View Article
CONDOCENTRIC: CASELAW UPDATE - Common Expense Collection and Insurance Deductible
YORK CONDOMINIUM CORPORATION NO. 482 V. CHRISTIANSEN (2003 – ONTARIO SUPERIOR COURT OF JUSTICE)
Common Expense Collection: Where a single unit owner owned several units, the court held that while a condominium corporation may only register a lien for common expense arrears against the unit(s) that is/are actually in arrears, and not against other units owned by the same owner, a condominium corporation is entitled to collect the rents from tenants in all the units within the condominium corporation owned by the unit owner.
Furthermore, the court held that the condominium corporation was entitled to apply the rents collected from the tenants of the defaulting unit owner as the condominium corporation saw fit. That is, the defaulting owner had no power to require the condominium corporation to allocate the funds to the owner’s indebtedness in the manner which best suited the owner.
The court also recognized that the sections in the Condominium Act, 1998 (the "Act"), dealing with collection of common expenses, liens and the attornment of rents are to be interpreted so as to achieve equity amongst the owners and to preserve the priority of common expenses.
Thus, it is critical that condominium corporations, in so far as possible, keep current records of any tenancies and have ready the documentation necessary to give the necessary notice to tenants in the event that, given a particular set of facts, attornment of rents becomes the preferred method of collecting common expense arrears.
YORK CONDOMINIUM CORPORATION NO. 551 V. VERA JANKOV (2003 – TORONTO SMALL CLAIMS COURT)
Insurance Deductible: This case is of importance because it addresses the indirect costs incurred by a condominium corporation through increased insurance premiums following a claim being made. The Court recognized that in certain circumstances not only is it not incumbent on a condominium corporation to go through its insurance company when damage occurs, but that sometimes it is actually beneficial to unit owners not to do so.
The facts of this case dealt with damage caused by water escaping from a unit. The damage amounted to $5,398.15; $398.15 in excess of the $5,000.00 insurance deductible. The condominium corporation decided to sue the unit owner rather than submit a claim to its insurer. It would appear that the Court recognized the importance of avoiding increased insurance premiums as a result of a relatively small monetary claim. The condominium corporation was awarded the full amount claimed. The judge considered the condominium corporation’s position to be reasonable and, moreover, determined that a benefit would result to the defendant owner in the long run in that the defendant owner would not have to contribute toward additional insurance premiums.
From “Common Elements” Fall 2003
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.
© Elia Associates Professional Corporation, All Rights Reserved.
