Legal

June 3, 2022 Published by London and Area Chapter - By Trish Kaplan

Part 1—A Layman’s Insight into CAT Cases

From the CCI Review 2021/2022-4 June 2022 issue of the CCI London Chapter

Let me preface this article with “I am not a lawyer”. The information herein is drawn from the legislative authorities as well as cases that have appeared before the Condominium Authority Tribunal (CAT).

The Protecting Condominium Owners Act, 2015 is the Act to amend the Condominium Act, 1998, to enact the Condominium Management Services Act, 2015 and to amend other Acts with respect to condominiums.

Here we are many years later, legislation continues to be introduced. While so many have embraced the condominium lifestyle (some with trepidation), they have neglected to build on their knowledge of that is essentially necessary for them to know to safeguard their investment.

There is much information readily available to owners, boards, managers and all those who work in the industry; including from the legislative regulators, being the Condominium Authority of Ontario (CAO) and the Condominium Authority Tribunal (CAT); the Condominium Management Regulatory Authority of Ontario (CMRAO); and the Association of Condominium Managers of Ontario (ACMO) who support condominium management professionals toward improving the quality of services.

It is recommended that you visit the websites to ensure you are being kept current. You can subscribe to important news and updates, delivered to your inbox.

CCI has its own expertise as well. We so often benefit from our local owner/directors, professional and business partner members who so generously share their expertise to CCI in numerous ways – by their articles and their presentations and the support they contribute so we can share it with you. Sharing of expertise is carried out from members across our province and nationally. Social media is also a great source of information. Check us out and like us on social media.

You can only be astonished at how much you can learn from reviewing CAT cases. The CAT is a fully online Tribunal that deals exclusively with disputes between condominium corporations and unit owners.

The cases are posted on our social media on Mondays, aptly called Legal Matter Mondays. There are takeaways from every case that can provide value.

The jurisdiction of the CAT is established under Ontario Regulation 179/17 (the Regulation) and they may dismiss an application under Rule 19.1 of the CAT’s Rules of Practice because the issue does not fall within the CAT’s jurisdiction.

The CAT’s jurisdiction expanded on October 1, 2022 to hear disputes about pets, vehicles, parking and storage, and settlement agreements. The CAT can also rule about chargebacks related to those issues. It expanded again on January 1, 2022 with the amendment of Section 117 (2) of the Condominium Act and amendments to O. Reg 179/19 and now has jurisdiction to hear disputes regarding nuisances.

WHAT YOU NEED TO KNOW FIRST

The CAT is part of the Condominium Authority of Ontario. It provides a forum for people to resolve condominium-related disputes through a convenient online system that produces Settlement Agreements, Consent Orders, and legally binding Decisions that everyone must follow. The CAT's legal powers come from the Condominium Act, 1998. It is committed to tribunal excellence, focussing on its users, resolving disputes fairly and efficiently, and promoting harmonious condominium communities.

As an owner or a corporation, before contemplating with proceeding with a dispute via the CAT, it is important to carefully review the CAT’s current Rules of Practice. These Rules outline how the CAT operates, and what you need to know or do when you are involved in a dispute that comes to the CAT.

https://www.condoauthorityontario.ca/wp-content/ uploads/2022/01/CAT-Rules-of-Practice-Jan-1-2022.pdf

Rule 17.1 of the CAT’s Rules of Practice states that the CAT can dismiss a case at any time in certain situations. These include if the CAT determines that a case is about issues that are so minor that it would be unfair to make the Respondent go through the CAT process to respond to the Applicant’s concerns, and where a case is about issues that the CAT has no legal power to hear or decide. Under Rule 41.1 of the Rules of Practice, the CAT will end Stage 3 and close the case if the CAT Member dismisses the case

An application and the issues raised in any case brought before the CAT go through a rigorous process with a member of the CAT.

What can be learned?

• Boards who are making decisions that may have a legal component should do their due diligence and discuss the matter with their legal counsel.
• Does the corporation have a budget line for condominium legal counsel – tribunal affairs?
• Does the corporation have an agreement with any law firms relating to providing legal services?
• Who is responsible for responding to requests for documents from owners inasmuch as adequate records in accordance with Section 55 (10) of the Condominium Act, 1998 that the corporation should maintain?
• Does the management contract include related responses to owners for records (including where redactions may be required and why) and other tribunal affairs?
• Who should be participating in the hearing stages of disputes raised by applicants to CAT?
• Owners and corporations are taking advantage of the CAT’s authority to ensure safety and compliance within the condominium.
• The option not to appear when a case is scheduled is really not an option. If one party appears the tribunal proceeds as scheduled.
• While a corporation has carried out their duties of enforcement of the corporation’s governing documents, significant delays between each of the steps corporations may take might mean that the corporation is not taking more decisive actions might be construed as the condominium corporation not be able to enforce compliance with governing documents; however, it does not negate the option of an application made to the Tribunal.
• Where enforcement presents an issue, as a general rule the court will enforce the rules established by the condominium and exceptions will be rare.
• Parties to any proceeding have a responsibility to make the hearing proceed as expeditiously as possible
• While the Tribunal is quite clear on the orders, it is considered important that the CAT issue an all encompassing orders to facilitate the corporation from having a replicated event where the owner pays no attention to the board.
• Each case is clearly reported on under Reasons for Decisions, including:

a) Introduction

b) Background

c) Issues & Analysis (broken down to specific issues that need to be addressed. An award of costs to be assessed is included as an issue

d) Order (includes timeframes of orders and costs awarded)

CORPORATION DOCUMENTS & ENFORCEMENT

It is interesting to note that some of the disputes reviewed have been linked to disagreements to the corporation’s documents and enforcement issues and practices. One of the most important lessons learned from reviewing cases, is the need to be familiar with the corporation’s governing documents, followed by a seriousness to create clarity in every ruling that residents are expected to follow.

