CONDOCENTRIC: CASE UPDATE - Conflicts between the Corporation and Unit Owners

In my experience, it is usually in the best interest of a condominium corporation to deal with disputes or concerns with unit owners in an efficient and legitimate manner in order that a determinative outcome will result. The self-help remedies available to unit owners under the Condominium Act, 1998 (the “new Act”), as with those under the old Act should result in an atmosphere where unit owners feel that due process is being carried out.

By addressing disputes quickly and decisively, a condominium corporation is able to return to its usual “business” instead of facing a seemingly endless stream of complaints and requisitions by owners who feel that they have not been served by the process. 

The recent decision of Rohoman et al. v. YCC 141 reinforces this approach.

The facts of the case are not unusual, albeit somewhat extreme. In 11/2 years, YCC 141’s reserve fund plummeted to a deficit position. Over the same period of time, monthly common expense contributions increased by approximately 50%. Understandably, many unit owners were upset by this course of events and frustrated by the lack of information provided by the Board.

Over the same period of time, unit owners at YCC 141 were required to requisition five separate meetings and be involved in two separate court proceedings.

Roadblocks encountered by the units owners included the initial refusal by YCC 141 to provide names and addresses of unit owners (the court ordered that these be provided); the refusal by YCC 141 to provide full access to its financial records; the failure of YCC 141 to call the meetings being requisitioned and thereafter assuming control over the meeting when the unit owners called their own meeting; and irregular voting and arguably biased chairing practices being carried on at the meetings.

The result of the latest court application was as follows:

1. An order was made appointing an inspector to conduct an investigation of the accounts and records of the Corporation. The court noted that although the cost of the inspection would be burdensome for the Corporation, the appointment of an inspector is meant to protect unit owners who are concerned about the management of the Corporation. The court concluded that where the concerns of unit owners are sufficiently weighty to justify an inspection, the corporation must bear the cost;
2. During any vote taken at a meeting, whether by show of hands or by ballot, all votes must be taken into account. It is not proper to carry out the vote by show of hands only to include proxies if the initial outcome is not favourable to one side;
3. A new meeting be held to elect members to the board.

In the case of YCC 141, it would have been in the best interest of the Corporation, and all unit owners, if the concerns and questions raised could have been dealt with immediately, rather than following the route of avoidance, confrontation and additional expense.

Note: it is unfortunate that this case did not deal with the issue of who has the right to chair requisition meetings called by unit owners where the condominium corporation has initially decide to ignore its obligation to call and hold the meeting within the prescribed time period, thereby forcing the unit owners to do so.

From “Common Elements” Winter 2002

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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