Ontario Condo Law Blog

New legislative framework for suite metering

Chris Jaglowitz — Mon, 08 Feb 2010 07:31:37 -0500

People trying to keep tabs on the legislative authority for suite submetering can’t even blink these days without the risk of being left in the dark!

On December 8, 2009, the Ontario Government tabled Bill 235, an Act to enact the Energy Consumer Protection Act, 2009 and to amend other Acts.

If passed, Bill 235 will, among other things, repeal section 53.17 of the Electricity Act, 1998, which is the current authority for condominium boards to install smart meters and download electricity costs to individual unit owners. An entirely new section dealing with submetering and billing in multi-unit residential buildings will be passed, as well as a whole raft of regulations.

As with all recent energy and environmental initiatives, Bill 235 is expected to move forward quickly. Comments were to have been received by February 6, 2010. The public consultation page is here, with links to additional information. The actual wording of the Bill and its legislative status is found here.

Condo lien is not slander of title when the owner is in arrears

Chris Jaglowitz — Tue, 02 Feb 2010 03:54:49 -0500

The Ontario Superior Court of Justice recently confirmed the simple notion that a condominium lien is not slander of title where the unit owner is in arrears of common expenses at the time the certificate of lien is registered on title.

The following portion of Madam Justice Low’s decision in Jeffers v. YCC 98, 2010 ONSC 474 (CanLII) is instructive:

[52] I turn now to the plaintiffs' claim against the Condo Corporation. The plaintiffs claim damages for slander of title and for property damage.

[53] The plaintiffs allege that the registration by the Condo Corporation of a notice of lien for $967 on November 22, 2005 was a slander of title.

[54] The elements of the tort of slander of title are:

(a) that the party registering the offending instrument published words in disparagement of the complaining party's property;

(b) that such words were false;

(c) that the words were published with actual malice in that the words were published with the direct objective of causing damage;

(d) that the complaining party has sustained special damages as a result.

[55] The onus of showing that the statement was false rests on the plaintiffs.

[56] The plaintiffs have not met the onus of showing that the Condo Corporation made a false statement.

After reciting the relevant evidence as to the debits and credits, Her Honour found that the unit owners were clearly in arrears of common expenses at the time the lien was registered. She then went on to say:

[72] I find that the plaintiffs have not met the onus of proof of showing that the notice of lien was false. There is no need to deal with the other elements of the cause of action. I find that the claim for damages for slander of title fails.

Justice Low then dismissed the claim for slander of title, as well as an unrelated claim over property damage. She further dismissed the unit owners’ claims against their bank over the amount owing on their mortgage.

Because they were completely successful at trial, the condo corporation and the bank were each awarded part of their legal costs. The plaintiffs (who represented themselves in the lawsuit) were ordered to pay costs of $20,000 to each defendant, representing about half of the total costs paid. In reaching her decision about the precise amount of the costs to be paid, Her Honour considered that:

The plaintiffs appear genuinely, although mistakenly, to believe that they have been treated oppressively. On the evidence before the court however, it is apparent that the plaintiffs have been the authors of their own misfortunes through their failure to appreciate the consequences of and to take responsibility for their actions and inactions, their failure to appreciate that their litigation conduct was increasing the costs which might be awarded against them, and their apparent unwillingness to take legal advice.

This observation is strikingly familiar to us condo lawyers because it accurately describes the situation in most lawsuits brought by unrepresented unit owners against their condo corporations. The outcome of those sorts of lawsuits is invariably bad, with serious financial consequences both for the unit owner plaintiffs and the defendant condominium corporations.

Unit owners with a problem with their condominium corporation should get legal advice as to whether they have a case before they start a lawsuit. They should then follow their lawyer's advice.

Talking back - employers' vicarious liability

Chris Jaglowitz — Thu, 28 Jan 2010 07:07:34 -0500

Bob Gardiner reminds us that the grace period for the ban on hand-held devices while driving is coming to an end.

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Now it is illegal for drivers to talk, text, type, dial or e-mail using Blackberrys, cellphones and similar hand-held devices.

Bill 118, the Countering Distracted Driving and Promoting Green Transportation Act, promoted by the Ministry of Transportation, took effect on October 26, 2009. A three-month probationary educational period will end February 1, 2010, when police will begin issuing tickets to offenders, resulting in fines of up to $500.

Employers, such as property management companies, could be held vicariously liable for payment of fines or damages arising from an injury or accident deemed to have been caused by an employee’s inattention to driving while manipulating a hand-held device. It is recommended that employers issue the company’s no hand-held policy to employees prohibiting use of hand-held devices while employees drive a car, except in accordance with permitted hands-free technology such as Bluetooth. It is expected that if a driver involved in an accident was found to be using a hand-held device at the time of a collision, such unlawful use may more likely be deemed to be the cause of an accident and possibly result in a higher award of damages against such a driver and employer. Delivery of a no hand-held policy to employees should exempt employers from vicarious liability.

Studies indicate that drivers using cellphones are four times more likely to crash, while those texting messages may be the cause of approximately 20% of all collisions. Ontario has joined 50 other countries and several Canadian provinces which enforce rules against driving while using a hand-held device.

Drivers who need to gab while driving will still be entitled to use hands-free technology such as can be provided by various Bluetooth devices. Choose systems which allow vocal dialing or speed-dialing of your favorite numbers.

Firefighters, paramedics, police and drivers dialing 911 will be excepted from enforcement of that law. Regulations dealing with other exempted cell phone scenarios are also being enacted.

