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	<title>Condominium Act - British Columbia Law Institute</title>
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		<title>Ontario court refuses to amend condominium’s declaration to remove provisions enabling short-term rentals</title>
		<link>https://www.bcli.org/ontario-court-refuses-to-amend-condominiums-declaration-to-remove-provisions-enabling-short-term-rentals/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=ontario-court-refuses-to-amend-condominiums-declaration-to-remove-provisions-enabling-short-term-rentals</link>
		
		<dc:creator><![CDATA[Kevin Zakreski]]></dc:creator>
		<pubDate>Fri, 10 Nov 2017 17:00:12 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Condominium Act]]></category>
		<category><![CDATA[Strata Property Act]]></category>
		<guid isPermaLink="false">https://www.bcli.org/?p=14738</guid>

					<description><![CDATA[<p>With the advent of online services such as Airbnb, short-term rentals have been causing increasing anxiety for strata and condominium corporations across the country. This anxiety has spilled over into the courts, particularly in Ontario. Late last year, that province saw an important decision&#160;on a condominium corporation’s power to restrict<a class="moretag" href="https://www.bcli.org/ontario-court-refuses-to-amend-condominiums-declaration-to-remove-provisions-enabling-short-term-rentals/"> Read more</a></p>
<p>The post <a href="https://www.bcli.org/ontario-court-refuses-to-amend-condominiums-declaration-to-remove-provisions-enabling-short-term-rentals/">Ontario court refuses to amend condominium’s declaration to remove provisions enabling short-term rentals</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></description>
										<content:encoded><![CDATA[<p>With the advent of online services such as Airbnb, short-term rentals have been causing increasing anxiety for strata and condominium corporations across the country. This anxiety has spilled over into the courts, particularly in Ontario. Late last year, that province saw an <a href="https://www.bcli.org/ontario-court-holds-that-condominium-validly-prohibited-short-term-rentals" target="_blank" rel="noopener">important decision</a>&nbsp;on a condominium corporation’s power to restrict short-term rentals. But another decision from earlier this month points to some of the limits on that power.</p>
<p>In <em>TSCC No 1556 and No 1600 v Owners of TSCC No 1556</em>, <a href="https://canlii.ca/t/hn83r" target="_blank" rel="noopener">2017 ONSC 6542</a>, “[t]wo sister condominium corporations” located in the city of Toronto <a href="https://canlii.ca/t/hn83r#par1" target="_blank" rel="noopener">asked</a> the Ontario Superior Court of Justice for “an order amending their declarations to eliminate provisions, deliberately inserted into the declarations, that expressly permit transient, short-term rentals within the condominiums.” Even though “[t]here have been no complaints or problems with short-term rentals,” the applicant condominium corporations <a href="https://canlii.ca/t/hn83r#par1" target="_blank" rel="noopener">said</a>&nbsp;they needed the order “to prevent future problems.” The condominium corporations <a href="https://canlii.ca/t/hn83r#par1" target="_blank" rel="noopener">argued</a>&nbsp;that “the leasing provisions are inconsistent with the provisions of the <a href="https://canlii.ca/t/5306z" target="_blank" rel="noopener"><em>Condominium Act, 1998</em></a>, S.O. 1998, c. 19, with the applicable zoning by-law, and with a restrictive covenant registered on title to the lands on which the condominiums are situate.”</p>
<p>The condominium corporations served the application on all of their owners. Three of them participated in the hearing of the application. Two of these <a href="https://canlii.ca/t/hn83r#par3" target="_blank" rel="noopener">respondents</a> were</p>
<blockquote><p><em>represented by counsel who is retained by an entity known as DelSuites Inc., a company in the business of providing furnished short-term rental accommodations across the Greater Toronto Area. DelSuites manages a number of units in the condominiums. It is related to Del Condominium Rentals, which is in the business of condominium rental management. Both DelSuites and Del Condominium Rentals are part of the Tridel Group of Companies. Tridel was the developer of the condominiums and the declarant of the declarations of TSCC 1556 and TSCC 1600.</em></p></blockquote>
<p>The case turned on the condominium corporations’ declarations. A declaration is the charter document for an Ontario condominium corporation. There is no real equivalent to it in British Columbia’s law. It can be thought of as combining aspects of a strata plan and a strata corporation’s bylaws.</p>
<p>A declaration is crafted by the condominium’s developer. It is difficult for the owners to amend it. Any amendment must be approved by <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec107subsec1" target="_blank" rel="noopener">at least 80 percent of the owners</a>. But Ontario’s legislation does empower the courts to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec109subsec1" target="_blank" rel="noopener">order an amendment to the declaration</a>. That legislative provision was the focus of this case.</p>
<p>The condominium corporations <a href="https://canlii.ca/t/hn83r#par6" target="_blank" rel="noopener">argued</a>&nbsp;that the court should order the amendment for the following reasons:</p>
<blockquote><p><em>The applicants argue that the declarations are inconsistent with the Act in two ways: because they impermissibly grant rights with respect to occupancy and use and because they interfere with the ability of the condominium boards to make rules.</em></p></blockquote>
<p>The court didn’t accept these arguments, <a href="https://canlii.ca/t/hn83r#par14" target="_blank" rel="noopener">concluding</a>&nbsp;that the relevant provision in the <a href="https://canlii.ca/t/hn83r#par10" target="_blank" rel="noopener">declaration</a>&nbsp;dealt with restrictions on the use of condominium unit, not on enabling rights inconsistent with the act:</p>
<blockquote><p><em>In my view, these provisions of the declarations do not purport to grant rights. The right to lease a property short-term, or at all, is a right of ownership. The declarations restrict the uses to which the units may be put, and in defining the scope of the restrictions, make clear that occupancy and leasing, including short-term leasing, of the units are not restricted uses. The declarations do not create the right to lease; they merely make clear that in restricting other uses, they do not restrict the right to lease.</em></p></blockquote>
<p>The court dealt briefly with the condominium corporations’ other arguments, finding no inconsistencies with <a href="https://canlii.ca/t/hn83r#par25" target="_blank" rel="noopener">zoning bylaws</a>&nbsp;or with a <a href="https://canlii.ca/t/hn83r#par36" target="_blank" rel="noopener">restrictive covenant</a>&nbsp;registered on title to the lands.</p>
<p>Finally, while the court had some sympathy for the condominium corporations’ predicament, it also sympathized with the owners who purchased units on the strength of the declaration and <a href="https://canlii.ca/t/hn83r#par37" target="_blank" rel="noopener">suggested</a>&nbsp;that balancing the interests of the two groups is a task for the legislature:</p>
<blockquote><p><em>The applicants argue that the advent of organizations like Airbnb has changed the nature of short-term leasing. They argue that the developer, Tridel, included the provisions about short-term leasing in the declarations to protect its business model in the wake of cases like Zeidan. Indeed, Tridel’s witness admitted that was the case. The applicants urge me not to allow developers to hold condominium boards hostage by allowing developers to enshrine whatever business protections they seek in a condominium’s declaration. They argue that the process available to condominium unit owners under <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec107subsec1" target="_blank" rel="noopener">s. 107</a> of the Act is difficult, because there is much apathy on the part of condominium owners, such that getting the requisite 80% approval to amend a declaration is a practical impediment to desirable changes to a declaration. I have sympathy for these arguments.</em></p>
<p><em>On the other hand, Mr. Hatahan [a respondent] deposes that the ability to earn rental income from Airbnb has allowed him to meet his daily living expenses including those related to his condominium. Mr. Hatahan deposes that he relied on the ability to rent or lease his condo when deciding to purchase it.&nbsp;.&nbsp;.&nbsp;.</em></p>
<p><em>If developers can enshrine business protections in the declarations of the condominiums they develop, the solution for the unit owners who find this undesirable is to amend the declaration pursuant to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec107subsec1" target="_blank" rel="noopener">s. 107</a> of the Act. If the 80 percent threshold is unreasonably high to facilitate change that is desirable, and perhaps especially desirable to some in the current climate where websites like Airbnb make short-term leasing widespread and readily available, the remedy lies in legislative change to the threshold. The remedy is not to take what is fundamentally an amendment to a declaration that the board desires and repackage it as an inconsistency in order to seek relief under <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec109subsec1" target="_blank" rel="noopener">s. 109</a> of the Act.</em></p></blockquote>
<p>In the <a href="https://canlii.ca/t/hn83r#par40" target="_blank" rel="noopener">result</a>, the application was dismissed.</p><p>The post <a href="https://www.bcli.org/ontario-court-refuses-to-amend-condominiums-declaration-to-remove-provisions-enabling-short-term-rentals/">Ontario court refuses to amend condominium’s declaration to remove provisions enabling short-term rentals</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></content:encoded>
					
