Introduction

The condominium corporation, and the community of unit holders it serves, is a microcosm of a nation. The Condominium Act is the constitution. The Declaration is the Charter of Rights. The By-laws are likened to the Acts of Parliament. The Rules are akin to subsidiary legislation. Condo fees are the equivalent of taxes. The Board of Directors of the condominium corporation (the “Board”) is the government. Board members are elected democratically in accordance with the principle of one unit holder, one vote.

Our firm is counsel to a number of Boards and property management companies. We are frequently asked to advise on matters of condominium rule enforcement. This demand for advice is the genesis of this newsletter.

The Law

The Statutory Duty to Enforce Compliance

The Condominium Act states, inter alia, that the corporation is obliged to take all reasonable steps to ensure that the owners, the occupiers of units, and the lessees of the common elements comply with the Declaration, the By-laws and the Rules (collectively, the “Constating Documents”).

(a) Regulating the Use and Occupancy of Units

The Act provides that a Declaration may include, inter alia, the following:

• Conditions or restrictions with respect to the occupation and the use of the units or common elements; and
• Conditions or restrictions with respect to gifts, leases and sales of the units and common elements.

Furthermore, the Board may enact By-laws to establish standards for the occupancy of the units of the corporation for residential purposes.

Equipped with this authority, condominium corporations can target market the community to attract a particular type of occupant (e.g. persons without pets).

Occupancy standards assist potential buyers to make informed decisions as to whether a particular condominium (i) is a good long-term investment; and (ii) can provide an environment that they are comfortable living in.

The statutory obligation to take all reasonable steps to ensure that owners / occupants comply with the provisions of the Constating Documents is one that should be taken very seriously by the Board – especially given the potentially negative impact on unit resale prices, which can arise from a failure to enforce the rules concerning occupancy standards.

Generally, tenants or buyers in the condominium resale market will not be as educated as the first generation unit holders were in respect of the rules and restrictions as to occupancy of the units. Accordingly, it is not surprising that issues of non-compliance with the Constating Documents very often arise in these contexts (e.g., tenants or buyers in the resale market may be persons with pets seeking to occupy a unit in a building restricting pets). The issue then becomes:

• What steps can the Board take to enforce the Rules and preserve the status quo?

This is not a simple issue. Indeed, the case law is rife with examples where the Court prevented the Board from enforcing clearly drafted provisions in the Constating Documents. Questions which are routinely addressed in the cases include:

• Are the restrictions contained in the By-laws consistent and/or permitted by the Declaration?
• Is the Board’s enforcement unreasonable?
• Is the restriction consistent with the Ontario Human Rights Code?
• Is this the first time the Board sought to enforce the specific provision?
• Where is the restriction contained: in the Declaration, the By-laws or the Rules?

Given the necessity to consider the above questions, it is clear that questions of rule enforceability cannot be answered in the abstract; they require a consideration of the unique circumstances of the case.

In our experience, the probability that the Courts will uphold the Board’s attempt to enforce a restriction is improved where the Board adopts the following practices:

• The Board is consistent in the enforcement of the specific provision.
• The Board provides adequate notice of the rules and restrictions to the condominium community.
• The Board has consulted with legal counsel to ensure that the provisions in the Constating Documents are effectively drafted to achieve the sought after objectives.
• The Board has stipulated in the Constating Documents that it is notified by the unit holders when they sell or rent their units.

(b) The obligation to maintain and repair units and common elements

The Condominium Act provides, inter alia, that it is the duty of the corporation to maintain the common elements, but it is the responsibility of each owner to maintain his or her unit. The obligation to maintain includes the obligation to repair after normal wear and tear; but does not include the obligation to repair after damage. The corporation shall repair the units and common elements after damage (collectively, the “General Rule”).

Notwithstanding the ease with which the General Rule can be expressed, in practice the breadth of the exceptions effectively eclipses its scope. Specifically, Section 91 of the Condominium Act provides, inter alia, that the Declaration may alter the obligation to maintain or to repair after damage, and may expressly specify that:

• Each owner shall repair the owner’s unit after damage;
• The owners shall maintain the common elements or any part of them;
• Each owner shall maintain and repair after damage those parts of the common elements of which the owner has the exclusive use; and
• The corporation shall maintain the units or any part of them.

Accordingly, the Constating Documents must be reviewed to determine whether the obligation for repair and maintenance lays with the Board or with the unit holder in any given circumstance. For example, in a case currently before the Courts, a unit owner in a high rise condominium complained of water leaking through her ceiling from the unit above. The tub and toilet in the bathroom of the unit above were malfunctioning, which produced a leak. The owner of the above unit hired a plumber. Apparently, the plumber opined that the source of the problem was a defect in the drain assembly area located beneath the unit, which was more costly to rectify. Assuming for the purpose of this newsletter that the plumber’s opinion is correct: is the owner of the unit above or the condominium corporation responsible for the cost of repairs? The unit owner, naturally, seeks to rely on the General Rule and hold that the drain assembly area is the common element, which is the duty of the condominium corporation to repair. The following matters are being considered by the Court in order to determine this issue:

• Did the Declaration alter the General Rule?
• Did the malfunctioning tub and toilet cause damage to the drain assembly area?
• Is the drain assembly area part of the unit above or the common element?
• If it is part of the common element, is it part of the common element the unit above had the exclusive use of?

Conclusion

This newsletter does not constitute legal advice. Specifically, the issues discussed herein touch on the surface of just some of the matters that can alter the rights and obligations of condominium corporations vis-à-vis unit holders in this area. Consequently, it is recommended that you consult your legal counsel if you have any questions with respect to your rights and obligations under the Condominium Act.

In the event you do not have counsel, our professionals will be pleased to discuss these and other condominium issues with you.

Brian M. Jenkins is a partner with the law firm of Keyser Mason Ball, LLP. He practices in the area of commercial litigation and condominium law. He can be reached by email at jenkins@kmblaw.com or at 905.276.0409.

Barrie R. N. Attzs is an associate with the law firm of Keyser Mason Ball, LLP. He practices in the area of commercial litigation. He can be reached by email at battzs@kmblaw.com or at 905-276-0413.