Best of the blogosphere for December 2009

Chris Jaglowitz — Wed, 27 Jan 2010 10:13:50 -0500

With the twenty-tens now well underway, let’s look back at some of the best of the condo-related blogosphere for the last month of the “aughts.”

New Year Resolutions for Boards – Colorado lawyer Molly Foley-Healy of the HOA Legi-Slate blog suggests three new years’ resolutions that any condo or HOA board should make. It’s not too late!

10 Tough Questions with Herman Turkstra - The Hamiltonian blog picks the brain of local institution, lawyer and former politician Herman Turkstra on Steeltown’s successes, failures and future.

How Much Are My Condo Fees Per Square Foot? – In a recently-launched blog called It’s a Condo Life, Oshawa property manager Tracey McLellan shines some light on how comparing common expenses of different buildings can be confusing.

Enforcing CC&Rs Through Electronic Surveillance -- Daniel Zimberoff of the Northwest Condo & HOA Law Blog suggests that better surveillance may lead to better compliance with covenants, conditions and restrictions and can simplify rule enforcement cases.

Condominium corporation approval for hot tub not needed? -- Toronto Lawyer and blogger James Morton shows us the guts of the Ontario Court of Appeal’s decision in the famous hot tub case of 2009, WCC 198 v. McMahon.

Well... Everyone Knows It: The Testimony of a Mold Expert -- Mark Wiechnik of Stark & Stark’s New Jersey Law Blog takes on the popular conception that toxic mould causes serious health issues in humans. Judging from the number of lawsuits, mould seems like the bogeyman of our time, notwithstanding that the link between mould and harm to human health is far from clear. A provocative piece.

How To Enforce Civil Judgments in Ontario – If you ever wanted to learn about how we turn a court order into money in the bank, see this entry by Toronto insurance lawyer Pamela Pengelly on her Res Ipsa Loquitor blog.

Microblog posts to 1/26/2010

Chris Jaglowitz — Tue, 26 Jan 2010 15:18:48 -0500

Here is a sampling of the recent posts on our microblog:

Lincoln Hobbs on this years' top condo/HOA cases at US College of Community Ass'n Lawyers ' annual law conference - http://bit.ly/7gPi6n

RT @canetwork: NY: Condo complex fined $10,000 for barring mezuzah - http://bit.ly/8NhaGi

RT @CondoVultures: Banks seize 30,000 South Florida properties In 2009, according to CondoVultures.com - http://tinyurl.com/yzg4bsg

Audrey Loeb speaks to Law Times about recent ONCA decision in “hot tub case” known as WCC 198 v McMahon - http://bit.ly/6qrZAK

Ottawa Citizen: Condos give homeless hope - Mental health association comes to the rescue - http://bit.ly/6tXO6v

D.C. condo unit owner wins [settles?] court battle with smoker next door - http://bit.ly/6i8VAg

Ottawa Citizen: Condo mgmt demands removal of big snow fort built by unit owner for his kids in his front yard - http://bit.ly/4sGvA5

More pics of massive snow fort on front yard of Ottawa townhouse condo illustrates safety hazard - http://bit.ly/939xCQ Cool fort, though!

DC Real Estate Guide writes on the pros of joining your condo board - http://bit.ly/4oaeft - and also the cons - http://bit.ly/6tmyWx

ONCA: Condo corp's insurance doesn't cover replacement of poorly-designed standpipe system - http://bit.ly/4QeBtM

Before you buy Florida condos in distressed neighbourhoods, take note: RT @canetwork: With foreclosure comes crime - http://bit.ly/831NPS

Barrie (ON) Examiner reports on condo development trends in that town: "Condo owners living the high life" - http://bit.ly/5QXy3R

Costs to soar as aging Canadians face rising tide of dementia - Globe and Mail: http://bit.ly/5ZfUuJ - How about cost to condo corporations?

New Brunswick to ring in the new year with a new Condominium Property Act - http://bit.ly/5OH5fu

Learn more about the microblog here, or follow me on Twitter - @chrisjaglowitz - to get live updates.

Protect your condominium community against fraud

Chris Jaglowitz — Sat, 16 Jan 2010 12:10:49 -0500

The following guest post is by Athena Mailloux, a fraud examiner at ZAP Consulting Limited. Athena shares some practical solutions to help condo directors keep their new years’ resolution to be vigilant against fraud.

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Whether you are a large business corporation or a sole proprietorship you can never be too cautious when it comes to protecting against fraud. Condominium corporations have no less of a responsibility in protecting against fraud than a publicly traded company. In fact, condo corporations are often relatively small, close-knit communities that may lack stringent internal controls and thus be more susceptible to fraud.

Organizations such as condo corporations need to be even more vigilant for deception and fraud in the wake of the recent economic downturn. A Google search for “condo fraud” returns an almost endless list of fraud instances in condo communities, many of which could have been prevented by simple due diligence and good corporate governance. The fraud instances listed range from fabricating invoices for maintenance and repair work to illegally selling parking spaces and misappropriating trust funds. Frauds were committed by employees, members of the board of directors as well as vendors taking advantage of an opportunity to defraud the condo corporation.

It is important to remember that the cost of protecting against fraud often outweighs the damage resulting from it. For example, it typically costs less than $100 to obtain a background check (with consent) on a potential employee, member of the board of directors or vendor, whereas the damage done by a fraudulent employee, director or vendor may far exceed that amount.

The following simple, cost-effective internal controls can go a long way in protecting your condo community from fraud.

Accounting and Finance

1. Use a secure, password-protected accounting system to track transactions. This type of software can be purchased off the shelf at any retail office supply store. The corporate auditor should be the only one with the “accountant” password.