		
		
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		<title>New coming-into-force dates announced for Ontario condo reforms</title>
		<link>https://www.bcli.org/new-coming-into-force-dates-announced-for-ontario-condo-reforms/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=new-coming-into-force-dates-announced-for-ontario-condo-reforms</link>
		
		<dc:creator><![CDATA[Kevin Zakreski]]></dc:creator>
		<pubDate>Wed, 14 Jun 2017 16:10:21 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Condominium Act]]></category>
		<category><![CDATA[Strata Property Act]]></category>
		<guid isPermaLink="false">https://www.bcli.org/?p=14019</guid>

					<description><![CDATA[<p>A report&#160;has surfaced in Ontario that the ministry of government and consumer services&#160;has announced new dates on which provisions of the Protecting Condominium Owners Act, 2015 (PDF), are projected to come into force. The Protecting Condominium Owners Act, 2015, is the fruit of a major law-reform initiative in Ontario. It<a class="moretag" href="https://www.bcli.org/new-coming-into-force-dates-announced-for-ontario-condo-reforms/"> Read more</a></p>
<p>The post <a href="https://www.bcli.org/new-coming-into-force-dates-announced-for-ontario-condo-reforms/">New coming-into-force dates announced for Ontario condo reforms</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></description>
										<content:encoded><![CDATA[<p>A r<a href="https://condoadviser.ca/2017/06/new-dates-for-the-implementation-of-the-condo-act/condo-law-blog-Ontario" target="_blank" rel="noopener noreferrer">eport</a>&nbsp;has surfaced in Ontario that the <a href="https://www.ontario.ca/page/ministry-government-and-consumer-services" target="_blank" rel="noopener noreferrer">ministry of government and consumer services</a>&nbsp;has announced new dates on which provisions of the <em>Protecting Condominium Owners Act, 2015</em> (<a href="https://www.ontla.on.ca/bills/bills-files/41_Parliament/Session1/b106ra.pdf" target="_blank" rel="noopener noreferrer">PDF</a>), are projected to come into force.</p>
<p>The <em>Protecting Condominium Owners Act, 2015</em>, is the fruit of <a href="https://www.bcli.org/major-changes-coming-to-ontario-condominium-law" target="_blank" rel="noopener noreferrer">a major law-reform initiative in Ontario</a>. It significantly amends Ontario’s <a href="https://canlii.ca/t/2xt" target="_blank" rel="noopener noreferrer"><em>Condominium Act, 1998</em></a>, establishes a new <a href="https://www.cmrao.ca/" target="_blank" rel="noopener noreferrer">Condominium Management Regulatory Authority of Ontario</a>, and creates a new <a href="https://www.condoauthorityontario.ca/" target="_blank" rel="noopener noreferrer">Condominium Authority of Ontario and dispute-resolution system</a>.</p>
<p>The key dates <a href="https://condoadviser.ca/2017/06/new-dates-for-the-implementation-of-the-condo-act/condo-law-blog-Ontario" target="_blank" rel="noopener noreferrer">appear</a>&nbsp;to be:</p>
<ul>
<li>1 September 2017: condominium authority designated; oversight of tribunal begins;</li>
<li>1 November 2017: major governance changes for <em>Condominium Act, 1998</em>, come into effect; management regulatory authority and licensing of condominium managers operational;</li>
<li>1 February 2018: remainder of <em>Condominium Management Services Act, 2015</em>, in force.</li>
</ul>
<p>For more detail, see this recently updated <a href="https://www.ontario.ca/laws/proclamations" target="_blank" rel="noopener noreferrer">list of Ontario proclamations</a>&nbsp;(search: &#8220;Protecting Condominium Owners Act, 2015&#8221;), which gives the following dates on which provisions of the <em>Protecting Condominium Owners Act, 2015</em>, are planned to come into force. (Readers are cautioned that these dates are subject to change.)</p>
<h2 id="table">Table</h2>
<p><strong>Source statute</strong>&nbsp;&nbsp;<strong>Provisions &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;</strong><strong>Date in force Parent &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; (d/m/y) &nbsp; &nbsp; &nbsp;statute</strong></p>
<div id="example_wrapper" class="dataTables_wrapper no-footer">
<table id="example" class="dataTable no-footer">
<tbody>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 1, 77, 78</td>
<td>12/06/2017</td>
<td>Condominium Management Services Act, 2015</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 48, 52-71</td>
<td>01/02/2018</td>
<td>Condominium Management Services Act, 2015</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 80 (4)</td>
<td>01/02/2018</td>
<td>Condominium Act, 1998</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 81</td>
<td>01/11/2017</td>
<td>Licence Appeal Tribunal Act, 1999</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 2-47, 49-51, 72-76, 82</td>
<td>01/11/2017</td>
<td>Condominium Management Services Act, 2015</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1,</td>
<td>&nbsp;</td>
<td>Ontario New Home Warranties Plan Act</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 154 (1)-(10), (12)-(14)</td>
<td>&nbsp;</td>
<td>Ontario New Home Warranties Plan Act</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 154 (11)</td>
<td>01/11/2017</td>
<td>Ontario New Home Warranties Plan Act</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 147</td>
<td>&nbsp;</td>
<td>Building Code Act, 1992</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 80 (1), (5), (8)-(13), (16)-(18)</td>
<td>01/11/2017</td>
<td>Condominium Act, 1998</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 2, s. 80 (6), (7), (14), (15), (19), (20)</td>
<td>&nbsp;</td>
<td>Condominium Act, 1998</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 1 (2), (3), (5), (9), (11), (13), (16)-(19), 7, 9, 10 (1), (2), (4)-(9), 12, 14-18, 19 (1)-(4), (6), (7), 23, 24, 26 (2), 28, 33, 34, 36 (2), (4), (6), (7), 37, 39 (2), (3), 40, 44 (1), 46 (2)-(4), 52 (5)-(9), (11), 55, 57, 59-66, 67 (2)-(6), 68-74, 76, 77, 79 (1), 82, 83 (1), 84-91, 93 (1), (2), 97-102, 104 (1), 105 (2), (3), 106 (2)-(4), 107 (2), (4), 108 (1), (3), (4), 109, 110, 111 (3), 112-115, 116 91), (3)-(5), 117, 118, 121, 122 (1), 123-135, 137-140, 142, 144 (2), (4), (7)-(11), (13), 146 (4)</td>
<td>&nbsp;</td>
<td>Condominium Act, 1998</td>
</tr>
<tr class="odd">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 1 (7), 6, 8, 10 (3), 11, 13, 19 (5), 20, 22, 25, 26 (1), 27, 29-32, 35, 36 (1), (3), (5), 38, 39 (1), 41-43, 44 (2), 45, 46 (1), 47, 48 (1), (3), 49-51, 52 (1)-(4), (10), (12), (13), 53, 54, 56, 58, 67 (1), 75, 78, 79 (2), (3), 80, 81, 83 (2), 92, 93 (3), (4), 94-96, 103, 104 (2), 105 (1), 106 (1), 107 (1), (3), 108 (2), 111 (1), (2), 116 (2), 122 (2), 136, 141, 145</td>
<td>01/11/2017</td>
<td>Condominium Act, 1998</td>
</tr>
<tr class="even">
<td>Protecting Condominium Owners Act, 2015, S.O. 2015, c. 28</td>
<td>Sched. 1, s. 1 (1), (4), (6), (8), (10), (14), (15), 2, 4, 5, 21, 119, 120, 144 (1), (3), (6), (12), (14), 146 (1), (2), (3), (5)</td>
<td>01/09/2017</td>
<td>Condominium Act, 1998</td>
</tr>
</tbody>
</table>
</div>
<p>&nbsp;</p>
<p>&nbsp;</p><p>The post <a href="https://www.bcli.org/new-coming-into-force-dates-announced-for-ontario-condo-reforms/">New coming-into-force dates announced for Ontario condo reforms</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></content:encoded>
					
