Condo Living

July 19, 2017 Published by Toronto and Area Chapter - By Marc Bhalla

Problems and the Solutions

From the Summer 2017 issue of the CCI Toronto Condovoice Magazine.

In the movie The Break-Up, Jennifer Aniston and Vince Vaughn play a couple who live in a condominium unit. Unfortunately, their relationship is not working out and they break-up; however, neither one wants to leave their beloved condo. So, the recently split couple decide to continue to co-exist together in their unit. Hilarity ensues as, inevitably, the exes find themselves provoking and antagonizing one another, escalating the conflict between them further at every encounter.

We often see this type of dynamic emerge in the shared facilities setting. This is the case because a condominium built in the vicinity of another cannot easily be relocated. Ongoing relations are often integral to a shared facilities structure.

Whenever conflict arises between parties who must continue to interact – such as divorcing parents sharing child custody – mediation offers tremendous opportunity. Unlike arbitration or court, where a third party imposes a decision, mediation empowers those directly involved in a dispute to have a say in the outcome. With the help of a mediator, conflicting parties are able to learn more about one another, share their interests and explore different options for addressing their issues. This often results in creative and sustainable resolutions, made with the long-term relationship in mind and embracing the sentiment shared in the first article of this series to "be excellent to each other".

While many shared facilities agreements contain dispute resolution clauses, the mandatory mediation provisions within section 132(2) of the Condominium Act, 1998 (the Act) directs disputes pertaining to "an agreement between two or more corporations" to mediation. Thus, regardless of whether a mediation clause – or even a written shared facilities agreement – exists, mediation appears to be the path to addressing shared facilities issues involving multiple condominium communities.

The problem, particularly with the Act, is that dispute resolution guidance often ends with telling parties to mediate. That is, there is no process set out in terms of how the mediation should come together. The practical reality of this is that condominium communities experiencing a disagreement are first required to agree on a process to facilitate mediation rather than follow one prescribed for them. This often frustrates the intent of embracing a conciliatory approach; vague dispute remedies can be useless or, worse, serve to escalate disputes. This is especially the case if a party is unappreciative of the mediation opportunity or has legal representation that is unwilling to try to work with others to find a mutually agreeable outcome.

Several unique factors at play introduce further challenges when condominiums who share facilities contemplate mediation. For example, when you are looking at managing a conflict that involves two – or more – Boards of Directors, there is the potential for many people to be at the negotiation table. Even in a simple scenario involving two fivemember Boards, you can easily run out of fingers to count mediation attendees if property management and/or legal counsel also participate. To then find a date and time that is good for everyone to meet, a comfortable setting and a process that allows for participation by all in a matter of hours - as opposed to days - is not easy.

Thankfully, mediation is at its best when it is a flexible process that caters to each unique situation and allows for a structure that promotes comfort and provides the greatest potential for a constructive gathering. To that end, shared facilities mediations can be customized to best fit each circumstance. Just as every shared facilities arrangement can be different, so too can every shared facilities mediation.

Consider how flexibility in the structure of a mediation can help overcome challenges such as the butting heads of directors of feuding neighbouring condominiums. Especially if ill will exists between community leaders, it can be difficult to find common ground or reach agreement on even the most basic of issues. When mentality shifts from working together to an "us vs. them" view, conflict can easily escalate in a hurry.

'Cause baby now we got bad blood You know it used to be mad love So take a look at what you've done 'Cause baby now we got bad blood (Hey) now we got problems And I don't think we can solve them You made a really deep cut And baby now we got bad blood – Taylor Swift (Bad Blood)

Consider the impact of introducing "new blood" into negotiations, moving away from past grudges and exploring new relationships and ideas. That said, it is not uncommon for long standing community leaders to identify – very personally – with their roles. Suggesting that a long standing Board President ought to not participate in the process because they would bring "baggage" to the table would likely land as an insult; and in their view, a complete and utter lack of appreciation to the thorough knowledge and the vast familiarity they have with an issue. At the same time, the "same old" representation from a community can also be perceived as resistance to change.

The flexibility of the mediation process can be helpful in high conflict circumstances by offering a minimum and maximum number of participants on behalf of each condominium community involved in a shared facilities mediation. For example, structuring a mediation such that at least two directors from each Board will take part can allow for new ideas to be explored while drawing upon history as may be needed, thereby balancing each Board's internal politics through precisely the type of guidance that the current legislation fails to provide in terms of how to get to the mediation table in the first place. Each circumstance is different – there may well be situations where it is best to exclude an "old guard" altogether notwithstanding the hurt feelings that may inevitably fall out of such or to limit participation to one representative per Board – the takeaway here is that there are different ways for mediation to be structured. It can be worthwhile to consider such things as who may be the most appropriate participants to make the most of the mediation opportunity.

A common misconception about mediation appears when it is viewed only as either a success or failure. That is, mediation is considered a success only if it results in settlement and a failure when it does not. This viewpoint is mistaken because it neglects the progress that can be made when parties try to work together, even if they are not ultimately able to come to a full agreement by the time that their meeting concludes. Such progress can be particularly helpful in the context of ongoing relations. Sometimes mediation is most constructive when it moves away from trying to find the answer to everything to instead focus on forming an interaction plan – looking to the future, inevitable interactions that will take place and establishing a common understanding.

Much time, money and effort can be saved if everyone is on the same page as to what can be expected. Considering things such as what constitutes a reasonable reply timeline and preferred methods of communication can alleviate the risk of tensions escalating as a result of misunderstanding. Acts of honouring negotiated communication parameters can offer an easy way to show good faith and allow for improved relations through baby steps.

Another obstacle that often needs to be overcome for many facing shared facilities issues comes at the fault of television and movies. Just as the reality of the discomfort a splitting couple experience was masked with comedy in the aforementioned film The Break-Up, so too can dramatizations mask the reality of going to court – leaving a mediation participant with the wrong impression of the time, cost, stress and uncertainty of the process.

In the course of mediating, participants generate and consider various options for addressing their situation. There is agreement only if everyone is amenable to an option, as mediation does not force or impose anything upon participants. However, for each party to determine the appeal of each option presented, they must consider it against the other options available to them – both those presented as settlement choices in the course of a mediation and those outside of it. To that end, it is important to invest some time in obtaining a sense of reality before participating.

Not too long ago, I had a client participating in a shared facilities mediation who decided that it would not be worth the cost of involving legal representation in the process. Instead, the condominium Board prepared for the meeting with their lawyer but was self-represented at the mediation itself. The lawyer's advance guidance was not able to take into account information that the Board learned during the mediation. The wellmeaning directors participating viewed their legal position as iron clad and refused to consider creative options that arose in the course of the mediation process, due to an inflated understanding of their chances of success if the issue were to proceed to arbitration. The Board members wound up not taking a settlement option that they later determined would have been their best choice on account of being penny wise and pound foolish. In the long run, it would have saved them money to have spent a little bit extra to have legal counsel participate in the mediation and help them weigh the reality of their options.

In part 3 of this article series, Armand Conant will shed some further light on the role that legal counsel can have in effectively addressing shared facilities situations.