2. Set up all corporate financial accounts to require two signatures for all transactions including cheques. Often it is wise to have one of the signing authorities be a board member and the other the property manager.

3. Cheques used by the corporation should be of the pre-numbered variety. Cheques should be locked away when not in use.

4. Wherever possible expenses should be paid for by cheque.

5. Avoid issuing corporate credit cards. If corporate credit cards are in use, carefully scrutinize each transaction on credit card statements.

6. Depending on how active your condo corporation is, set up a policy that all cash transactions (no matter how small) must be recorded daily and deposited either daily or weekly.

7. Keep a petty cash amount on hand for emergencies. Often less than $50 is sufficient. Track all usage of these funds through “petty cash slips”.

8. Any investments of corporate funds should be made through a reputable and licensed broker. All investments should be purchased in the name and address of the condo corporation only and no other names should appear on the instrument.

9. Financial statements should be presented to the board of directors on a monthly basis. It is the responsibility of the board to satisfy themselves that the statements accurately reflect the condo corporation’s financial status.

Hiring and Contracting Process

Ensure that you have a competitive hiring process in place. Interview or invite bids from at least three separate people or corporations. Once you have narrowed down the selection process to the three top candidates, get their consent (in writing) to perform a due diligence check, which may include any or all of the following:

Criminal background check
Credit check
Previous work experience
Reference(s)
Driver’s License Verification
Any other type of due diligence that may be required.

Insurance

The condo corporation and its manager should have adequate fidelity insurance policies in place that cover all employees, management and the board of directors. What counts as adequate insurance may be debatable, but a good rule of thumb is to insure at least up to the value of all funds and assets that could be at risk. Obtain legal and financial advice to make sure the condo corporation has proper coverage.

Be Proactive

Adequate measures to prevent and protect against fraud are essential for every organization, including condo corporations. Failure to have such measures in place can lead to disastrous consequences and potentially huge losses for your condo community. The benefits of adequate protection against fraud far outweigh the costs.

Alberta case affirms powers of condo board

Chris Jaglowitz — Mon, 04 Jan 2010 07:44:20 -0500

A February 2009 decision of the Alberta Court of Queen’s Bench should be added to the list of notable condo cases for 2009. Check out Dykun v. Cravenbrook Condominium Corporation No. 032 1893.

After changing managers on December 1, 2007, the condominium’s board discovered that the previous manager had improperly withdrawn money from the reserve fund to pay operating expenses, leaving the corporation on the brink of insolvency.

Two months later, the board announced that it was levying a special assessment to raise the money necessary for the corporation to continue operating and to replenish the reserve fund.

One unit owner fought tooth and nail to resist paying his $800 share of the $80,000 special assessment. He brought an application against the board and argued that the corporation should have exhausted alternative options before it levied the special assessment. The owner presented one alternative strategy and asked the court to set aside the board’s decision and to implement his suggested strategy.

In dismissing the application, the court found that the board had acted prudently and responsibly in asking and following the advice of the corporation’s solicitors and auditors to levy the special assessment. The court did not agree with this unit owner’s proposed strategy and went on to say:

Even assuming that Mr. Dykun’s solution was an appropriate one, he cannot force his views on the Board of Directors. Management of the affairs of Cravenbrook rests with the board and not with any single unit owner. The Board has been properly elected to oversee Cravenbrook’s affairs. Mr. Dykun has not. Mr. Dykun cannot dictate to the board the course of action that they should be following. If he is interested in having a greater say in how the overall affairs of Cravenbrook should be managed, he should seek election to the board of directors.

This approach seems like a good answer to cases where owners look to second-guess decisions of the elected board. The decision in this case further affirms the concept that the board has the final say in managing the corporation’s business, whether in budgetary matters or in selecting the colour scheme for the corridor refurbishment project.

What do you think?

Top 10 condo law cases of 2009

Chris Jaglowitz — Thu, 31 Dec 2009 12:20:56 -0500

As 2009 drifts into the history books, we look back at some of the notable condo law decisions made by Ontario courts and tribunals in the year gone by.

Here are ten of them, in no particular order. Click the bolded case names to view full text decisions at Canadian Legal Information Institute ("CanLII").

#1 - Nipissing Condominium Corporation No. 4 v. Kilfoyl, 2009 CanLII 46654 (ON S.C.)
Corporation obtains a compliance order against owners operating a boarding house in violation of the “single family residence” provision in the declaration. The owners unsuccessfully claim that the case must first be mediated/arbitrated (as per Condo Act s. 134(2)), and that the single family use provision violates the Human Rights Code. The case is now under appeal.

#2 - Metropolitan Toronto Condominium Corporation No. 1250 v. Mastercraft Group Inc, 2009 ONCA 584 (CanLII)
The Court of Appeal makes important rulings on the following interesting issues in this nightmare case over a conversion building:

When does a subsequent landowner become a “declarant”
Whether fixtures can be separated from common elements by the declarant and then leased to the condo corporation
What factors must be considered in determining whether a construction warranty is breached.
Whether the right to rent a parking spot is an easement appurtenant to each residential unit

Application for leave to appeal this case has been made to the Supreme Court of Canada [and dismissed].

#3 - Carleton Condominium Corporation No. 26 v. Unit Owners, 2009 CanLII 22548 (ON S.C.) Condo successfully applies to amend its declaration in order to fix inconsistencies over the maintenance/repair obligations and boundaries of the units. Good discussion about Condo Act sections 107 and 109 and about how to properly set the stage for bringing such an application.

