Condo Living

July 20, 2018 Published by Toronto and Area Chapter - By Brian Horlick, Timothy M. Duggan, Maya Smith

Are Electric Vehicles Charging Over Your Rights?

From the Summer 2018 issue of the CCI Toronto Condovoice Magazine.

Electric Vehicles are Here, Like It or Not The Provincial Government recently made it easier for condominium corporations and owners to install electric vehicle charging systems (EVCS) on the common elements and assets of corporations. Specifically, new regulations under the Condominium Act, 1998 (the "Act") come into effect on May 1, 2018, that exempt the installation of EVCS, provided certain conditions are met, from the usual requirements for changes to the common elements or assets of the corporation. The new regulations may be a boon to green technology exponents. Condominium unit owners and boards should, however, be concerned that this brave new world is likely charging over some of their rights.

The Right to Vote

Section 97 of the Act normally requires that any change to the common elements or assets that is estimated to cost more than 10 per cent of the annual budgeted common expenses for the current fiscal year must have the approval of the owners of at least 662/3 per cent of the units. The only exception to this requirement had been for work Timothy M. Duggan B.A., LL.B. Horlick Levitt Di Lella LLP Maya Smith B.A. cum laude, B.C.L., LL.B. Horlick Levitt Di Lella LLP that the corporation carried out under an obligation to repair the units or common elements after damage or to maintain them; and where the corporation used materials that were reasonably close in quality to the original as appropriate in accordance with the current construction standards (said work is technically deemed under the legislation to not to be an addition, alteration or improvement to the common elements or a change in the assets of the corporation for the purposes of section 97 of the Act).

In addition, owners often have the right to call a vote on certain less expensive additions, alterations and improvements to the common elements and changes to the assets and services provided by the corporation. Specifically, section 97 usually requires that, if requisitioned by the owners of at least 15 per cent of the units, there must be a meeting of the owners on any proposed change with an estimated cost, in any given month, that is more than the greater of $1,000 and 1 per cent of the annual budgeted common expenses of the corporation for the current fiscal year, unless the proposed change is either

(a) necessary in order to comply with a mutual use agreement under section 113 of the Act [ie shared facilities agreement] or the requirements imposed by any general or special Act or regulations or by-laws made under that Act; or (b) necessary, in the opinion of the board of directors, to ensure the safety or security of persons using the property or assets of the corporation or to prevent imminent damage to the property or assets.

Installation by Corporation

Under the new regulations owners have, however, essentially lost the right to requisition a meeting where (a) the corporation is installing an EVCS at an estimated cost that is not greater than 10 per cent of the annual budgeted common expenses for the current fiscal year; and (b) in the reasonable opinion of the board, the owners would not regard the proposed installation as causing a material reduction or elimination of their use or enjoyment of the units that they own or the common elements or assets, if any, of the corporation. The corporation can, under these conditions, now proceed with the installation 60 days after providing the owners with the necessary notice; and the only recourse left to the owners would be an application to the courts.

Alternatively, owners have the right to requisition a meeting if the proposed installation does not meet either of the two conditions described in the paragraph above.

The owners in this case have the right to requisition a meeting, however, the installation of an EVCS by the corporation may still be exempt from section 97 of the Act provided that the board has assessed the costs of the proposed installation and notice (providing certain necessary information and statements) has been sent to all the owners. Owners should know that this means that the installation can proceed without meeting some of the conditions normally required for changes by the corporation to the common elements and assets.

For instance, imagine a scenario where the installation of an EVCS by the corporation is estimated to cost more than 10 per cent of the corporation's annual budgeted common expenses. This scenario is, arguably, conceivable in the case of smaller buildings, with concordantly small budgets. As explained above, under the header 'The Right to Vote', section 97 of the Act usually requires that any change with an estimated cost of more than 10 per cent of the annual budgeted common expenses be approved by the owners of at least 662/3 per cent of the units. This requirement no longer applies when the corporation proposes to install an EVCS. No matter the cost to the corporation of installing the EVCS, even if the estimated cost exceeds 10 per cent of the annual budgeted common expenses, the corporation is only obligated to hold a vote if the owners requisition a meeting. A majority of the owners at the meeting would need to then vote against the proposed installation in order to stop the project. The government has essentially flipped what would have been an opt-in scenario for owners into an opt-out.

Installation by Owner

Boards should know that it is also now harder for them to reject an application by an owner to install an EVCS on the property of the corporation. Owners normally need to meet certain conditions under section 98 of the Act before they can make an addition, alteration or improvement to the common elements. This is no longer the case when it comes to the installation of EVCS. As of May 1, 2018, there are different rules for the installation of an EVCS by an owner, provided certain conditions are met.

One consequence of the new rules is that the board can only reject an owner's application to install an EVCS under certain conditions.

Owners normally need to obtain board approval for any change they intend to make to the common elements under section 98 of the Act; and the parties must enter an agreement that is registered on the title of the owner's unit. In addition, except in the case of certain changes to the common elements of which the owner has exclusive use, all the other owners of the corporation are entitled to receive notice and vote on certain proposed changes, as provided under section 97 of the Act, and described above.

These conditions no longer apply to owners who want to install an EVCS on the common elements. Owners must now submit a written application to the board, including drawings, specifications or information, and other particulars with respect to the proposed installation. The board then has only 60 days to reject a properly prepared application; and only, in the words of the regulation, if a report or opinion of a person whose profession lends credibility to the report or opinion, obtained by the corporation, sets out reasons and clearly states that the proposed installation,

(a) will be contrary to any general or special Act or regulations or by-laws made under that Act, including the Electrical Safety Code adopted under Ontario Regulation 164/99 (Electrical Safety Code) made under the Electricity Act, 1998 but not including anything in the declaration of the corporation or a by-law or rule of the corporation;

(b) will adversely affect the structural integrity of the property or assets, if any, of the corporation; or

(c) will pose a serious risk,

 

(i) to the health and safety of an individual, or

(ii) of damage to the property or the assets, if any, of the corporation.

The board can still impose certain justified changes to the manner or location of the installation; and the parties must enter a written agreement determining various aspects of the installation, including ownership, repair, maintenance, and the costs of installation, operation and insurance, which the corporation must then register against the title to the owner's unit.

At the end of the day, however, it is now much harder for the board to stop an owner from installing an EVCS on the property of the corporation; and owners have lost certain rights to notice and control concerning what happens on the common elements of their property.

The Road to Havoc is often Paved with Good Intentions

The proliferation of electric vehicle use should be of great benefit to the environment and society. Our concern is the potential costs of steamrolling over the rights of boards and owners. It is hard to predict how exactly events will unfold in any given corporation. The scenario that worries us is that where the enthusiasm of individual owners and/or board members for electric vehicles blind-sides more efficient and cost-effective programs for the installation of an EVCS.

Imagine a forward-thinking corporation that is carefully planning and budgeting for the installation of an EVCS on a largescale. The only problem is that a handful of impatient owners apply to install EVCS on their own. The new regulations prevent the board from rejecting the applications just because the individual installations would disrupt the plans of the corporation. The probable result is a flurry of piecemeal and less efficient installations, which result in higher costs for everyone. This is but one hypothetical.

This is where planning and clear communication are invaluable. We may still be years away from seeing the average parking garage filled by electric vehicles. The time, however, is now for many boards and owners to start planning for the installation of EVCS.

Disclaimer: This article is provided for information purposes only, and is not legal advice. To ensure that you are obtaining accurate advice for your specific matter, you should seek the assistance of a licensed and qualified legal professional.