Condos are Stuck Between Rock and Hard Place

A recent decision by the Condominium Authority Tribunal highlights the difficult position that condominium corporations in Ontario are being placed in.  As this author has pointed out previously (here), the CAT’s default presumption against awarding legal costs to the successful litigant ends up forcing condominium corporations into a catch-22:

• If the condo pursues a CAT Application against the violator, the condo has no guarantee of recouping its legal costs;
• But if the condo does not enforce against the violator, then the condo could get sued by the victim and then be out-of-pocket anyway for the victim’s monetary damages, the victim’s legal fees, and/or the condo’s legal fees to defend against the victim’s lawsuit.

Furthermore, the CAT’s owner-friendly decisions in the past have paralyzed condo corporations into inaction.  With all of those landmines out there for the Tribunal to seize upon as a potential misstep by the condo corporation, it is not surprising to see so many condo corporations decide to simply refrain from enforcing at all.

The condo corporation might choose not to enforce against a violator, because the Board is fearful of looking too heavy-handed against an individual (e.g. in Denize, the CAT found that the condo took an overly heavy-handed approach to enforcement against the purported smoker).  Or the condo corporation might choose not to enforce, because the Board does not want to expose the condo to an adverse costs award, which could be several thousands of dollars (e.g. in Tamhane, the CAT ordered the condo to pay $9.401.24 to the dog-owning tenant for his legal costs, and that was only 60% of the tenant’s legal costs).  Or the condo corporation might choose not to enforce, simply because it does not have the budgeted funds to spend on legal fees that fiscal year (an unfortunate reality these days, with the costs of living increasing).

The recent CAT case of Manna v. York Condominium Corporation No. 62, 2023 ONCAT 24 (“Manna”) highlights that if the condo corporation fails to enforce against violations of its Rules, then 1 zealous unit owner can use the online CAT to overturn a Board’s decisions to enforce or not enforce against violators.  But the Manna case also demonstrates that the CAT’s own published decisions to date might be what is causing enforcement paralysis across condo communities in Ontario.

YCC 62’s Rules about Underground Parking, Visitors Parking

In Manna, the unit owner represented herself, and was a former Board member until her resignation in 2018.  The 110-unit condo corporation (“YCC 62”) was defended in the CAT by a condominium lawyer, and managed by a licensed Condominium Manager. 

Ms. Manna complained about the Board not enforcing its Rules regarding parking, in the underground parking garage and the aboveground Visitors Parking.  According to her, there was a dusty, unlicensed blue SUV that belonged to a tenant of a Board member, which parked in the underground garage – in violation of the Rule against unlicensed vehicles – and parked in the aboveground Visitors Parking lot – in violation of the Rule against residents parking in the Visitors Parking.

YCC 62 retained a parking enforcement company, but Ms. Manna alleged that the parking company was not properly enforcing the Visitors Parking Rule against residents.  YCC 62 argued that it was using its reasonable discretion to enforce the Rules regarding parking appropriately.

The CAT ruled that YCC 62 had failed to properly enforce the mandatory Rule against unlicensed vehicles in the underground garage, and that YCC 62 must enforce the Visitors Parking Rule against residents going forward.

But perhaps there were other circumstances fueling YCC 62’s choices on how to govern its own community.  Perhaps YCC 62 was afraid of enforcing against the resident’s blue SUV parking in the Visitors Parking, because of the CAT’s decision in Boodram, where the CAT ruled that the condo corporation should not be enforcing its visitors parking restrictions against a Honda CRV.  Perhaps YCC 62 was afraid of enforcing against the unlicensed blue SUV parking in the underground parking garage, because of the CAT’s decision in Douglas, where the CAT ordered the condo corporation to pay $2,524.47 to the unit owner for the condo’s improper enforcement against a tenant’s commercial-use vehicle.  In both Boodram and Douglas, the condo corporations thought that they were reasonably enforcing against violations in their own communities, but the CAT ultimately did not support their enforcement efforts and instead, ordered the condo corporations to pay.

YCC 62’s Rules about Balcony Storage, Underground Storage

Ms. Manna also complained that YCC 62 was not properly enforcing its Rules regarding storage on balconies, which should be limited to only seasonal furniture.  Ms. Manna alleged that there were flower boxes on railings, bicycles protruding over the balconies, and non-seasonal items being stored on balconies.

Even though YCC 62 argued that the flower boxes were properly secured and do not cause a hazard – and Ms. Manna apparently did not even raise this issue with YCC 62 prior to commencing her CAT Application – the CAT ruled that YCC 62 has failed to enforce the prohibition against flower boxes attached to the balcony railing.

