Canada: Shared Facilities Agreements – Problems And Solutions

Last Updated: March 16 2016
Article by Warren Kleiner

Why do we see so many problems with Shared Facilities Agreements? Assuming two or more corporations or other entities are bound by one, it must be remembered that these agreements are often drafted by the developer's lawyers when the project is in the conceptual phase, before anyone knows how things will really be "on the ground" once the project is built.

Here are a few common problems with shared facilities agreements:

  1. The Condominium Act does not require shared facilities agreements to be fair and equitable, and often they are not.
  2. Shared facilities agreements often fail to properly list facilities that are in fact shared. This may result in one party paying all of the costs associated with certain facilities while the other party(ies) to the agreement get to use or benefit from those facilities, providing them with a "free ride".
  3. The agreement does not specify how decisions should be made. Most agreements establish committees that are authorized to make decisions, made up of one or more representatives from each corporation or entity, but fail to set-out how decisions should be made. Are decisions made by a majority of committee members, by a majority of the corporations, or must decisions be unanimous? If the agreement is silent on the issue, the default position is that decisions must be unanimous.
  4. Shared facilities committees should be able to make decisions. Some agreements provide that if the committee cannot agree on a decision, the issue goes to the individual boards or there has to be a meeting of the combined boards. This can delay important decisions. And in these situations, there is often no guidance as to what happens if the boards cannot agree, except dispute resolution.
  5. The agreement does not fairly provide for cost sharing or the recalculation of cost sharing with the result that one party contributes more than its fair share of the costs for one or more facilities.
  6. The agreement does not  specify the positions of the members of the committee and their obligations. Is there to be a chair of the committee, and if so, how is the chair selected? Is there to be a secretary and a treasurer? How are they chosen and what are their responsibilities?
  7. The parties to the agreement have never reviewed it and do not know what it actually provides.
  8. Too often the agreement is not the problem but the boards or committee members are. In these situations, we see that boards or committee members often do not work together for the benefit of the community.

Solutions

1. Know your Agreement

The way to avoid disputes is to know what is provided for in the agreement and to implement its terms. It is better to comply with the terms of the agreement than to, for example, contribute excess costs for several years and then decide you want to bring legal proceedings to recover the overpayment.

It is prudent to have the agreement reviewed by a solicitor who can provide an opinion on what is shared, how the parties should contribute, and how decisions are to be made. It is useful to have the sheets of the description and/or the applicable reference plans colour co-ordinated showing in different colours what belongs to each party and what is shared.

2. Work Together

Parties to a shared facilities agreement need to understand that it is important to work together to find solutions for the benefit of the community. Understand that you are on the committee for the entire community, not just your condominium.

Boards should not think in the "us v. them" mentality. This will lead to problems. Shared facilities agreements are intended to allow multiple corporations to share various services and facilities. Shared facilities agreements, and disputes that arise under them, are not supposed to be about one party getting a benefit at another party's expense. That approach is a recipe for disaster and expensive legal battles. It is in the interests of all the parties to the agreement to work together to seek a reasonable solution to whatever problem arises.

3. Enter into a new or amended agreement

In many cases, the most effective solution is to enter into a new or amended shared facilities agreement that properly lists those services and facilities that are shared, fairly allocates costs and adequately provides for how decisions are to be made. Because many agreements are deficient, when the opportunity arises and boards are able to work together, it is time to act. The long term relationships in the community are more important than for one entity to benefit at someone else's expense. The potential negative effect on market value when there are problems in a community should always be considered.

In some communities, it is often a good idea to expand what is considered to be shared to ensure uniformity and consistency in terms of maintenance and repair standards and renovation projects and to benefit from economies of scale. Sometimes it is the opposite and it makes no sense for certain things to be shared.

If there is a shared facilities agreement, that means that there is a long term relationship involved.  That is reason enough for the parties to be reasonable. Too often unfortunately, that is not the case.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Warren Kleiner
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions