ACMO and CCI Ottawa Conference – May 31, 2013

James Davidson, Nancy Houle and Christy Allen of Nelligan O’Brien Payne LLP will be speaking at the Association of Condominium Managers of Ontario (ACMO) and Canadian Condominium Institute (CCI) Ottawa Conference on May 31, 2013. The conference is focused on timely and relevant issues that are of interest to condo property managers, boards and owners. Topics will include:

  • Electric Cars;
  • Directors Liability;
  • Second-Hand Smoke;
  • Generators;
  • Licensing the Condominium Manager and,
  • Possible Amendments to the Condominium Act

For more information on the conference and how to register, click here.

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Status Certificates and Unit Problems

In paragraph 12 of the status certificates, a condominium corporation must disclose any circumstances, of which the corporation is aware, that may result in an increase in the common expenses for the unit. Could this include a unit problem?

In my view, the answer is: “In some cases, yes.”

There are many “common element issues” that might need to be disclosed in paragraph 12 of the status certificates. Here are some examples:

  • An unexpected common element defect;
  • A common element repair or replacement that is required, or may be required, earlier than predicted by the reserve fund plan;
  • A common element repair or replacement that is, or may be, more costly than predicted by the reserve fund plan;
  • Any common element repair or replacement that is not covered by the reserve fund plan or the operating budget;
  • A reserve fund plan that calls for special assessment(s) or increase(s) in contributions to the reserve fund (beyond inflation) at any time in future;
  • A proposed common element alteration or improvement (as soon as it is receiving serious consideration);
  • An unexpected disaster that is not fully covered by insurance;
  • Any annual operating expense that is, or may be, more costly than predicted in the corporation’s budget.

Once the corporation has actual knowledge of one or more of these risks or possibilities, the corporation then must ask itself the following question:

Could this result in a special assessment/increase in common expenses (beyond inflation)?

If the answer is “yes,” then this must be disclosed in paragraph 12 of the status certificates. [Note: An inflationary increase is not a real increase. Increasing the common expenses by inflation simply keeps the common expenses constant, in real terms.]

A “unit problem” can sometimes also result in an increase in common expenses. For instance:

  • a unit defect; or
  • damage caused to the property (by a unit owner or occupant); or
  • a violation of the Condominium Act, or the corporation’s Declaration, By-laws or Rules (by a unit owner or occupant)

might each result in an increase in common expenses (for the unit), because:

  • the corporation may be required to repair the unit defect (if the owner fails to do so), and add all related costs to the owner’s common expenses (pursuant to section 92 of the Condominium Act or perhaps provisions in the Declaration); or
  • the corporation may have the right to add all costs incurred to repair common elements (damaged by a unit owner or occupant) to the unit’s common expenses; or
  • the corporation may have the right to add enforcement costs (incurred due to a violation by an owner or occupant) to the unit’s common expenses.

So, if the corporation has knowledge of a unit problem, the corporation should ask itself the following question:

Could this possibly result in an increase in the common expenses for that unit?

If the answer is “yes,” the problem might then need to be disclosed in paragraph 12 of any status certificate issued for that unit.

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Live-in Caregivers are Family

A recent Alberta decision from January, 2013, Condominium Plan No. 9910225 v. Davis (Alberta Court of Queens Bench), held that the ‘Single family’ provision in a condominium’s by-laws did not prohibit a caregiver from living in the unit with a resident. In this decision, the Court found that “the presence in a unit of a live-in caregiver, who is required to provide necessary assistance to infirm residents, does not mean the unit is ‘being used other than as a single family dwelling.

The condominium’s by-laws stated that the units could only be used as single-family dwellings, and that roomers and boarders were prohibited. The owner, who was 87 years old and blind, hired a live-in caregiver. The condominium corporation was of the view that a live-in caregiver was prohibited by the single family provision. The corporation sought to change the by-laws to specify that live-in caregivers were permitted, but 90% of the voting unit owners voted against the change at an annual general meeting. The corporation then started a court application to seek an order requiring the caregiver to vacate the unit.

The Court held that condo by-laws are a private contract among unit owners, to which the Alberta Human Rights Act and the Canadian Charter of Rights and Freedoms do not apply. It also held that there were no prior cases on the issue of whether live-in caregivers, nannies, or maids were prohibited by single family provisions. The Court therefore made its decision based on its interpretation of the by-law itself, finding that the by-law did not prohibit live-in caregivers.

In coming to its decision, the Court examined a ‘purposive provision’ in the by-law. This provision stated that the purpose of the by-law included health, safety, comfort, and convenience of condo owners. The Court found that these purposes were incompatible with prohibiting live-in caregivers who are required to provide necessary care to residents.  Therefore, the Court felt that the term “family” should be interpreted to include live-in caregivers. The Court added that it would be open to the corporation to pass a new by-law, specifically prohibiting live-in caregivers, if it wished, stating; “that way, prospective purchasers might be made aware that, in the event that they suffer some catastrophe or infirmity, [the corporation] will require them to vacate, rather than have access to necessary live-in medical care.

What does this decision mean for Ontario condominium corporations? This decision is helpful for corporations that have single-family provisions, but wish to allow live-in caregivers. On the other hand, corporations that are seeking to exclude live-in caregivers, with or without an express provision to this effect, are still facing some uncertainty. My sense is that the Court only decided this matter with reference to the by-law to avoid addressing the more contentious human rights issue. The Court’s decision that the Alberta Human Rights Act did not apply to condo corporations was based on a narrow application of that Act. In Ontario, we know that the Human Rights Code and the Accessibility for Ontarians with Disabilities Act both apply to condo corporations and that it would be more difficult to avoid the human rights implications of such a prohibition. As such, I believe that prohibition of live-in caregivers might not even be possible in Ontario.

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Court Considers: Forced Sale of Owner’s Unit or Forced Removal from the Board

In extreme cases; such as when dealing with a very unruly owner or Director; the courts are sometimes asked for an order requiring the owner to sell his or her unit, or, in the case of a Director, requiring the removal of the Director from the Board. The most recent case of this sort in Ontario is the case of YCC 137 v. Hayes.

Here’s my summary of the case, published in the November 2012 edition of Condo Cases Across Canada, which I author, and is published quarterly by the National Chapter of the Canadian Condominium Institute (CCI).

York Condominium Corporation No. 137 v. Hayes (Ontario Superior Court) August 7, 2012

Court orders owner to refrain from assaulting, verbally abusing, swearing at, harassing, threatening or intimidating others.

The respondent owner, also a Board member, had engaged in violent and threatening behaviour. The details were summarized by the Court as follows:

“…the (owner) committed no less than five physical assaults on other condominium unit owners or occupiers and, in several other instances, engaged in verbal abuse, threats and intimidation in relation to a board member, other unit owners or occupiers and service providers to the condominium. The result of this behaviour is that the respondent has repeatedly intimated and instilled fear in a number of her fellow members of this community.

The Court held as follows:

“I am, therefore, satisfied that the (condominium corporation) has proved the various forms of misconduct, as summarized above, on a balance of probabilities. In all the circumstances, I am satisfied that the (condominium corporation) has proved that the (owner) has been repeatedly in violation of s. 117 of the Act and has also violated the declaration, by-laws and rules of the condominium.

The Court granted an order restraining the owner from continuing her improper conduct (which was specifically spelled out in the order). The Court declined to grant a “broad, permanent injunction” (requested by the condominium corporation) which would restrain the owner’s conduct in virtually all aspects of her interaction with the condominium and the members of its community. The Court felt that this would be “both overreaching and unworkable,” and instead granted a more specific order prohibiting the owner from repeating her improper conduct.

The Court also declined to order that the owner be removed from the Board. The Court said that such an order might be possible under section 134 of the Condominium Act, 1998 in another case (where the respondent’s election was at issue), but was not appropriate on the facts of this case. The Court also said:

“In any event, even if I were to conclude that the jurisdiction of the court extended to the granting of an order removing a member of the board in the circumstances of this case, I would decline to exercise my discretion on the basis that there is a clear, well-established democratic process for the removal of a director prior to the expiration of his or her term set out in the legislation.”

The Court declined to order that the owner sell her unit and vacate the condominium, stating:

“…the remedy of forced sale is, in many ways, the ultimate and harshest remedy available. As such, it should be reserved for the most egregious cases.

In my view, before the harshest remedy is imposed, the (owner) ought to be given the opportunity to show that she is capable of complying with the rules and regulations governing behaviour in this community. I have made a restraining order imposing limitations on her behaviour. It is to be hoped that this order will have a salutary effect and that the (owner) is able to demonstrate her willingness to change and conduct herself in accordance with the rules which she agreed to when she purchased her unit.”

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