Section 17(3) of the Act sets out the duty of a corporation to ensure owners and occupiers of units comply with its governing documents. The corporation has a duty to take all reasonable steps to ensure that the owners, the occupiers of units, the lessees of the common elements and the agents and employees of the corporation comply with this Act, the declaration, the by-laws and the rules.

Section 119(1) of the Condominium Act, 1998 sets out the requirement that owners and occupiers of units comply with the Act, the declaration, by-laws and the rules of a corporation. It has been made more than clear, that language or wording in any of the corporations’ governing documents should be clear, concise, reasonable, and in accordance to the Condominium Act, and the governing documents (declaration, by-laws and rules). Where there could be any exemptions from a rule, the board and residents must be clear of any procedure for considering exemptions in support of accommodation to any Coderelated needs.

Ontario Human Rights Code – duty to accommodate is not a free-standing obligation under the Code. It is not to accommodate individuals’ preferences. The OHRC Policy summarizes the Code as follows: The Code “protects people in Ontario with disabilities from discrimination and harassments under the ground of ‘disability’. The protection extends to specific areas of daily life including “housing”, “receiving services” or “using facilities”.

What can be learned?

• Where rules are made or amended by the board– it is recommended they be reviewed by legal counsel so that they are reasonable and consistent with the Act, the declaration and by-laws of the corporation and that the wording has clarity BEFORE notice is given to owners. Ambiguity undermines reasonableness where unit owners and residents may be subject to a constant state of uncertainty and insecurity about the meaning of, and their ability to comply with, those rules
• Consistent and documented enforcement by the corporation is necessary. Documentation will be required in the event of a dispute.
• It is important that boards and managers be familiar with different codes such as the Human Rights Code and/or other related codes that may come before them in response to enforcing the rules of the Corporation. Where necessary, legal counsel is recommended so that there is no unreasonable action. The Tribunals have the jurisdiction to consider the provisions of the Code in the context of matters properly before them

RECORDS

In accordance with section 55 (1) of the Act, it is the corporation, and not its condominium management provider (although they may also keep adequate records as required by the management contract) which is responsible for the maintenance of its records.

Identification of Core records vs Non-core records can be found here: https://www.condoauthorityontario.ca/wp-content/ uploads/2021/07/Core-Records.pdf

https://www.condoauthorityontario.ca/wp-content/ uploads/2021/07/Non-Core-Records.pdf

When requesting records of board meetings, it can be unclear how many board meetings were actually held during a relevant period, or if some of the Corporation’s business was transacted outside of board meetings (an issue over which this Tribunal has no jurisdiction), However, there can be evidence that the board made significant financial decisions which should have been properly recorded it in the minutes.

Adequacy of records relate to the open book principle at the core of the Act – to establish that the financial records of the condominium corporation must enable an owner to gain a true understanding of the corporation’s finances. There is a difference between an individual owner’s assessment of adequacy and an objective assessment based on the Act.

MEETINGS AND MINUTES

The Act is clear that the corporation’s business must be conducted through board meetings, and that the corporation must keep adequate minutes of meetings. Section 32(1) of the Act states that the board of a corporation shall not transact any business of the corporation except at a meeting of directors at which a quorum of the board is present. Section 55(1) of the Act states that the corporation shall keep adequate records, and specifically lists a minute book containing the minutes of board meetings as a required record.

Condo business cannot be conducted by individual directors or the entire board outside of a board meeting (e.g., by email). This means that boards cannot conduct condo business without first calling and holding a board meeting. Commonly, board meetings are held monthly, but condo boards can hold as many meetings as needed to run the condo corporation effectively.

Who is assigned the task of taking minutes and how are they approved?

Minute taking is an important task and a reasonably high standard and expectation for accuracy should be applied. Minutes should include attending the meeting and, signing and dating the minutes.

What should Boards maintain some ongoing records?

A request for records could be delayed or even not responded to in the process of a management change. For example, the topic of “adequate” records kept by the corporation arises in multiple cases. It appears that corporations did not sign its board minutes. As a result, there is no easy way to distinguish between draft and approved minutes and where a set of minutes have not been signed and there is include a statement in these postings that the draft minutes may be changed before becoming finalized.

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Trish Kaplan, CCI (Hon’s) is the current part-time Administrator for the chapter; having served in the position from April 2003 to September 2010. She received the CCI Distinguished Service Award from CCI National in November 2006. Trish served as a director on the chapter board from 2010-2015 and was subsequently returned to the position of Administrator.

Trish is a condominium owner, served as a director of the corporation she resides in for a time and is a retired condominium manager.

Her experience in the different areas of condominium continues to be a benefit to the chapter and its members.