Posted: 11 Feb 2016 01:21 AM PST
In condominium living, the needs of the few
must be balanced with the needs of the many. Compromise by owners and residents is necessary in order to achieve a harmonious condominium community. Where balance and compromise are missing, things can get very ugly.
A recent case, Couture v. TSCC No. 2187, illustrates how a dispute relating to condominium parking escalated out of control and it was up to the Ontario Superior Court of Justice “to unwind the tangled web that the parties wove”.
The condominium consisted of 44 residential units, with just 32 parking spaces. The condominium declaration provided that the Board had the authority to assign the right to lease a parking space to unit owners in the condominium. The declaration further provided that: (i) leases would automatically terminate when the tenant ceased to be an owner of a residential unit, (ii) unit owners could not assign the parking leases or otherwise convey a parking space, and (iii) all motor vehicles parked in the parking spaces must have valid license plates and insurance and be in good working order. Unfortunately the condominium corporation did not document the parking arrangements with owners by way of written leases.
One unit owner kept a car with expired licences plates and no insurance in her parking space for several years. The Board then wrote to her demanding that she bring the car into good repair, insured and with active plates within 30 days. After no action or response to this letter (which the owner claimed she never received), a further letter was sent giving her an additional month to March 31, 2012 to bring the car into good standing, failing which her car would be towed to the street and the parking space leased to another owner on the waiting list. The Board also returned the owner’s two post-dated cheques for the combined monthly common expenses and the parking fee.
The owner took the position that the unwritten lease could be terminated only if she ceased to be the owner of a unit in the condominium and re-submitted her post-dated cheques. In any event, after receiving the second letter the owner had her car removed and sent to an auto repair shop – by doing so, she was no longer in breach of the declaration.
A couple of days before the Board’s March 31, 2012 deadline, the Board wrote to the unit owner that her parking privileges were withdrawn and her parking space was being reassigned to another owner. Once again her post-dated cheques were returned and she was asked to submit new cheques to cover only the common expenses. The owner refused to submit cheques for just the common expenses and the corporation refused to cash any of the owner’s cheques that included payment of the parking fee.
As a result, the unit owner fell into arrears in the payment of common expenses. In addition to the arrears, the corporation also sought to collect payment of its legal fees relating to the parking lease termination and correspondence from its lawyer relating to the multiple exchanges of the post-dated cheques.
After the unit owner delivered a notice of dispute in accordance with the mediation and arbitration provisions in the corporation’s by-law, the Board responded that the unit owner was a vexatious litigant and refused to participate in any mediation or arbitration proceedings. In doing so, the Board completely disregarded section 132 of the Condominium Act, which imposes compulsory mediation and arbitration of disputes between condominium corporations and unit owners.
Eventually, the corporation filed liens against the owner’s unit for unpaid common expenses and legal fees. The Board also imposed on more than one occasion an administrative fee in the amount of $250 (as permitted under the corporation’s by-law) against the owner for alleged harassment and alleged tampering with security cameras on the part of the owner’s husband.
This prompted the owner to commence legal proceedings against the corporation and its directors. The owner also moved out of her unit and eventually sold it to escape harassment from the Board.
The Court concluded as follows:
1. The corporation did not have any right to terminate the parking lease prior to the March 31, 2012 deadline set by the Board. However, as the owner did not show to the court that she suffered any loss or harm from the wrongful termination of the lease. no damages were awarded to the owner in respect of this breach.
2. The two liens were not properly registered, as in both cases, they related to defaults more than three months old. As the owner continued to submit cheques, the corporation could have cashed the cheques and either refunded the parking fee or made it clear that the cheques were being cashed on a without prejudice basis as it related to the parking issues. “The liens were used to punish the applicant in legal fees rather than as bona fide methods to collect amounts fairly subject to lien rights.” The corporation was ordered to repay the amounts paid by the owner under protest to remove the liens, excluding the amounts attributable to the monthly common expenses.
3. The by-law provision that authorized the imposition of administrative fees was ultra vires and thus those administrative fees were improper.
4. The conduct of the Board was harsh, burdensome and oppressive.
“The registration of facially invalid liens, levying of subjective and arbitrary fines, and the refusal to mediate/arbitrate as required were not reasonable responses by a board seeking to manage the affairs of the corporation reasonably and in good faith.” The owner was only awarded $1000 as nominal damages for the corporation’s oppression, as the owner did not provide any evidence to support her claims for damages. The Court also noted that “the legal doctrine of ‘it takes two to tango’ suggests that the applicant was very much a participant in the escalation of hostilities between the parties.”
Throughout the decision the judge chastised the parties for the adversarial approach they took, rather than trying to reconcile their differences in a more conciliatory manner:
“Rather than addressing the issues that arose from the parties’ respective (mis)understandings of their rights and obligations, they determined to take tactical positions with each other that basically involved: name-calling, hyperbole, failure to listen, taking extreme positions, wasting time, money and effort, and causing themselves and each other distress.”
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