#4 - Ottawa-Carleton Standard Condominium Corporation No. 650 v. Claridge Homes Corporation, 2009 CanLII 25983 (ON S.C.)
Court rules that a condo corporation can sue Tarion for payment out of the guarantee fund for construction deficiencies, and that the claim against Tarion can be made with or without the declarant. Filing the performance audit under Condo Act section 44 is the only prerequisite.

#5 - 1240233 Ontario Inc. v. York Region Condominium Corporation No. 852, 2009 CanLII 1 (ON S.C.)
In this case about a shopping mall converted to a commercial condominium corporation, a unit owner applied unsuccessfully for an oppression remedy when asked to contribute to the mall’s promotional fund. The court found that the corporation can spend money from the common expenses fund on promotions and marketing. Such expenditures are consistent with the duty to manage and administer the corporation.

#6 - Wentworth Condominium Corporation No. 198 v. McMahon, 2009 ONCA 870 (CanLII)
The central issue was the meaning of the words “addition,” “alteration” and “improvement” as in Condo Act section 98. The Court of Appeal upheld the trial judge’s ruling that installing a hot tub is not an addition, alteration or improvement to the common elements. The court pointed out that some cases may require a different approach and that each case must be considered individually.

#7 - McMillan v. Bruce Condominium Corporation No. 6, 2009 HRTO 878 (CanLII)
The Human Rights Tribunal dismissed an owner’s complaint that the corporation violated the Human Rights Code by requiring the owner to pay the cost of modifying the common element stairway to his townhouse in order to accommodate his disability. See our case comment here.

#8 - DiSalvo v. Halton Condominium Corporation No. 186, 2009 HRTO 2120 (CanLII)
The Human Rights Tribunal ordered a condo corporation to install and pay for a modification to an owner’s exclusive use common elements in order to accommodate that owner’s disability, quite contrary to the ruling in McMillan v. BCC 6, above. The tribunal also fined the corporation $12,000 on the basis that the corporation violated the owner’s human rights in poorly handling the owner’s request for accommodation. This December 2009 case will get close review and further comment in the weeks ahead.

#9 - Metropolitan Toronto Condominium Corporation 626 v. Bloor/Avenue Road Investment Inc., 2009 CanLII 44718 (ON S.C.)
Interesting municipal law case about a mixed-use complex with shared parking and a screwy site plan agreement and zoning by-law. When the parking lot owner jacks up the parking rates, the residential condo owners sue for a declaration that a certain number of the spots are allocated to them. The court disagreed.

#10 - Metropolitan Toronto Condominium Corporation No. 932 v. Lahrkamp, 2009 ONCA 362 (CanLII)
A unit owner who made incessant requests for records and harassed board and management staff was ordered by the Superior Court to stay away from the management office and to follow a special procedure for requesting records. On appeal, the Court of Appeal set aside the restraining order as being too extreme for these circumstances but affirmed the rest of the order. We commented on the original decision here.

One decision from late December 2008 also deserves mention.

Metropolitan Toronto Condominium Corporation No. 946 v. J.V.M., 2008 CanLII 69581 (ON S.C.)
Condo corporation obtains a court order to sell a unit owned and occupied by a person with mental health issues who had breached previous court orders requiring the owner to rectify unsafe and unsanitary conditions. Court found that the corporation had done its best to accommodate the owner’s disability.

Did we miss any cases that you would include in this list? Let us know!

Thanks for following our blog this year. All the best for 2010.

Microblog posts to 12/27/09

Chris Jaglowitz — Sun, 27 Dec 2009 13:38:08 -0500

Here are some of the postings from our microblog over the past month.

RT @Assocpropmgt: Ancient Homeowner Association Rules from Smithsonian Magazine - http://bit.ly/4LGNGE

Innisfil (Ont) Journal: Big Bay Point Resort seeks conversion to special act corp; more “flexible” than condo corp - http://bit.ly/8S33sA

RT @habitatmag: Co-op / Condo Boards: An expert reveals: The Top 15 Mistakes New Board Members Make - http://tinyurl.com/yhye4dx

RT @ColoradoHOAGal: RT @tedleew: "Top 7 insane homeowners association rules - THE WEEK" http://j.mp/4wLhnD

Ont. Human Rights Legal Support Centre reports on "ground-breaking legal victory" for disabled condo unit owners - http://bit.ly/5MlI0l

Toronto Globe and Mail: Queen's Park vista threatened by condo plan - http://tgam.ca/FUL

RT @canetwork: FL: HOA Prez choked by resident over Christmas light dispute http://bit.ly/82aZbs

ONCA: Installation of outdoor hot tub is not an “addition, alteration or improvement” under s. 98 of Ont. Condo Act - http://bit.ly/7eaNsM

RT @HOA_Lawyer: HOA director apologizes for giving man "the finger" at owners meeting. She's also an etiquette coach! - http://bit.ly/4IR7Jg

HUD charges Massachusetts condo bd and mgmt co. for discriminating against families with children - http://bit.ly/7AioLc

RT @nicolebreskin: $2.1 million Tribeca condo owner to sue neighbor over secondhand smoke - http://bit.ly/7KTpeq

Biscayne Times: Condo Life-Luxurious Comfort or Relentless Conflict? - http://bit.ly/6Nwd1y - Bizarre tale of Miami development gone bad.

Anon. Chicago lawyer: HOAs that ask war vets to remove flags are "a good reason why my kids will go to college." - http://bit.ly/7FcD2R

National Post: City of Toronto orders condo developers to buy annual metropass for every unit: http://bit.ly/6615FT Neat idea!

Learn more about the microblog here, then follow me on Twitter - @chrisjaglowitz.