		
		
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		<title>Strata corporation’s fines against business owner found to be significantly unfair</title>
		<link>https://www.bcli.org/strata-corporations-fines-against-business-owner-found-to-be-significantly-unfair/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=strata-corporations-fines-against-business-owner-found-to-be-significantly-unfair</link>
		
		<dc:creator><![CDATA[Kevin Zakreski]]></dc:creator>
		<pubDate>Fri, 24 Feb 2017 23:58:35 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[News]]></category>
		<category><![CDATA[Condominium Act]]></category>
		<category><![CDATA[Strata Property Act]]></category>
		<guid isPermaLink="false">https://www.bcli.org/?p=13411</guid>

					<description><![CDATA[<p>In Omnicare Pharmacy Ltd v The Owners, Strata Plan LMS 2854, 2017 BCSC 256, a strata corporation and an owner of a nonresidential strata lot grappled with some of the challenges&#160;of “[l]iving and operating a business on the Downtown Eastside.” The case involved a longstanding dispute over whether the owner’s<a class="moretag" href="https://www.bcli.org/strata-corporations-fines-against-business-owner-found-to-be-significantly-unfair/"> Read more</a></p>
<p>The post <a href="https://www.bcli.org/strata-corporations-fines-against-business-owner-found-to-be-significantly-unfair/">Strata corporation’s fines against business owner found to be significantly unfair</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></description>
										<content:encoded><![CDATA[<p>In <em>Omnicare Pharmacy Ltd v The Owners, Strata Plan LMS 2854</em>, <a href="https://canlii.ca/t/gxlct" target="_blank" rel="noopener">2017 BCSC 256</a>, a strata corporation and an owner of a nonresidential strata lot grappled with some of the <a href="https://canlii.ca/t/gxlct#par164" target="_blank" rel="noopener">challenges</a>&nbsp;of “[l]iving and operating a business on the Downtown Eastside.” The case involved a longstanding dispute over whether the owner’s business attracted conduct that could be considered a nuisance. The court found, on a review of the strata corporation’s bylaws, that many of those bylaws were not adopted in accordance with <a href="https://www.bclaws.ca/civix/document/LOC/complete/statreg/--%20S%20--/Strata%20Property%20Act%20[SBC%201998]%20c.%2043/00_Act/98043_07.xml#section128" target="_blank" rel="noopener">section 128</a>&nbsp;of the act and that its nuisance bylaw had been applied in a manner that was significantly unfair under <a href="https://www.bclaws.ca/civix/document/LOC/complete/statreg/--%20S%20--/Strata%20Property%20Act%20[SBC%201998]%20c.%2043/00_Act/98043_10.xml#section164" target="_blank" rel="noopener">section 164</a>.</p>
<h2><strong>Facts and issues</strong></h2>
<p>The strata corporation in the case was <a href="https://canlii.ca/t/gxlct#par12" target="_blank" rel="noopener">created in 1997</a>, under the old <em>Condominium Act</em>. It <a href="https://canlii.ca/t/gxlct#par9" target="_blank" rel="noopener">consisted of</a>&nbsp;“eight nonresidential strata lots and 74 residential strata lots,” located in the Downtown Eastside of Vancouver.</p>
<p>The petitioner was the “<a href="https://canlii.ca/t/gxlct#par1" target="_blank" rel="noopener">owner</a>&nbsp;of three ground-level, nonresidential strata lots” in the strata corporation. Since 2000, the petitioner has <a href="https://canlii.ca/t/gxlct#par2" target="_blank" rel="noopener">operated a pharmacy</a>&nbsp;from one of these strata lots. This <a href="https://canlii.ca/t/gxlct#par2" target="_blank" rel="noopener">pharmacy</a>&nbsp;“is open 7 days a week, 365 days a year” and “serves, on average, about 200 customers a day, many or most of whom live in the neighbourhood.”</p>
<p>“<a href="https://canlii.ca/t/gxlct#par3" target="_blank" rel="noopener">For many years</a>, the operation of the Pharmacy has created considerable friction” between the petitioner and the strata corporation. This friction resulted in the petitioner <a href="https://canlii.ca/t/gxlct#par3" target="_blank" rel="noopener">commencing</a>&nbsp;“legal proceedings against the Strata Corporation” in 2009. The proceedings “ultimately were settled by a <a href="https://canlii.ca/t/gxlct#par3" target="_blank" rel="noopener">consent order</a>&nbsp;in 2011.” Concerns <a href="https://canlii.ca/t/gxlct#par52" target="_blank" rel="noopener">continued to mount</a>&nbsp;in “a growing sense of frustration and anger regarding Omnicare’s business operations,” which residents characterized as breeding litter, loitering, and harassment.</p>
<p>The strata corporation’s bylaws were at the heart of this case. These bylaws were originally adopted under the <em>Condominium Act</em>. When the <em>Strata Property Act</em> came into force in 2000, a transitional period to new standard bylaws was opened. The strata corporation amended its bylaws during this transitional period and thereafter. The strata corporation’s <a href="https://canlii.ca/t/gxlct#par29" target="_blank" rel="noopener">practice</a>&nbsp;was to approve bylaw amendments in a “single resolution,” and typically “there was no record made of the number of owners of residential and nonresidential strata lots, respectively, that were in attendance at the meeting, and no record was made of the number of votes cast on each resolution by each group, separately.”</p>
<p><a href="https://canlii.ca/t/gxlct#par4" target="_blank" rel="noopener">Beginning</a>&nbsp;“in December 2015, the Strata Corporation (through its property manager) sent a series of letters to Omnicare asserting that Omnicare was in breach of various bylaws. Many of the alleged breaches related to what was asserted to be the conduct of individuals who were said to be customers of the Pharmacy. Ultimately, the Strata Corporation levied a total of $1,000 in fines against Omnicare.”</p>
<p>The petitioner ultimately applied to the supreme court, seeking (among other things) relief from these fines and declarations that the bylaws underlying them were invalid.</p>
<p>The court addressed <a href="https://canlii.ca/t/gxlct#par97" target="_blank" rel="noopener">three issues</a>&nbsp;arising from these facts:</p>
<ul>
<li>Are the current bylaws valid?</li>
<li>Did the petitioner breach the strata corporation’s nuisance bylaw?</li>
<li>Has the Strata Corporation treated the petitioner in a manner that is significantly unfair?</li>
</ul>
<h2><strong>Are the current bylaws valid?</strong></h2>
<p>The court found its answer to this issue in section 128 (1) (c)&nbsp;of the act. This provision establishes the procedures for amending strata-corporation bylaws. It calls for separate resolutions in mixed-use stratas (such as the one at issue in this case):</p>
<blockquote><p><em>Subject to section 197, amendments to bylaws must be approved at an annual or special general meeting .&nbsp;.&nbsp;. in the case of a strata plan composed of both residential and nonresidential strata lots, by both a resolution passed by a 3/4 vote of the residential strata lots and a resolution passed by a 3/4 vote of the nonresidential strata lots, or as otherwise provided in the bylaws for the nonresidential strata lots.</em></p></blockquote>
<p>It was <a href="https://canlii.ca/t/gxlct#par100" target="_blank" rel="noopener">common ground in this case</a>&nbsp;that this procedure hadn’t been followed for most of the bylaws that the strata corporation had enforced against the petitioner. The question for the court was whether this amounted to a substantive defect or a mere technical breach that the court had the discretion to remedy.</p>
<p>In the court’s <a href="https://canlii.ca/t/gxlct#par116" target="_blank" rel="noopener">view</a>, the defect was substantive because it had deprived the petitioner of its democratic rights:</p>
<blockquote><p><em>In my opinion, s. 128(1)(c) of the Strata Property Act cannot be interpreted in a way that leaves the court with a discretion to override the democratic rights provided for in that section.</em></p>
<p><em>Under s. 128(1)(c) of the Act, a nonresidential owner has the democratic right to vote separately from the residential owners and to have its voice heard. There are no other provisions in the Act that would empower either the strata council or the court to dispense with the statutory requirement for separate residential and nonresidential voter approval of a bylaw amendment under s. 128, and clearer wording would be needed to override such a fundamental right. Treating the Current Bylaws as valid (as the Strata Corporation asks the court to do) deprives nonresidential owners of their democratic right to vote as a separate group, a right given to them under s. 128(1)(c) of the Act.</em></p>
<p><em>In that light, and contrary to the Strata Corporation’s submissions, the court cannot exercise a “discretion” in favour of upholding the validity of the Current Bylaws in the face of non-compliance with s. 128(1)(c). Rather, the consequence of the failure to comply with s. 128(1)(c) is that the Current Bylaws are invalid, and I so find.</em></p></blockquote>
<h2><strong>Did the petitioner breach the strata corporation’s nuisance bylaw?</strong></h2>
<p>The strata corporation’s nuisance bylaw was a copy of section 3 (1) of the standard bylaws. As such, it was the one bylaw at issue to survive this declaration of invalidity. This gave the court the opportunity to consider whether the petitioner’s business practices and customers had in fact put the petitioner in breach of the bylaw.</p>
<p>After <a href="https://canlii.ca/t/gxlct#par133" target="_blank" rel="noopener">lamenting</a>&nbsp;the state of the evidence on this point (particularly the evidence marshalled by the strata corporation), the court declined to make a ruling on this issue. The court&nbsp;<a href="https://canlii.ca/t/gxlct#par135" target="_blank" rel="noopener">said</a>&nbsp;that “in view of the conflicts in the evidence, I prefer to deal with the question of whether the fines for asserted breaches of the Nuisance Bylaw should be cancelled in the context of whether the Strata Corporation has treated Omnicare in a manner that is significantly unfair.”</p>
<h2><strong>Has the Strata Corporation treated the petitioner in a manner that is significantly unfair?</strong></h2>
<p>The court began its analysis of this issue by <a href="https://canlii.ca/t/gxlct#par147" target="_blank" rel="noopener">reviewing</a>&nbsp;several leading cases on the test for applying section 164<strong>&nbsp;</strong>of the act: <em>Reid v The Owners, Strata Plan LMS 2503</em>, <a href="https://canlii.ca/t/4wmn#par11" target="_blank" rel="noopener">2001 BCSC 1578</a>, aff’d <a href="https://canlii.ca/t/5d25#par27" target="_blank" rel="noopener">2003 BCCA 126</a>; <em>Dollan v The Owners, Strata Plan BCS 1569</em>, <a href="https://canlii.ca/t/fpssr#par28" target="_blank" rel="noopener">2012 BCCA 44</a>; <em>Radcliffe v The Owners, Strata Plan KAS1436</em>, <a href="https://canlii.ca/t/glt06#par39" target="_blank" rel="noopener">2015 BCCA 448</a>. These cases <a href="https://canlii.ca/t/gxlct#par147" target="_blank" rel="noopener">emphasize</a>&nbsp;that that “[t]he term ‘significantly unfair’ in s. 164 encompasses conduct that is oppressive or unfairly prejudicial.”</p>
<p>In the court’s view, the strata corporation’s actions had been <a href="https://canlii.ca/t/gxlct#par151" target="_blank" rel="noopener">oppressive and unfairly prejudicial</a>&nbsp;to the petitioner:</p>
<blockquote><p><em>I find that the actions of the Strata Council, in purporting to levy fines against Omnicare based on breaches of bylaws that had not been validly passed, and that were being levied by a Strata Council that was not validly constituted, were burdensome, harsh and wrongful, and those actions were therefore oppressive and significantly unfair.</em></p>
<p><em>I turn then to the fines that were levied against Omnicare based on the Nuisance Bylaw. </em></p>
<p><em>In my opinion, these fines were wrongful (and therefore oppressive) and unjust (and therefore unfairly prejudicial) because they were being levied by a Strata Council that was not validly constituted. A strata lot owner is entitled reasonably to expect that it will not be subjected to assertions that its conduct breached a valid bylaw and assessed a fine, except where the strata council has been duly constituted in accordance with valid bylaws. That never happened in relation to any of the four fines levied against Omnicare based on breach of the Nuisance Bylaw. Therefore, I find that, on the facts here, Omnicare’s reasonable expectations were violated by actions that were significantly unfair. I conclude in that light that the appropriate remedy is to cancel all fines levied against Omnicare based on breach of the Nuisance Bylaw. I so order.</em></p></blockquote>
<h2><strong>Result</strong></h2>
<p>In the <a href="https://canlii.ca/t/gxlct#par161" target="_blank" rel="noopener">result</a>, the court declared the current bylaws invalid, declared that the strata corporation had treated the petitioner in a significantly unfair manner, and cancelled the fines levied against the petitioner. The petitioner was also granted <a href="https://canlii.ca/t/gxlct#par165" target="_blank" rel="noopener">costs on Scale B</a>.</p><p>The post <a href="https://www.bcli.org/strata-corporations-fines-against-business-owner-found-to-be-significantly-unfair/">Strata corporation’s fines against business owner found to be significantly unfair</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></content:encoded>
					
		
		
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		<title>Ontario Court of Appeal: Business judgment rule applies to condo board decisions</title>
		<link>https://www.bcli.org/ontario-court-of-appeal-business-judgment-rule-applies-to-condo-board-decisions/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=ontario-court-of-appeal-business-judgment-rule-applies-to-condo-board-decisions</link>
		
		<dc:creator><![CDATA[Kevin Zakreski]]></dc:creator>
		<pubDate>Wed, 31 Aug 2016 20:14:36 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[Condominium Act]]></category>
		<category><![CDATA[Strata Property Act]]></category>
		<guid isPermaLink="false">https://www.bcli.org/?p=12735</guid>

					<description><![CDATA[<p>In a decision released yesterday, Ontario’s top court has made it clear that decisions taken by a condominium’s board of directors (what in British Columbia is called a strata council) are covered by the business judgment rule. “This rule,” as the court defines it, “recognizes the autonomy and integrity of<a class="moretag" href="https://www.bcli.org/ontario-court-of-appeal-business-judgment-rule-applies-to-condo-board-decisions/"> Read more</a></p>
<p>The post <a href="https://www.bcli.org/ontario-court-of-appeal-business-judgment-rule-applies-to-condo-board-decisions/">Ontario Court of Appeal: Business judgment rule applies to condo board decisions</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></description>
										<content:encoded><![CDATA[<p>In a decision released yesterday, Ontario’s top court has made it clear that decisions taken by a condominium’s board of directors (what in British Columbia is called a strata council) are covered by the business judgment rule. “This rule,” as the court <a href="https://canlii.ca/t/gt58s#par48" target="_blank" rel="noopener">defines</a> it, “recognizes the autonomy and integrity of corporations, and the fact that directors and officers are in a far better position to make decisions affecting their corporations than a court reviewing a matter after the fact.” So, “where the rule applies, a court will not second-guess a decision rendered by a board as long as it acted fairly and reasonably.”</p>
<p><em>3716724 Canada Inc v Carleton Condominium Corporation No 375</em>, <a href="https://canlii.ca/t/gt58s" target="_blank" rel="noopener">2016 ONCA 650</a>, <a href="https://canlii.ca/t/gt58s#par12" target="_blank" rel="noopener">involved</a>&nbsp;“a mixed-use condominium building, containing both residential and commercial units, located in the ByWard Market area in Ottawa, Ontario.” The <a href="https://canlii.ca/t/gt58s#par13" target="_blank" rel="noopener">respondent</a>&nbsp;“owns a number of commercial parking spots in the condominium. It rented out the parking spots on monthly basis since it purchased them.” Citing a drop-off in this business’s profitability, the respondent <a href="https://canlii.ca/t/gt58s#par13" target="_blank" rel="noopener">advised</a>&nbsp;the appellant condominium corporation that it “wanted to convert its business to a ‘pay and display’ hourly parking operation.”</p>
<p>The condominium’s declaration expressly permitted such an operation. But bringing it into existence would <a href="https://canlii.ca/t/gt58s#par14" target="_blank" rel="noopener">entail</a>&nbsp;“a number of changes to the condominium’s common elements.” Going ahead with these changes would require, at a minimum, the board’s approval.</p>
<p>The <a href="https://canlii.ca/t/gt58s#par18" target="_blank" rel="noopener">board</a>&nbsp;“refused to approve the requested changes, citing security concerns.” These <a href="https://canlii.ca/t/gt58s#par16" target="_blank" rel="noopener">concerns were tied to</a>&nbsp;the fact that “[t]he condominium is located in a high-crime area with a significant transient population. The parties recognized that some of the changes requested by the respondent would increase the risk of trespassers gaining access to the garage, which has security implications for both unit owners and anyone using the parking spots.”</p>
<p>There was some back-and-forth between the parties on the security question. In the <a href="https://canlii.ca/t/gt58s#par20" target="_blank" rel="noopener">end</a>, “[t]he Board advised the respondent .&nbsp;.&nbsp;. that it would not approve the requested changes unless the respondent agreed to provide either (i) a parking booth at the parking lot entrance with a full-time attendant; or (ii) a full-time security officer who would patrol the area with the parking spots.”</p>
<p>The respondent was unwilling to bear the full cost of these security measures, so it “<a href="https://canlii.ca/t/gt58s#par23" target="_blank" rel="noopener">brought</a>&nbsp;this application [to court] in May 2014, alleging that the appellant’s refusal to approve the requested changes was unfairly prejudicial and unfairly disregarded its interests, contrary to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec135subsec1" target="_blank" rel="noopener">s. 135</a>&nbsp;of the [<em>Condominium Act, 1998</em>].” [NB This provision is the equivalent of section 164&nbsp;of BC’s <em>Strata Property Act</em>.]</p>
<p>The court of appeal <a href="https://canlii.ca/t/gt58s#par29" target="_blank" rel="noopener">characterized</a>&nbsp;this stage of the proceeding as follows:</p>
<blockquote><p><em>Then the application judge turned to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec135subsec1" target="_blank" rel="noopener">s. 135</a> of the Act. He did not explicitly refer to the applicable two-part test, namely that the claimant must establish (i) a breach of their reasonable expectations; and (ii) that the impugned conduct amounts to “oppression,” “unfair prejudice,” or “unfair disregard”: Metropolitan Toronto Condominium Corporation No. 1272 v. Beach Development (Phase II) Corporation, <a href="https://canlii.ca/t/fnj6b" target="_blank" rel="noopener">2011 ONCA 667</a>&nbsp;(CanLII), 285 O.A.C. 372, at <a href="https://canlii.ca/t/fnj6b#par6" target="_blank" rel="noopener">para. 6</a>. However, neither party argues that the application judge failed to identify the correct test and, when his reasons are read as a whole, it is clear that he considered this two-part test.</em></p></blockquote>
<p>The application judge <a href="https://canlii.ca/t/gt58s#par32" target="_blank" rel="noopener">ruled in favor</a>&nbsp;of the respondent:</p>
<blockquote><p><em>The application judge “had no doubt” that the Board’s concerns were reasonable. However, he concluded, at <a href="https://canlii.ca/t/gmfpg#par37" target="_blank" rel="noopener">para. 37</a>, the appellant was not being reasonable by insisting on a full-time security guard.</em></p>
<p><em>While acknowledging that a dedicated, full-time security guard would be the best option, the application judge found that “based upon the evidence” it was not a viable option. And, he further noted, it was not the only option as the respondent had “put forward a combination of other proposals that significantly [lowered] the safety risks to a point at which .&nbsp;.&nbsp;. insisting [on] a full-time security guard becomes unreasonable”: <a href="https://canlii.ca/t/gmfpg#par39" target="_blank" rel="noopener">para. 39</a></em>&nbsp;[ellipsis and words in brackets both in original].</p></blockquote>
<p>The court of appeal overturned the application judge’s ruling on this point. The court <a href="https://canlii.ca/t/gt58s#par45" target="_blank" rel="noopener">agreed</a>&nbsp;with the appellant’s argument that the application judge “erred by assessing the Board’s decision on a subjective basis and substituting his judgment for that of the Board, which had been exercised following a fair process and having regard to reasonable safety concerns.”</p>
<p>In reaching this conclusion, the court of appeal had a number of interesting things to say about judicial review of condominium board decisions. It began by <a href="https://canlii.ca/t/gt58s#par47" target="_blank" rel="noopener">noting</a>&nbsp;that “[t]he jurisprudence has occasionally recognized that decisions rendered by boards of condominium corporations should be shown some deference .&nbsp;.&nbsp;.&nbsp;. However, the topic has not been addressed in great detail.”</p>
<p>This gap in condominium jurisprudence led the court to consider a concept that is well developed in corporate law: the business judgment rule. While this rule has primarily been considered in connection with <a href="https://canlii.ca/t/gt58s#par48" target="_blank" rel="noopener">for-profit corporations</a>, the court <a href="https://canlii.ca/t/gt58s#par50" target="_blank" rel="noopener">observed</a> that:</p>
<blockquote><p><em>it has been applied to not-for-profit corporations as well: see, for example, Hadjor v. Homes First Society, 2010 ONSC 1589, 70 B.L.R. (4th) 101, at paras. 47–52. And courts in other jurisdictions have applied the rule when reviewing decisions rendered by condominium boards: see, for example, <a href="https://scholar.google.ca/scholar_case?case=12253440557390091931&amp;hl=en&amp;as_sdt=6&amp;as_vis=1&amp;oi=scholarr&amp;sa=X&amp;ved=0ahUKEwimxY78jezOAhVIwWMKHbyTCg0QgAMIHCgAMAA" target="_blank" rel="noopener">Yusin v. Saddle Lakes Home Owners Ass’n</a>, 73 A.D.3d 1168 (N.Y. App. Div. 2010); and <a href="https://law.justia.com/cases/maryland/court-of-special-appeals/1992/430-september-term-1991-0.html" target="_blank" rel="noopener">Black v. Fox Hills N. Cmty. Ass’n</a>, 599 A.2d 1228 (Md. Ct. Spec. App. 1992).</em></p></blockquote>
<p>“Moreover,” the court <a href="https://canlii.ca/t/gt58s#par51" target="_blank" rel="noopener">continued</a>, “the rationale underlying the business judgment rule in the corporate law context is also applicable to condominium corporations”:</p>
<blockquote><p><em>As representatives elected by the unit owners, the directors of these corporations are better placed to make judgments about their interests and to balance the competing interests engaged than are the courts. For instance, in this case the security concerns arose in part as a result of the condominium’s location, and the Board members’ knowledge of that area is clearly an advantage that they enjoy over any court subsequently reviewing their decision.</em></p>
<p><em>The Act provides that the directors are the ones responsible for managing the affairs of a condominium corporation: <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec27subsec1" target="_blank" rel="noopener">s. 27(1)</a>. They are also required to act honestly and in good faith, and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances: <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec37subsec1" target="_blank" rel="noopener">s. 37(1)</a>. Like their counterparts in corporate statutes, these provisions suggest that courts should be careful not to usurp the functions of</em> the <em>boards of condominium corporations.</em> [NB British Columbia’s <em>Strata Property Act</em> contains equivalent provisions: sections 4, 26, and 31.]</p>
<p><em>Therefore, to summarize, the first question for a court reviewing a condominium board’s decision is whether the directors acted honestly and in good faith and exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. If they did, then the board’s balancing of the interests of a complainant under <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec135subsec1" target="_blank" rel="noopener">s. 135</a> of the Act against competing concerns should be accorded deference. The question in such circumstances is not whether a reviewing court would have reached the same decision as the board. Rather, it is whether the board reached a decision that was within a range of reasonable choices. If it did, then it cannot be said to have unfairly disregarded the interests of a complainant.</em></p></blockquote>
<p>Applying these principles to the case at hand, the court <a href="https://canlii.ca/t/gt58s#par55" target="_blank" rel="noopener">found</a>:</p>
<blockquote><p><em>the real question was whether the Board reached a decision that was within a range of reasonable choices. Respectfully, the application judge did not focus on that question. In my view, he found in favour of the respondent because he disagreed with the balance between competing interests struck by the Board.</em></p>
<p style="text-align: center;"><strong>***</strong></p>
<p><em>The Board did not prohibit the appellant from engaging in this business or changing its business model. The Board merely put in place certain preconditions for approving changes to the condominium’s common elements in order to address the increased security risk that would be caused by the changes that the respondent wanted to make.</em></p>
<p><em>The Board considered the respondent’s desire to increase its profits, and balanced that interest against the competing security interests of other unit owners. It also considered the security implications for persons using the parking spots. The term “balancing” in these circumstances is used only as a metaphor because the Board was not balancing “like against like,” but competing interests of different natures—the economic interests of the respondent and the personal security interests of others. A condominium board sometimes will be faced with different interests that cannot be reduced to a common unit of measurement, yet still must attempt to balance them.</em></p>
<p><em>In this case, the Board’s decision had the effect of rendering the respondent’s proposal less profitable. But that does not mean that the Board unfairly disregarded the interests of the respondent. The Board was entitled, indeed required, to consider the impact of the changes on the interests of other unit owners. And as the deemed occupier of the common elements of the condominium, it was also entitled to consider the security implications for users of the common elements. It did not ignore or treat the interests of the respondent as being of no importance. It simply—in good faith and after a fair process—determined that legitimate and reasonable competing interests were more important. Its decision not to approve the requested changes to the common elements unless the respondent hired a security guard was within a range of reasonable choices.</em></p></blockquote>
<p>In the <a href="https://canlii.ca/t/gt58s#par61" target="_blank" rel="noopener">result</a>, the court allowed the appeal, dismissed the application against the respondent, and awarded the appellant costs fixed at $9500, inclusive of HST and disbursements.</p><p>The post <a href="https://www.bcli.org/ontario-court-of-appeal-business-judgment-rule-applies-to-condo-board-decisions/">Ontario Court of Appeal: Business judgment rule applies to condo board decisions</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></content:encoded>
					
