Real Estate News: Condominium Policies Can Be Valid and Enforceable If They Are Reasonable
By Maria Durdan, SimpsonWigle LAW LLP
to section 119 of the Condominium Act, 1998, a condominium, and its directors,
officers, employees, owners, occupiers of a unit and any person having an encumbrance
against a unit – must comply not only with the Condominium Act but also with
the Declaration, the By-Laws and the Rules and Regulations. In
addition, the Condominium Act includes specific sections on the process
by which a Declaration may be amended and how By-Laws and Rules and Regulations
may be made, amended, or repealed.
Condominium Act does not, however, make any reference to policies,
whether it be the process to establish a policy, the authority of a condominium
to make policies or the way policies are enforced. Despite this exclusion from
the Condominium Act, many condominiums have established policies that
provide guidance and define objectives with respect to specific subject
matters. For example, many condominiums have policies that outline procedures
and considerations relating to the hiring of employees such as superintendents,
the submission and review of human right complaints and accommodation requests
and the use, monitoring and access to the condominium’s surveillance system.
The primary purpose of these types of policies is to establish a set of
guidelines for the parties, including condominiums and owners, to follow to
achieve a desired result.
the Condominium Act does not make any reference to policies, there has
always been debate between lawyers representing condominiums and lawyers
representing prospective purchasers, owners, and tenants, as to the right of a
condominium to establish and enforce policies.
September of 2020, the Ontario Superior Court of Justice in Toronto Standard
Condominium Corporation No. 1704 v. Fraser, 2020 ONSC 5430, upheld a
condominium’s COVID-19 policy. The policy in this case prohibited anyone from
completing non-essential unit renovations and repairs during the COVID-19
importance of this case is twofold.
the case finally provides lawyers with clarity on the authority of a
condominium to establish policies and the right to enforce policies. Secondly,
condominiums now have a very practical tool when navigating timely and
challenging issues such as the risks associated with the COVID-19 pandemic and
the wellbeing of anyone attending a condominium.
Fraser, an owner wanted to make repair damage that occurred because of a
pre-COVID-19 pandemic flooding incident. The owners were unable to use the
second bedroom or ensuite bathroom. The owners did have access to another
bedroom and bathroom. The condominium passed a policy in May 2020 prohibiting
non-essential unit renovations due to the COVID-19 pandemic. The owner refused
to comply, which resulted in the condominium commencing an Application to stop
the owner’s repairs. The owner challenged the authority of the condominium to
establish the COVID-19 policy and the reasonableness of the COVID-19 policy when
the province moved into Stage 1 on May 19, 2020.
Court held that the COVID-19 policy was valid and enforceable. In coming to its
decision, the Court relied on sections 58 and 117 of the Condominium Act.
Section 58 relates to the authority to make Rules. Respectfully, I do not agree
with the Court’s review and analysis of a condominium’s authority to make Rules
under section 58 as being applicable to the COVID-19 policy (as the policy was
not passed in the same manner as a Rule). I do, however, agree with the Court’s
determination that the policy was valid and enforceable pursuant to section 117
of the Condominium Act, which prohibits any condition or activity to
exist or be carried on at the property that is likely to cause injury.
Court further held that the COVID-19 policy was well within the range of
reasonable responses to the global pandemic and that it was reasonable for the
COVID-19 policy to be maintained thereafter. The COVID-19 policy was not
absolute, it could be repealed or amended, and the serious health risks of
COVID-19 affected the reasonableness of the COVID-19 policy, which would change
from time to time.
Court is Fraser also held that, although the Province may authorize the
reopening of certain services, this does not necessarily mean that the same
guidelines must be followed by condominiums. Although this may sound like a
minor statement, its effect on condominium
communities is a great one. Throughout this year condominiums have faced many
challenges, including ensuring that common element fees continue to be paid
despite owners having lost their sources of income and completing major
construction projects during lockdown. Some challenges have been more easily
navigated than others, however, one challenge that has resulted in a lot of
discontent, confusion and anger within condominium communities is the closure
of condominium amenities, for example gyms, pools, meditation gardens.
Unfortunately, I have not been allocated enough space to go into any detail
about this issue, however, the Court in Fraser has provided us with some
very solid guidance on this matter. Specially, if the Board of Directors acts
honestly and in good faith and exercises the care, diligence, and skill that a
reasonably prudent person would exercise in comparable circumstances, the Board
has the right to decide whether to open its amenities, despite the province’s
green light to do so.
Durdan is a Partner at SimpsonWigle LAW LLP and the Chair of the Condominium
Practice Group. Maria has also obtained her Associate of Canadian Condominium
Institute (ACCI) designation in law, which recognizes that she has achieved a
high level of knowledge and skill of condominium law. Maria is the President of
the Canadian Condominium Institute – Golden Horseshoe Chapter and a Co-Chair of
the Education Committee. Maria’s practice includes advising boards of
directors, property managers and developers on all areas of condominium law.