Further amendment to Condo Act increases choice for investing condo funds

Chris Jaglowitz — Wed, 23 Dec 2009 11:29:24 -0500

Another small amendment to our Condo Act came into force on December 15, 2009, this time by virtue of Bill 218, the Ontario Tax Plan for More Jobs and Growth Act, 2009.

Clause (b) of the definition of "eligible security" in subsection 115(5) of the Condominium Act, 1998 is amended to include certain financial instruments issued by institutions located in Ontario insured by the Deposit Insurance Corporation of Ontario ("DICO").

Subsection 115(5) now reads as follows (with amendment underlined):

Definition

(5) In subsections (6) and (7),

“eligible security” means a bond, debenture, guaranteed investment certificate, deposit receipt, deposit note, certificate of deposit, term deposit or other similar instrument that,

(a) is issued or guaranteed by the government of Canada or the government of any province of Canada,

(b) is issued by an institution located in Ontario insured by the Canada Deposit Insurance Corporation or the Deposit Insurance Corporation of Ontario, or

(c) is a security of a prescribed class.

In practical terms, this amendment allows condominium corporations to purchase investments issued by credit unions or caisses populaires that are located in Ontario and are insured by DICO. This effectively destroys the monopoly enjoyed until now by CDIC-insured banks and trust companies and provides greater choice of investment products and providers.

A list of CDIC-insured institutions is here. A list of DICO-insured institutions is here.

Condominium corporations that are unhappy with the investment choices offered by their banks now have more flexibility as to where to purchase investments. This provides considerably more leverage when negotiating rates and terms. Choice is good.

Condo Act amended slightly by omnibus bill

Chris Jaglowitz — Mon, 21 Dec 2009 11:18:14 -0500

The Ontario Legislature passed Bill 212, the Good Government Act, 2009 on December 3, 2009. The bill received Royal Assent with very little fanfare on December 15, 2009 and is now law.

This omnibus bill is intended to modernize statutes by correcting errors and plugging loopholes. It also does the following things:

makes minor amendments to almost every Ontario statute, mostly by updating language and terminology
repeals a few outdated or ineffective statutes
makes significant improvements to the City of Toronto Act, 2006 and the Municipal Elections Act
legalizes the until-recently covert process of conducting criminal records checks on jurors
replaces the old Public Inquiries Act with a new one

The bill also makes three minor amendments to the Condominium Act, 1998 and a few small consequential changes to related statutes. Here is a brief description of the changes:

Qualifications of Directors

Clause 29 (1) (c) of the Condominium Act, 1998 is amended by striking out "a mentally incompetent person" and replacing that with "incapable of managing property within the meaning of the Substitute Decisions Act, 1992".

Clause 29 (2) (a) is amended by striking out "a mentally incompetent person" and replacing that with "incapable of managing property within the meaning of the Substitute Decisions Act, 1992".

The words “mentally incompetent” are being phased out of all Ontario legislation in favour of the more precise definition provided in section 6 of the Substitute Decisions Act, 1992, as follows:

Incapacity to manage property

6. A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

The Substitute Decisions Act also provides for a court to order a person to be assessed and for a guardian to be appointed to administer an incapable person's property.

Powers of an Inspector

With the repeal and replacement of the Public Inquiries Act, subsection 130 (3) of the Condominium Act, 1998 is repealed and replaced. Here's the original s. 130(3):

Powers of inspector

(3) The inspector shall have the powers of a commission under Part II of the Public Inquiries Act that the order states and when the inspector exercises those powers, that Part applies to the inspector’s investigation or audit as if it were an inquiry under that Act.

And here is the new one, to come into force on a day to be proclaimed:

Application of Public Inquiries Act, 2009

(3) Those provisions of section 32 of the Public Inquiries Act, 2009 that the order states apply to the inspector's investigation or audit.

While this new wording may appear to reduce the clarity of the earlier wording as to an inspector’s powers, the new wording still allows a court to pick and choose the powers granted to an inspector and also the protections afforded to witnesses that give evidence during the course of the inspector’s investigation or audit.

As always, great care must be exercised in drafting the court order appointing an inspector. A poorly-drafted order may leave the inspector with insufficient power to complete the assigned duty and witnesses lacking the maximum protection from reprisal by employers or others for making representations or giving evidence in an inquiry.

Creation of Common Elements Condo Corporations

For the creation of common elements condominium corporations, the following minor amendment clarifies the reference to the now-repealed Certification of Titles Act:

Subclause 139 (1) (a) (iii) of the Condominium Act, 1998 is amended by adding "as that Act read immediately before subsection 2 (1) of Schedule 17 to the Good Government Act, 2009 came into force" after "the Certification of Titles Act".

This amendment, which is now effective, has no bearing on existing common elements condominiums.

Reference in other statutes

Both the Land Titles Act and the Registry Act are amended by striking out "the Condominium Act" wherever it appears and substituting "the Condominium Act, 1998 or a predecessor of that Act". Other minor modifications are made as to the powers of the Director of Titles and in respect of registering a condominium declaration on title to certain lands.

Check it out

Most of the amendments described above came into force on December 15, 2009 when the bill received Royal Assent. The changes related to the Public Inquiries Act will come into force on a day to be proclaimed.

The most current version of the Condo Act and any Ontario statute can always found on the government's e-Laws website. Because of the vast number of statutes amended by Bill 212, however, it will likely take a few more days until all statutes are updated.

For more details on Bill 212, see the legislative notes and complete bill here and see the government's news release here.

Court of Appeal smokes the "private club" defence

Chris Jaglowitz — Mon, 14 Dec 2009 15:36:50 -0500

Anyone still trying to circumvent Ontario’s anti-smoking laws by operating as a “private club” should consider this recent advice from our Court of Appeal: Don’t bother.

