Being elected to the board of a condominium corporation comes
with many duties and obligations. Directors have a duty to act in
good faith and in the best interests of the all of the owners. The
Board as a whole has a duty to ensure compliance with statutory
responsibilities, including maintenance and repairs of the common
elements. Where board members fail in their duties, unit owners pay
the price. Two recent cases highlight this point.
In the case of Wu v. Peel Condominium Corporation No.
245, the complainant owned a unit on the top floor of a
high-rise condominium. Her unit was directly under the level which
houses the building's mechanical, elevator, and HVAC equipment.
She claimed that she started experiencing an unacceptable level of
noise and vibration in her unit. Others made the same or similar
PCC 245 retained experts who confirmed that there was a problem
but the board did not take meaningful steps to correct the problem.
The problem persisted. The board eventually told the complainant
that it would not address the problem because it had determined
that an alteration in her unit might not comply with a city by-law.
The allegation was factually and legally without merit. The
alteration at issue had been done years ago by a current board
member and the board's president had knowledge of the
alteration shortly after the work had been done. The status
certificate issued to the complainant when she purchased the unit
did not mention the alteration.
The owner brought an application in court for relief from
oppression which PCC 245 vigorously defended. PCC 245 claimed that
it simply had not had time to fix the problem, that it had followed
its engineer's advice, blamed the complainant for causing the
problem, claimed its $400,000 elevator refurbishment program was
done to appease the complainant, and, finally, attacked the
The court found that PCC 245's conduct amounted to
oppression, unfair prejudice, and disregard for the owner's
interests. The Court ordered PCC 245 to pay the complainant's
damages for oppression in the amount of $30,000 and ordered PCC 245
to return to court to outline its repair plans. In the end, the
owners of PCC 245 ended up paying the cost of repairing the
elevators (repairs that it had been avoiding for so many years) as
well as a $30,000 damage award, its own legal costs, and $20,000 of
the complainant's legal costs. The majority of these costs
could have been avoided if the board had simply dealt with the
problem instead of finding reasons not to.
This and a few recent cases from British Columbia and Alberta
show that courts are taking steps to ensure that management and
boards of directors carry out their obligations to maintain and
repair the common elements.
In the case of Ballingal et al v. Carleton Condominium
Corporation No. 111 et al, four unit owners brought an
application against their condominium corporation relating to
enforcement of the single family use provision in the
corporation's Declaration. They also applied for oppression
remedies against the corporation as well as against individual
board members. Despite having a single family use provision in its
Declaration, many owners rented out their units to groups of
students. There were attempts to pass a rule defining "single
family use". The issue was discussed at owners meetings and
letters were sent to owners in breach of the rule. Emotions ran
high and board members resigned.
The board president was one of the owners who rented out units
to students. He vigorously fought and campaigned against the
enforcement of the single family use provision.
The court made findings against the board president, holding
that he had breached the standard of care as a director by not
acting honestly and in good faith. The court found that in his
campaign against one of the proposals to define "single family
use", the president misled unit owners, undermined the board,
and criticised the corporation's solicitor on his website.
The board president claimed that those acts were done in his
capacity as an owner and not as the president. The court did not
accept this explanation. The court looked at his behaviour as a
whole and found that it did not meet the standard of a reasonably
prudent director. The court however did not award damages for the
Being a board member is not easy. It often involves overseeing a
large budget and making tough decisions that will affect fellow
owners and neighbours. These two cases illustrate the need for
board members when carrying out board duties to act in a
business-like manner, not to promote their own self-interest, and
to ensure that their decisions are made after considering the best
interests of the all of the unit owners.
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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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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