Canada: Environmental Matters - May 2014

Last Updated: June 3 2014
Article by Tamara Farber

More and more Condominium Corporations are seeking advice relating to environmental matters that may affect the Corporation and the unit owners. These issues may or may not be simple. An example that we have recently had to deal with is the development of a condominium building on former contaminated industrial lands. The developer obtained all the necessary permits and approvals from the Ministry of the Environment to develop on these contaminated lands. The approvals were given subject to the undertaking that certain construction details (such as a liner in the underground garage layer) would limit any potential exposure from subsurface contamination, and an undertaking to carry out ongoing monitoring and maintenance obligations.

The problem for the Condominium Corporation was that it had little understanding of what those ongoing obligations were, and how to effectively manage them. The obligations had the force of law, and any failure to comply with them had the potential to result in significant ramifications for the Condominium Corporation and the individual board members. In theory, a failure to comply with the ongoing obligations could lead to significant fines (for individuals, fines could be up to a maximum $100,000.00 per day on which the offence occurred or continued; and up to $250,000 per day for a corporation). Needless to say this type of obligation is not commonplace and would most likely be unknown to both managers and boards of directors. They would not have any idea of these ramifications without obtaining proper advice.

Under ideal circumstances, a developer would provide a proper outline of ongoing obligations of the Corporation at turnover. However, the world does not run in ideal circumstances, and in some cases, the developer itself has very limited experience with these matters.

So what is a Corporation to do? A few thoughts:

  • in general, retain good legal advisors to assist in navigating through matters beyond the scope of the Corporation and/or the property manager;
  • specifically, at the turnover, if there are complex areas that require a greater understanding than that which is within the scope of the board and/or property manager to manage, recognize that outside assistance (legal or other professional) may be necessary;
  • have a regular system in place to assess whether obligations are being complied with, and, where it is apparent that the obligations are not being complied with, seek advice from professionals;
  • keep records of compliance in a designated area so if there is any change in management of the Corporation new personnel will have an organized system in place;
  • have a response plan in place in the event something goes awry. This should include a point person for the Corporation for communication with unit owners, any regulators and for internal management.

In most cases, the management of the Corporation requires the time and commitment to understand the issues, and to work together to manage those issues. Although environmental issues can be complicated, they are in essence, no different than managing other Corporation issues. The hammer, if there is one, is that the Ministry of the Environment has significant powers to order the Corporation to undertake studies, implement mitigation measures, provide testing results, and a host of other tools to ensure compliance. These can all add up to significant costs which may not have been appropriately budgeted for at first instance.

Sometimes, environmental issues arise not during construction of the condominium, but after the condominium is constructed. For example, there can be contaminant migration from another site nearby, or an underground storage tank could rupture on the property. In these situations, the obligations of the board may relate to both managing a current condition and investigating the source. Managing the situation may involve its own host of challenges – should status certificates reflect the mere potential for environmental impact? Or should the Corporation wait until the matter is investigated to determine if there is any real financial impact to unit owners?

There is no cookie-cutter approach to dealing with environmental issues. Each matter requires a thorough understanding of the issues, and qualified people advising the Corporation of its risks and responsibilities. We are here to help!

Newsletter Tip # 1

Ontario Condo Reform: The triggering of the provincial election in early May has temporarily stalled the proposed amendments to the Condominium Act. Although changes to the legislation that governs condominiums will have a direct impact on the millions of Ontarians who own and/or reside in condominiums, the issue has been largely neglected by all parties during the election campaign. We encourage owners, board members, and industry professionals to engage their local candidates and discuss matters relating to condominium law reform and the issues affecting their condominium community and the condominium industry.

Newsletter Tip # 2

Elections and Access to the Building: The Condominium Act and the Canada Elections Act speak directly to the issue of canvassing for elections. The Canada Elections Act provides that a condominium must provide canvassers access to the property between the hours of 9:00 a.m. and 9:00 p.m. The Condominium Act does not set out specific times but indicates that access must be "reasonable". Some corporations have created policies to deal with canvassing on the common elements, which often include a provision that requires a candidate or his/her campaign office to provide advance written notice to the condominium corporation of the times and dates that canvassers will be attending the building. An argument can be made that the requirement for advance written notice limits the general right to canvass in the building under section 81 of the Canada Elections Act. However, it is unclear whether section 118 of the Condominium Act will take precedence over the "general" right to canvass under the Canada Elections Act and/or whether a court would find such a policy to be unreasonable, as there is no case law directly on point. Colleges and universities often have similar policies for canvassing in dormitories, but we are not aware of any court case that has actually approved/affirmed the right to create reasonable policies to deal with canvassing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Tamara Farber
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