Even though YCC 62 argued that there had been no complaints about the two balconies with bicycles stored on them, the CAT ruled that YCC 62 had failed to enforce the prohibition against bicycles protruding over the boundaries of the balcony.

Even though Ms. Manna only produced evidence of non-seasonal storage on one balcony occupied by a “long-standing owner”, the CAT ruled that YCC 62 must enforce against such non-seasonal furniture storage.

But perhaps YCC 62 was afraid of enforcing against the balcony flower boxes, because of how unwieldy legal costs can become.  Although our firm was ultimately successful in enforcing against a $763 flower box in Ottawa, the years-long saga cost more than $109,000 in legal fees for the condo corporation (which the condo recovered by selling the violator’s unit). 

Maybe YCC 62 was afraid of enforcing against the bicycles protruding outside of the balconies, because the CAT has previously held that a large pickup truck protruding over the boundaries of a parking space by several centimeters is acceptable, even if the truck did not perfectly fit within the boundaries.

Perhaps YCC 62 was afraid of enforcing against the storage of non-seasonal furniture on the balcony, because in Sarros the CAT did not award the successful condo corporation with any of its legal costs, despite being successful on the merits of what constitutes “seasonal furniture”.[1] 

Ms. Manna had further complaints about improper storage in the underground garage, including some personal items and furniture belonging to a Board member’s husband which purportedly blocked access to her own storage unit.  Ms. Manna threatened to call the City fire inspector, but YCC 62 did not respond to her complaints.  The CAT found that Ms. Manna raised important safety concerns, and ordered YCC 62 to not only enforce its Rules regarding proper storage, but also to explain in writing to Ms. Manna what enforcement actions it has taken.

But perhaps YCC 62 did not respond to Ms. Manna due to concerns about the privacy of other unit owners or residents, and/or due to her stated threat to go to the City fire inspector which could result in charges being laid (and litigated) against YCC 62.  Maybe YCC 62 did actually take steps to ensure that the Fire Code was not breached – but YCC 62 simply never told Ms. Manna about such steps being taken, since as a unit owner Ms. Manna does not have the right to information about the enforcement steps that a condo corporation has taken against another unit owner.

Takeaway for Condos: Review Your Rules

The CAT itself noted in Manna, at paragraph 66:

“ … several of YCC 62’s rules appear to be unhelpful, outdated, and difficult to enforce fairly and consistently. It is strongly recommended that YCC 62 undertake a review of its rules and either amend them or create more suitable ones, following the procedures set out in s. 58 of the Act.”

This advice is generally applicable to condominium corporations throughout Ontario.  Condo corporations should review their Rules periodically; if you have outdated Rules that are no longer enforced, delete them from the Rules.  Otherwise, Section 17(3) of the Condominium Act obligates the condo corporation to take all reasonable steps to enforce those Rules, even if they are outdated or should have been deleted previously.

With a wholly-online CAT where a unit owner only needs an Internet connection and a $25 initial filing fee to bring a CAT Application against their condo corporation, a condo corporation with a multitude of not-enforced Rules on its books is inviting trouble.  And with the CAT’s default no-costs presumption, even if the condo corporation is successful in defending against the disgruntled unit owner’s CAT Application, the condo corporation is likely going to be out-of-pocket for any of its legal costs incurred in its defence.

Tackling the Housing Affordability Crisis Requires Costs Recovery

Manna highlights the difficult position that condo corporations in Ontario are put into, when faced with a non-compliance situation.  In view of the CAT decisions to date where the CAT has not only refused to uphold the condo corporation’s enforcement efforts against a violator but has even penalized the condo corporation with monetary consequences, condo Boards are understandably reluctant to pursue enforcement against an individual’s non-compliance.  This enforcement paralysis is untenable in the long run, and as one respected jurist noted, will lead to “chaos” in condo communities.

Even where the CAT has, on the merits, upheld the condo corporation’s enforcement efforts, the CAT’s default no-costs presumption has forced condo corporations to shoulder the financial burden of a violator’s non-compliance.  This hidden downloading, or further taxation, of “innocent” condo unit owners in Ontario exacerbates the existing affordability crisis in condo communities. 

If the province is serious about tackling the housing crisis in Ontario and wants to push the “missing middle” type of housing which includes small condo corporations, then it must foster an environment where prospective homeowners are not required to interview each and every single neighbour in the building before buying into it, out of fear that one day, one of those neighbours (or a future neighbour who moves in afterwards) might violate a Rule and then the condo corporation is compelled to enforce, with all of the legal costs being downloaded onto the non-defaulting owners.

Eliminating, or at least significantly scaling-back, the CAT’s default no-costs presumption would be a start.