		
		
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		<title>Ontario Superior Court considers cost sharing and responsibility for repairs in a mixed-use strata</title>
		<link>https://www.bcli.org/ontario-superior-court-considers-cost-sharing-and-responsibility-for-repairs-in-a-mixed-use-strata/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=ontario-superior-court-considers-cost-sharing-and-responsibility-for-repairs-in-a-mixed-use-strata</link>
		
		<dc:creator><![CDATA[Kevin Zakreski]]></dc:creator>
		<pubDate>Thu, 02 Jun 2016 23:29:35 +0000</pubDate>
				<category><![CDATA[Blog]]></category>
		<category><![CDATA[Condominium Act]]></category>
		<category><![CDATA[Strata Property Act]]></category>
		<guid isPermaLink="false">https://www.bcli.org/?p=12553</guid>

					<description><![CDATA[<p>In Middlesex Condominium Corp No 195 v Sunbelt, 2016 ONSC 1528, the Ontario Superior Court of Justice examined three issues that have raised concerns in British Columbia strata-property law as well. These issues are: (1) allocation of common expenses between commercial and residential strata lots in a mixed-use strata; (2)<a class="moretag" href="https://www.bcli.org/ontario-superior-court-considers-cost-sharing-and-responsibility-for-repairs-in-a-mixed-use-strata/"> Read more</a></p>
<p>The post <a href="https://www.bcli.org/ontario-superior-court-considers-cost-sharing-and-responsibility-for-repairs-in-a-mixed-use-strata/">Ontario Superior Court considers cost sharing and responsibility for repairs in a mixed-use strata</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></description>
										<content:encoded><![CDATA[<p>In <em>Middlesex Condominium Corp No 195 v Sunbelt</em>, <a href="https://canlii.ca/t/grwhq" target="_blank" rel="noopener">2016 ONSC 1528</a>, the Ontario Superior Court of Justice examined three issues that have raised concerns in British Columbia strata-property law as well. These issues are: (1) allocation of common expenses between commercial and residential strata lots in a mixed-use strata; (2) application of the <em>Limitation Act</em> to strata-property disputes; and (3) responsibility to repair windows.</p>
<h2><strong>Facts and background</strong></h2>
<p>The case <a href="https://canlii.ca/t/grwhq#par21" target="_blank" rel="noopener">involved</a>&nbsp;“a seven-storey mixed-use (residential and commercial) condominium” located in London, Ontario. The condominium had <a href="https://canlii.ca/t/grwhq#par22" target="_blank" rel="noopener">28 commercial units</a>&nbsp;on its first two floors and <a href="https://canlii.ca/t/grwhq#par23" target="_blank" rel="noopener">45 residential units</a>&nbsp;on its upper five floors.</p>
<p>The nub of the parties’ dispute turned on responsibility to pay for hydro. As the court <a href="https://canlii.ca/t/grwhq#par24" target="_blank" rel="noopener">explained</a>, the condominium had the following arrangement:</p>
<blockquote><p><em>The residential units are supplied hydro through a bulk feed from the local hydro service. The commercial units on the second floor are provided power through 11 meters, which are separate from the bulk feed.</em></p>
<p><em>Since at least 2006, the accounts for hydro on the second floor of the building have been paid by MCC195. On September 25, 2012 the board of directors of MCC195 resolved to commence paying the hydro accounts for the first floor.</em></p></blockquote>
<p>In 2014, the condominium corporation (MCC195) <a href="https://canlii.ca/t/grwhq#par26" target="_blank" rel="noopener">retained an electrician</a>&nbsp;“to determine the destination of the hydro feeds from the individual source meters in the utility room.” The report <a href="https://canlii.ca/t/grwhq#par26" target="_blank" rel="noopener">determined</a>&nbsp;that “each of the 11 hydro meters provided hydro to the commercial units and portions of the common elements.”</p>
<p>Based on this report, MCC195 <a href="https://canlii.ca/t/grwhq#par27" target="_blank" rel="noopener">resolved</a>&nbsp;“to rescind the earlier motions that they pay these hydro accounts,” leaving responsibility for them in the hands of the owner of the commercial units, Sunbelt.</p>
<p>MCC195 and Sunbelt also had a separate dispute over responsibility to repair windows. In 2012, MCC195 <a href="https://canlii.ca/t/grwhq#par29" target="_blank" rel="noopener">hired</a>&nbsp;engineers “to conduct a condition survey at the condominium.” The engineers’ report <a href="https://canlii.ca/t/grwhq#par29" target="_blank" rel="noopener">concluded</a>&nbsp;that:</p>
<blockquote><p><em>lateral movement of the building walls had caused a deflection that had placed stress on the aluminum framed window openings set in the concrete walls. These engineers concluded that the windows would need to be replaced to allow for movement of the concrete and to avoid placing further load on the window framing.</em></p></blockquote>
<p>After <a href="https://canlii.ca/t/grwhq#par31" target="_blank" rel="noopener">obtaining a legal opinion</a>, MCC195 decided to “pay the entire invoice for the window replacement in the sum of $35,805.00.”</p>
<h2><strong>The cost-sharing issue</strong></h2>
<p>Cost sharing is a major issue for mixed-use condominiums. Considering this issue is an important part of <a href="https://www.bcli.org/project/strata-property-law-phase-two" target="_blank" rel="noopener">BCLI’s ongoing work</a>&nbsp;on complex stratas.</p>
<p>Unlike British Columbia’s <em><a href="https://www.bclaws.ca/civix/document/id/complete/statreg/98043_00" target="_blank" rel="noopener">Strata Property Act</a></em>, Ontario’s <em><a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html" target="_blank" rel="noopener">Condominium Act, 1998</a></em>,&nbsp;contains no enabling provisions for the <a href="https://www.bclaws.ca/civix/document/LOC/complete/statreg/--%20S%20--/Strata%20Property%20Act%20[SBC%201998]%20c.%2043/00_Act/98043_11.xml#part11" target="_blank" rel="noopener">creation of separate sections</a>. Mixed-use condominiums in Ontario tend to rely on separate metering to manage the tensions that may arise from sharing common expenses strictly in accordance with unit entitlement.</p>
<p>This issue turned on the definition of “common expenses” and the implications of separate metering. The condominium’s <a href="https://canlii.ca/t/grwhq#par75" target="_blank" rel="noopener">declaration</a>&nbsp;defined “common expenses” for its purposes to include “all sums of money levied or charged to the Corporation on account of any and all public and private suppliers of insurance coverage, taxes, utilities and services including, without limiting the generality of the foregoing, levies or charges for .&nbsp;.&nbsp;. (v) fuel including gas, oil and electricity, unless these utilities are separately metered for each unit.”</p>
<p>Sunbelt argued that this provision was inapplicable to the facts. In its <a href="https://canlii.ca/t/grwhq#par82" target="_blank" rel="noopener">view</a>, “separately metered” must be read as calling for separate metering for each condominium unit. In this <a href="https://canlii.ca/t/grwhq#par22" target="_blank" rel="noopener">building</a>, “[m]any of the individual legally described condominium units have been combined to create so called ‘suites’ for the commercial tenants.” So there wasn’t a one-to-one correspondence between the 11 hydro meters and the commercial units.</p>