In Kennedy v. Leeds, Grenville and Lanark District Health Unit, 2009 ONCA 685 (CanLII), the court upheld convictions against the operator of a Smith Falls sports bar who tried to operate the place as a private club. “Members” paid monthly dues of $4.00 and submitted application forms saying that they didn’t mind second-hand smoke. The “club” was reported as having more than 500 members.

The local health unit received a complaint in September 2006 and sent an inspector to investigate. He found no “no smoking signs” and found ashtrays on tables and saw patrons smoking in the place. The proprietor then tried to bar the inspector from making further entry and was himself observed walking out of the place while holding lighted tobacco. This led to the proprietor being charged with a number of offences under the Smoke-Free Ontario Act (“SFOA”).

The SFOA came into force in May 2006. It prohibits, among other things, people from smoking or holding lighted tobacco in “an enclosed public place.” It also requires the proprietor of “an enclosed public place” to post “no smoking” signs, remove ashtrays, warn and then eject violators, and so forth.

After a trial before a justice of the peace, the proprietor was convicted on all counts. The central issue at trial was whether the proprietor’s bar constituted “an enclosed public place.” The court found that members of a private club were still members of the public and thus the bar came within the definition of “enclosed public place.” The proprietor was consequently found in breach of the SFOA and was ordered to pay a fine of $3,500.

The proprietor appealed the conviction. In dismissing that appeal, a judge of the Ontario Court of Justice considered a ruling in another case where the Court of Appeal found a condominium’s swimming pool to be a “public swimming area” even though its use was restricted to the 8,000 members of the condominium community. The judge also concluded that it was reasonable for the justice of the peace to find that the members of the proprietor’s “club” were still members of the public. (This goes to show that smokers are people, too!)

Not to be deterred, the proprietor appealed further to the Ontario Court of Appeal. That court had no difficulty in finding that private clubs are not exempt from the SFOA. In considering the purpose of that Act, the Court of Appeal found that:

Read as a whole, the Act is clearly designed to eliminate smoking in public places and thus protect members of the public from contact with second-hand smoke. The word “public” is not defined in the Act. There is no attempt to limit or restrict its application in any way. As I see it, people who join the club are as much members of the public as are members of a swimming club or tennis club.

The court also found that if the legislature had intended to exempt private clubs from the application of the Act it would have done so.

With this, the appeal was dismissed and the conviction was upheld. This decision now effectively destroys the “private club” defence.

For condominiums, the “private club” defence never offered any real protection from the operation of the SFOA to begin with. Section 9 of that Act provides, in part, as follows:

9(2). No person shall smoke or hold lighted tobacco in the following places or areas:
. . .

3. Any common area in a condominium, apartment building or university or college residence, including, without being limited to, elevators, hallways, parking garages, party or entertainment rooms, laundry facilities, lobbies and exercise areas.

. . .

9(6). Every proprietor of an enclosed public place or a place or area mentioned in subsection (2) shall,

(a) ensure compliance with this section with respect to the enclosed public place, place or area;

(b) give notice to each person in the enclosed public place, place or area that smoking is prohibited in the enclosed public place, place or area in accordance with the regulations, if any;

(c) post any prescribed signs prohibiting smoking throughout the enclosed public place, place or area, including washrooms, in the prescribed manner;

(d) ensure that no ashtrays or similar equipment remain in the enclosed public place, place or area, other than a vehicle in which the manufacturer has installed an ashtray;

(e) ensure that a person who refuses to comply with subsection (1) or (2) does not remain in the enclosed public place, place or area; and

(f) ensure compliance with any other prescribed obligations.

Section 9(2) leaves no doubt that smoking is entirely prohibited in all common areas of a condominium in Ontario.

It is equally clear that condominium corporations must comply with the requirements of section 9(6) on the basis that they are the “proprietor” of the common elements, which are places or areas specified in section 9(2). After all, condo corporations have a duty under section 17(2) of the Condominium Act, 1998 to “control, manage and administer the common elements and the assets of the corporation.”

While it may be tempting, unit owners who observe unlawful smoking in or around their condominium would be wise not to rat out the offender to the local health unit. Complaints should be made instead to the condo manager or board, who should then take steps to warn the offender and to ensure compliance with the SFOA. Making complaints directly to the local health unit may have the unintended result of charges being laid against the condo corporation, which can result in hefty legal fees and possible fines that are paid from common expenses.

The cost of failing to comply can be steep: A corporation convicted of breaching section 9(6) of the SFOA for the first time is subject to a maximum fine of $100,000. For second and subsequent convictions, the maximum fine is $300,000. An individual caught smoking in a restricted place is subject to a maximum fine of $1,000 on the first conviction and $5,000 on subsequent convictions.

Some people speculate that smoking will be banned in high-rise condo units one day, seeing as how vibration, sound and smell travel so readily from unit to unit in such buildings. That day may not to be far off, given that the anti-smoking movement has grown considerably more powerful in recent years while smokers’ “rights” are being marginalized. Consider, for instance, the 2008 enactment of section 9.2 of the SFOA, which prohibits smoking in a vehicle when accompanied by a person under age 16. When it comes to smoking, the “king of your own castle” concept is already under assault.

A complete smoking ban in condo units will likely arise once the civil courts begin routinely awarding damages in favour of non-smoking unit owners who sue their chain-smoking neighbours. Such a lawsuit was recently filed in New York City and has survived the first round of challenges by the defendant. See here. With society’s growing intolerance for tobacco smoke, it is probably just a matter of time until trial judges consider smoking to be a nuisance in the same way as pollution, flooding, loud noise or noxious odour. Once that precedent is set, condo corporations will have greater success in enforcing the typical “no nuisance” rules against smokers and in passing specific "no smoking" rules that will be upheld by courts as a stop-gap measure until a legislated ban is enacted.

