fine if you are guided by the following principles:
- Always do your best to base your decisions on fair, sound reasoning, consistent with the objects and duties of the corporation (as expressed in applicable legislation and in the corporation’s Declaration, By-laws and Rules);
- Do not promote your personal interests instead of, or contrary to, the interests of the corporation; and
- Where appropriate, declare a conflict of interest and recuse yourself from deliberations and decisions (on such matters).