<p>The court <a href="https://canlii.ca/t/grwhq#par83" target="_blank" rel="noopener">rejected</a>&nbsp;this argument, <a href="https://canlii.ca/t/grwhq#par84" target="_blank" rel="noopener">noting</a>&nbsp;that “Sunbelt had control over the configuration of its units.”</p>
<h2><strong>The limitation issue</strong></h2>
<p>The parties also disputed the scope of liability for hydro payments. MCC195 <a href="https://canlii.ca/t/grwhq#par53" target="_blank" rel="noopener">claimed</a>&nbsp;“reimbursement of the hydro accounts commencing in 2006.” Sunbelt relied on <a href="https://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html#sec4" target="_blank" rel="noopener">section 4</a>&nbsp;of Ontario’s <em>Limitations Act, 2002</em>, <a href="https://canlii.ca/t/grwhq#par53" target="_blank" rel="noopener">arguing</a>&nbsp;that MCC195’s claim should be barred for any amounts incurred two years or more before the proceedings were commenced on 15 April 2014.</p>
<p>MCC195 raised two arguments in support of its position. First, it pointed to the following <a href="https://canlii.ca/t/grwhq#par55" target="_blank" rel="noopener">provision</a>&nbsp;in its declaration:</p>
<blockquote><p><em>The failure to take action to enforce any provision contained in the Act, this declaration, the bylaws or any other rules and regulations of the corporation, irrespective of the number of violations or breaches which may occur, shall not constitute waiver of the right to do so thereafter, nor be deemed to abrogate or waive any such provision.</em></p></blockquote>
<p>In MCC195’s view, this provision was effectively an agreement recognized by <a href="https://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html#sec22subsec1" target="_blank" rel="noopener">section 22</a>&nbsp;of the <em>Limitations Act, 2002</em>, which <a href="https://canlii.ca/t/grwhq#par54" target="_blank" rel="noopener">operated</a>&nbsp;to “extend the limitation period applicable to MCC195’s claim for reimbursement of the hydro accounts.” The court rejected this argument, finding that a declaration <a href="https://canlii.ca/t/grwhq#par59" target="_blank" rel="noopener">can’t be characterized</a>&nbsp;as an agreement for this purpose.</p>
<p>MCC195 also pursued a <a href="https://canlii.ca/t/grwhq#par62" target="_blank" rel="noopener">discoverability argument</a>, arguing that it “only became aware that the hydro accounts were properly chargeable to Sunbelt in late 2013 and it has pursued its claim within the applicable limitation period.” The court <a href="https://canlii.ca/t/grwhq#par68" target="_blank" rel="noopener">accepted</a>&nbsp;this argument, finding that the condominium corporation only became aware of its rights in late 2013 after it “sought legal counsel with respect to its obligations for the hydro accounts.”</p>
<h2><strong>Responsibility to repair windows</strong></h2>
<p>The court <a href="https://canlii.ca/t/grwhq#par89" target="_blank" rel="noopener">found</a>&nbsp;that the windows were part of the condominium’s common elements. In Ontario, the obligation to repair and replace common elements and units is set out in <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec90subsec1" target="_blank" rel="noopener">section 90</a>&nbsp;of the <em>Condominium Act, 1998</em>. The court <a href="https://canlii.ca/t/grwhq#par92" target="_blank" rel="noopener">noted</a>&nbsp;that section 90 is subject to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec91" target="_blank" rel="noopener">section 91</a>, which “permits a condominium corporation in its Declaration to alter the maintenance and repair obligations after damage by providing;</p>
<ul>
<li>subject to <a href="https://www.canlii.org/en/on/laws/stat/so-1998-c-19/latest/so-1998-c-19.html#sec123subsec1" target="_blank" rel="noopener">s. 123</a>, each owner shall repair the owner’s unit after damage;</li>
<li>the owners shall maintain the common elements or any part of them;</li>
<li>each owner shall maintain and repair after damage those parts of the common elements of which the owner has the exclusive use; and</li>
<li>the corporation shall maintain the units or any part of them.”</li>
</ul>
<p>The court <a href="https://canlii.ca/t/grwhq#par93" target="_blank" rel="noopener">characterized</a>&nbsp;the effect of these statutory provisions as follows:</p>
<blockquote><p><em>the Act does not grant a condominium corporation the authority to impose on a unit owner the obligation to repair common elements after damage, except for common elements designated for the exclusive use of an owner.</em></p></blockquote>
<p>So this <a href="https://canlii.ca/t/grwhq#par96" target="_blank" rel="noopener">issue turned on</a>&nbsp;whether the declaration “properly shifted the repair after damage obligation to Sunbelt.”</p>
<p>MCC195 based its claim on a provision of the declaration that <a href="https://canlii.ca/t/grwhq#par87" target="_blank" rel="noopener">read</a>:</p>
<blockquote><p><em>the owners of the commercial units shall be solely responsible for the maintenance and repair of all windows enclosing their Units, all doors and doorframes, as well as the maintenance and repair of all glass, plastic or other material utilized in the full or partial enclosure thereof.</em></p></blockquote>
<p>The court <a href="https://canlii.ca/t/grwhq#par97" target="_blank" rel="noopener">refused</a>&nbsp;to entertain this argument, because the declaration failed to comply with certain requirements found in the act and its regulation:</p>
<blockquote><p><em>However, the Declaration does not contain a Schedule F, which is required in a Declaration where exclusive use common elements are to be specified according to s. 5 (7) of Ontario Regulation 48/01.</em></p>
<p><em>Further, there is no Part II, being an exclusive use portions survey, in the description, which according to s. 2(1)(b) and the definition is s. 1 of O. Reg 49/01 is required if the property includes exclusive use portions.</em></p></blockquote>
<p>So the court <a href="https://canlii.ca/t/grwhq#par99" target="_blank" rel="noopener">concluded</a>&nbsp;that “the windows are not common elements over which Sunbelt has exclusive use. Therefore, MCC195 has the obligation to maintain those common elements.”</p>
<h2><strong>Result</strong></h2>
<p>In the result, success was divided. The court <a href="https://canlii.ca/t/grwhq#par86" target="_blank" rel="noopener">found</a>&nbsp;that “Sunbelt is responsible for the hydro accounts servicing the commercial units. The exact amounts of that liability must now be calculated by the parties with the assistance of counsel.” And it <a href="https://canlii.ca/t/grwhq#par101" target="_blank" rel="noopener">found</a>&nbsp;that “MCC195 is responsible for the cost of the window replacement.”</p><p>The post <a href="https://www.bcli.org/ontario-superior-court-considers-cost-sharing-and-responsibility-for-repairs-in-a-mixed-use-strata/">Ontario Superior Court considers cost sharing and responsibility for repairs in a mixed-use strata</a> first appeared on <a href="https://www.bcli.org">British Columbia Law Institute</a>.</p>]]></content:encoded>
					
		
		
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