Condo dwellers who still smoke might consider making a new year’s resolution to quit the habit.

My nominations for 2009 Clawbies

Chris Jaglowitz — Thu, 10 Dec 2009 14:22:28 -0500

Nominations are being accepted for the 2009 Canadian Law Blog Awards (or “Clawbies”). These awards recognize the excellent work of legal professionals who share their insight and expertise with the world through a blog.

Details about the awards and the nomination process can be found here.

Here are my nominations for this year:

Toronto Estate Law Blog by Hull & Hull
Coming up on its fourth anniversary, Hull & Hull’s Toronto Estate Law Blog is a landmark of the Toronto law blog scene and continues to be one of the best resources for estate law in Ontario. This blog provides broad coverage of a wide range of issues in this specialty area thanks, in part, to regular posting by the firm’s members on a rotating basis and by guest bloggers. Regular entries include news pieces, case studies and commentary. Further, this blog is one of the local pioneers of podcasting, offering the audience an audio/video experience while transcripts are always available within a week of the podcast. Any lawyer or layperson with an interest in estate law or a live case to handle is well-served by starting their research here and staying tuned.

Environmental Law & Litigation Blog by Dianne Saxe
Toronto lawyer Dianne Saxe’s Envirolaw blog is a goldmine for environmental law news, analysis and resources. This blog might become best-known for its extensive coverage of Ontario’s recently-enacted Green Energy Act since much of the public input, debate, commentary and analysis for this statute is recorded in this blog, whose author was one of the leading experts in making the bar’s submissions on that Act. When the day comes that a general practitioner needs in-depth analysis of the nuts and bolts of the Green Energy Act or other environmental legislation, they wouldn’t go to the legislative library to read Hansard – they’d go to Dr. Saxe’s blog.

Ontario Real Estate Source by Brian Madigan
Brian Madigan is a real estate broker who practiced law for 25 years. He updates his blog daily with high-quality pieces on the local real estate market, finances, and law. The legal areas covered include real property, agency, contract and much more, with case law studies and commentary. It’s common for a single topic to be covered with a substantive piece for each of several days, which gives readers a very in-depth view of the topic. While this blog’s standard Blogger platform doesn’t provide good search capability (a shame), the content is top-notch and will appeal to lawyers and laypeople alike.

To see the nominations of other bloggers, go to Twitter and search for #clawbies2009.

Good luck to all of the nominees!

Best of the blogosphere for November 2009

Chris Jaglowitz — Mon, 07 Dec 2009 08:45:55 -0500

November was a busy month for condo professionals in the Greater Toronto Area. The Annual Condo Conference was a great hit, as was ACMO’s pub night and monthly educational luncheon.

Here are some of the best condo-related posts from the blogosphere last month. Click the bolded titles to view the entries.

Buyers hit with big bills for surprise adjustments - Bob Aaron describes the despicable practice of a condo developer that saddles new unit purchasers with charges of up to $11K as an adjustment for increases in a levy charged by municipalities but never actually incurred or paid by the developer. Buyer beware.

The Essential Ingredient in Effective Management of Community Associations - Lawyer Tyler Berding describes the players, their perspectives and a number of sensible tips for minimizing disputes in community associations.

What does it mean to owe someone a fiduciary duty? - Florida HOA attorney Donna Berger discusses this commonly-used term and the obligations of condo directors. In a separate post called What should be expected of owners in community associations? she then lists some basic obligations of unit owners that should be common sense but are forgotten or ignored too often. Fairness is a two-way street.

ROC Boards Should Use Common Sense and Compassion When Enforcing Rules - Scott Gordon of the Florida Resident Owned Community blog cites a recent example of a board acting sensibly in a rule enforcement situation.

The Mezuzah Conundrum - Religious Fixtures on Common Element Doorposts - Bradley Chaplick of Fine & Deo illustrates a delicate scenario that requires a delicate touch when it comes to declaration and rule enforcement.

Toronto-area readers may wish to get their snow shovels ready. The winter weather is finally about to begin.

Introducing our microblog

Chris Jaglowitz — Fri, 04 Dec 2009 16:26:29 -0500

I've been using Twitter for the last few months as a way to quickly and easily share news I find in the news or blogosphere by posting a "tweet." I can also "re-tweet" interesting items posted in the media or by other condo or legal professionals.

With a maximum limit of 140 characters per tweet, one has to choose words carefully, abbreviate where possible and, above all, be brief. Each tweet will typically contain a single thought or concept. This gives rise to the term "microblogging" which is discussed in Wikipedia here.

From time to time, I'll republish some of my microblog posts or "tweets" here on our main blog for you to enjoy. These tweets will frequently contain links to other blogs or newspaper websites where you can read more details about the story, so be sure to click those links.

We hope you enjoy this new feature. Comments and newsflashes are always welcome.

