Options for Obtaining Compliance in Condominiums
I recently participated in the Grand River Chapter of CCI’s webinar, Community and Compliance, speaking primarily about the legal options for obtaining compliance. Today, I thought I would briefly summarize those options and when each of them may be the most useful.
Condominiums have a variety of options when it comes to collecting common expense contributions from unit owners. The most used option is the lien. Section 85 of the Condominium Act, 1998, (the “Act”) gives the condominium a lien for the common expense contributions of all unit owners. The lien expires three months after the owner’s default. The condominium must register a certificate of lien before it expires. In some cases, the condominium can apply payments toward the oldest arrears and the lien deadline rolls forward each month. The lien includes the common expense arrears as well as interest, reasonable expenses, and reasonable legal costs incurred in the attempted collection of the arrears. Liens are used for most collection matters.
If a lien is not available or undesirable, the condominium has other options for collecting arrears from an owner. If the unit is leased by the owner, the condominium may be able to collect the rent from the tenant until the common expense arrears are paid in full. This process is described in section 87 of the Act. If all else fails, the condominium can use traditional means to collect arrears, such as collection agencies and court claims.
Courts & Tribunals
There are several courts and tribunals in Ontario that hear disputes condominiums may find themselves facing. For example, a condominium could have a contractual dispute with one of its service providers that would ordinarily be resolved at the Small Claims Court or Superior Court of Justice, depending on the value of the claim. Other examples include construction defect claims, negligence claims, and slip and falls. These are all typically resolved at court. Lastly, the Act provides the Superior Court of Justice has the jurisdiction to hear certain legal matters:
- To address situations where someone is causing a condition or engaging in an activity that is likely to cause damage to the property or injury to persons (s.117);
- To enforce liens with a sale or foreclosure process (s.85)
- To have an inspector (s.130) or administrator (s.131) appointed; and
- To remedy conduct that is oppressive, unfairly prejudicial, or unfairly disregards someone (s.135).
On the tribunal side, condominiums are likely to find themselves at the Condominium Authority Tribunal (CAT) at some point, which we will discuss later in this post. The Human Rights Tribunal of Ontario is another one that frequently involves disputes in condominiums, often about the condominium’s duty to accommodate an owner with a disability.
Condominium Authority Tribunal
The CAT initially opened its doors on November 1, 2017, to hear disputes about record requests by owners. On October 1, 2020, the CAT’s jurisdiction was expanded to include disputes about pets or animals, and vehicles, parking, and storage. On January 1, 2022, the jurisdiction was again expanded to include claims about nuisances, including noise, odour, light, vibrations, smoke, vapour, and other nuisances described in the declaration, by-laws, or rules of the condominium. The CAT also has the jurisdiction to hear claims about the indemnification (i.e. chargebacks) related to the matters within its jurisdiction, so a separate process is not required to collect from an owner who is not complying.
Mediation & Arbitration
Prior to the expansion of the CAT’s jurisdiction, mediation and arbitration was often used to resolve disputes involving compliance matters. While the CAT hears certain compliance matters now, mediation and arbitration is still required by the Act for the following disputes:
- By a condominium against the declarant for the first year budget deficit (s.75) or other agreements between a condominium and its declarant (s.132(2)(1));
- Between two or more condominiums about cost sharing agreements (s.132(2)(2));
- Between a condominium and its management provider (s.132(2)(3));
- Between a condominium and an owner about an agreement made under section 98; and
- Between a condominium and an owner about the declaration, by-laws, and rules where the CAT does not have jurisdiction, such as the obligations to maintain and repair the property.
Lastly, condominiums may have self help options available to them in certain circumstances. For example, condominiums can complete certain repairs or maintenance on behalf of owners if the owner has the obligation to do so and fails to do so in a reasonable amount of time. This right is set out in section 92 of the Act and most declarations. For parking disputes, condominiums could hire private companies or the local municipality (sometimes) to enforce parking on the property. Non-complying vehicles could then be ticketed and/or towed from the property. There is one caveat when it comes to self help – proceed with caution to avoid potential civil and criminal liability. It might be wise to seek legal advice before engaging in self help to ensure the condominium does not get itself into trouble.
Stay tuned. Our next post will contain some practical tips to resolving common disputes in condominiums without using any of the above processes, which can be costly and time-consuming.