How to Impose Condominium Fees – Smooke v Rosemont Estate Condo Corp 101222494

Condominium fees are usually the number one conflict point between boards of condominium corporation and the unit owners of that condominium corporation. The big issues include:

(a) Increases to condominium fees in any given year.
(b) The uses of the condominium fees in the previous year(s) or for the upcoming budget.
(c) “Mistakes” and the financial cost thereof.
(d) Costs of professional fees such as those paid towards lawyers or accountants.
(e) Major improvements or repairs to the condominium corporation.

Whereas owners are usually more than happy to let volunteer directors make sure that light bulbs are changed and lawns mowed, the owners’ attention is grabbed when the net effect of the board’s actions is a demand for more money. This is not to say that criticism is not correctly founded (that will depend on the circumstances of any specific dispute), but often the unit owners’ role is limited to feedback to the board, or attempting to impose restrictions on the board’s decision making through the relevant governance process which can be administratively difficult. That limited role can be frustrating.

The Rosemont Estate (find the decision here) decision deals with just such a situation. The board increases condominium fees for the property, and at least one owner is upset with that decision. The conflict eventually escalates and an application is made to the Court of Queen’s Bench for a number of remedies, but it appears that most are focused on the increase in condominium fees. The Corporation responded to the application, and was largely successful.

Two lessons are to be gained from this decision. The first is the default method of assessing condominium fees according to the Act and Regulations. If your bylaws modify this process, you need to be aware of those bylaws and incorporate into the process accordingly. The second is some basic lessons about the approach a condominium corporation is take when they are going to court on an application of this sort.

Assessing Condominium Fees

You can read the decision at the link above, and the specific commentary at paragraphs 26-45 to get the full picture. Some important points that answer questions I hear regularly:

(a) The board has no obligation to have the budget approved by the unit owners. The decision to set fees is theirs alone. (para. 38 and 39)

(b) There was no duty by the condominium corporation to enter alternative dispute resolution as part of the Condominium Act. (para. 50)

(c) Asserting some pressure for collecting arrears is appropriate, even for smaller amounts. (para. 58)

Again, these points are all subject to the specific bylaws of any condominium corporation.

Lessons regarding a Condo Corp in Court

The Court provide some basic lessons about what it would expect from a condominium corporation, especially if represented by counsel, on a similar application. This would include:

(a) A more complete history of the dispute – There was a number of allegations in the material that did not make sense within the context of the affidavits.

(b) A more complete record of the relevant governance – No one filed copies of the Bylaws of the corporation. They also did not file any of the financial disclosure that was relevant to the issues in front of the court. The court described this as being “coy with the evidence”.

(c) The court has begun to distinguish between “defaulting on a CPA statutory duty or a bylaw obligation” and an application to understand and clarify the nature of an owner’s rights for the purposes of cost awards. In this case, the owner had no basis to make the claim and application that he did, but the court determined that it was not intended as a personal attack on the board. He simply misunderstood the nature of his rights. The court fixed costs below what was requested as solicitor client costs. If this was a action for the collection of the unpaid fees, the outcome may have been different.

I don’t think that any of this is rocket science, but it is a clear affirmation of some good basic principles of how to deal with some routine condominium matters.