Here are some of the recent microblog posts:

Calgary pagan claims religious discrimination when condo bd demands removal of gargoyles from his front step - http://tinyurl.com/yf3mhkk

Toronto theatre troupe performs sketch-like improv commentary on condo living - http://tinyurl.com/ybnkzc7

Shopping for a condo means taking a hard look at fees - Winnipeg Free Press - http://shar.es/aKKWD

Parkview Point Condo Manager Busted for Organized Fraud - Miami News - http://bit.ly/1mqmjB

Chicago Sun-Times: Lawsuit vs. condo over Jewish doorpost symbol and Friday nite board meetings hangs in there - http://bit.ly/1WrXhn

Red Deer Advocate - Red Deer couple feel like 'prisoners' as condo board refuses access ramp - http://bit.ly/3aZKPS

A home-based business and condo-dwelling often don't mix - http://tgam.ca/DbS (via @globeandmail)

RT @HicksMorley: AODA Update: Final Proposed Employment Accessibility Standard Released. #EmploymentLaw http://bit.ly/2wZGtA

Is a condo a good investment? Some buildings "a time bomb of costs." http://tgam.ca/CzG (via @globeandmail)

You can follow the microblog on Twitter - @chrisjaglowitz.

Papers from ACMO Legal Grab Bag Luncheon

Chris Jaglowitz — Fri, 27 Nov 2009 14:15:00 -0500

Here are the papers from the ACMO Legal Grab Bag luncheon held November 27, 2009.

Click the bolded names of the authors to view the papers in PDF. To save the files, right-click on the bolded names and "save as" onto your computer.

David Di Lella of Horlick Levitt on what constitutes an “addition, alteration or improvement.”

Marko Djurdjevac of Deacon, Spears, Fedson & Montizambert on altering common elements to accommodate persons with disabilities.

Karen Kisiel on the latest oppression remedy case.

Kevin Inwood of Heenan Blaikie on preventing workplace harassment and violence.

Michael Pascu of Fine & Deo on how to enforce the declaration and rules in tenancy situations.

You can download all of these papers in a single ZIP file here.

Thanks again to all of the speakers for taking the time to make such excellent presentations and to prepare these helpful papers.

From all of us on the panel, thanks to everyone who came out today! Contact any of us if we can be of help to you.

All-star condo law panel this Friday at ACMO luncheon

Chris Jaglowitz — Tue, 24 Nov 2009 09:13:52 -0500

Condo managers who missed the legal expert panel at the Annual Condo Conference earlier this month can get their annual quota of condo law news at the ACMO "legal grab bag" luncheon this Friday, November 27, 2009 at Richmond Hill Country Club.

I will have the great pleasure of moderating this all-star panel of up and coming condo lawyers:

Marko Djurdjevac of Deacon, Spears, Fedson & Montizambert
David Di Lella of Horlick Levitt
Kevin Inwood of Heenan Blaikie
Karen Kisiel of Kisiel Law Office
Michael Pascu of Fine & Deo

We will be covering a wide range of topics, including:

Human Rights
Occupational Health & Safety
Oppression Remedy
Alterations to common elements

We're saving time to answer your questions, so come prepared!

Registration details are here. Act fast -- tickets are limited.

Managers earn 2 continuing education credits by attending. Resource material will be posted online after the event on the ACMO website and this blog. Stay tuned.

See you there.

CCI's fight against HST takes to the airwaves

Chris Jaglowitz — Sat, 21 Nov 2009 11:39:09 -0500

Many condo boards and unit owners are concerned over the impact of the proposed Harmonized Sales Tax on their condominium corporations and their own pocket books. They will be glad to know that the Toronto Chapter of the Canadian Condominium Institute (which represents over 113,000 condo units in the GTA) has been valiantly advocating against the proposed tax.

CCI-Toronto is taking their fight to the airwaves on TV tonight. Hear the latest about what is being done. According to their news release:

Tune in to Focus Ontario on Global Television on Saturday, November 21st at 6:30 p.m. to hear host Sean Mallen speak with guests Armand Conant - President, Canadian Condominium Institute - Toronto Chapter and Robert Hattin - Canadian Manufacturers and Exporters, on the issue of the Harmonized Sales Tax.

Mr. Conant, President of CCI Toronto, Co-Chair of the Joint CCI-T/ACMO Government Relations Committee and a lawyer with the firm Heenan Blaikie LLP will focus his comments on Saturday's show on CCI-T's opposition to the inequities the HST will create for condominium owners.

For details on Focus Ontario click here.

GMA Condo Alert! (Autumn 2009 edition)

Chris Jaglowitz — Thu, 12 Nov 2009 06:45:16 -0500

Here is the latest edition of Gardiner Miller Arnold's Condo Alert!

Topics covered in this issue include:

The new Apology Act
Increased limit of Small Claims Court jurisdiction
Using consultants in CCDC-2 contracts
Steps to guaranteed lien collection

This issue was distributed in the grab bag given to all attendees of the ACMO/CCI-T Condo Conference this past weekend. Kudos to the conference organizers and participants for a well-organized, well-attended and brilliant conference!

See you at the condo conference!

Chris Jaglowitz — Wed, 04 Nov 2009 15:32:56 -0500

Don’t miss the 13th Annual CCI-T/ACMO Condominium Conference this Friday and Saturday (November 6-7, 2009) at the Hilton Suites Toronto/Markham.

Be sure to come to the Aging in Place seminar (session 1C on Friday morning at 10), where lawyer Denise Lash, property manager Janice Pynn, consultant Sharon Snitman and I will focus on accommodating the needs of aging condo residents. Find out what steps property managers and condo boards must take to accommodate the coming boom of aging condo dwellers and learn what you should do to prepare.

Bob Gardiner will be moderating the Condo Law Update SuperSession on Saturday at noon. Don’t miss it!

Gardiner Miller Arnold is proud to be a sponsor of the conference once again, so all of us from GMA will be there. Take a moment to stop any of us and say hello! If you don’t know us by sight, visit this page to view our photos so that you will recognize us. We look forward to meeting you.

Visit www.condoconference.ca for detailed program, exhibitors list and registration details.

See you there!