Canada: Is Your Condo Ready For The Legalization Of Cannabis?

We are only days away from the Federal legalization of cannabis. In response to this legislative change, many condominium corporations have decided to implement rules to address smoking and growing of cannabis, as well as smoking of tobacco within the complex.

Unsurprisingly, opinions on the topic can vary significantly and are often strongly held. On the one hand, you have those who welcome a smoke-free environment and who wish not to be exposed to second-hand smoke or to the odour of tobacco or cannabis. On the other hand, you have occupants who consume tobacco or who look forward to legally consuming cannabis once it is legalized. In addition to this, you have individuals who may require to consume cannabis for medicinal purposes.

Potential problems associated with cannabis and tobacco smoking

Tobacco and cannabis smoke are known to cause irritation, discomfort and nuisance. Second-hand smoke is also known to be a health hazard. Unfortunately, it is impossible to completely prevent the migration of smoke, second-hand smoke and/or odour between units and/or from units to common elements. Smoking also increases the risk of fire, as well as maintenance and cleaning costs.

The legalization of cannabis may pose additional challenges to corporations since the Cannabis Act will allow Canadians adults to grow cannabis in their home. As it presently stands, dwelling occupants will be allowed to grow up to four (4) plants of cannabis, of up to 1 meter high, in their unit. Cannabis growing can result in damage to units and/or common elements, including damage by moisture/mould as a result of spores emanating from growing cannabis plants. The cultivation and drying of cannabis can also result in disproportionate use of utilities (water, electricity) if not sub-metered and may increase the risk of fire and other hazards.

For this reason, amongst others, some provinces and territories (including Québec, Manitoba and Nunavut) are set to prohibit growing of cannabis in private residences. The Ontario Landlords Association as well as the Ontario Real Estate Association are also requesting more restrictive guidelines. Finally, the Ottawa Public Health Office has recommended that cannabis smoking be prohibited on balconies and in condominium units.

So what can be done in condominiums?

Can condominium corporations adopt rules regulating tobacco and cannabis?

Most condo corporations already have some (albeit limited) tools to deal with some of the potential challenges expected to be caused by the legalization of marijuana. Indeed, most corporations already have general restrictions against the creation of nuisance (which includes odour and smoke) and against the use of a unit in any way which may increase the risk of fire or which may increase insurance premiums.

Naturally, the difficulty in using these general restrictions is that boards of directors may find themselves stuck between a rock and a hard place, having to determine and demonstrate whether a specific situation constitutes nuisance beyond what is to be reasonably expected in a condominium complex. There are countless shades of grey when balancing the rights and expectations of neighbours when dealing with something as subjective as nuisance and risk.

While I hate to be the one killing the buzz, one of the solutions may be to further restrict (or ban altogether) the use and/or the growing of cannabis in your condo complex. This can be done either with the passing of a reasonable rule or with an amendment to the declaration.

Boards can, indeed, pass rules promoting the safety, security or welfare of owners and of the assets of the corporation or rules which prevent unreasonable interference with the use and enjoyment of common elements and units.  The rules must be reasonable and consistent with the Condominium Act, the declaration and the by-laws. Courts have already recognized that a rule preventing tobacco smoking in condominiums are reasonable and enforceable. We expect that rules restricting or prohibiting cannabis will equally be found to be reasonable.

A rule may be passed by the board without any vote from the owners if none is requested by them. Even when a vote is requested on a proposed rule, passing it only requires the support of 50% of the owners present at a meeting called to vote on it.

It is important to note, however, that any rule adopted by a corporation is subject to the Ontario Human Rights Code. In Ontario, corporations must therefore always accommodate bona fide disabilities or other bona fide requests based on human rights.

As indicated above, corporations can also adopt restrictions on the use or growing of marijuana by amending their declaration, although such an amendment would require the support of 80% of the owners.

Must condos "grandfather" units when adopting rules restricting cannabis?

By its very nature, the enforcement of a condo rule opposes conflicting interests.  Indeed, a rule prohibiting smoking may result in two camps. On the one hand, you have owners who benefit from the protection of the rule and are happy to be in a smoke-free environment. On the other hand, you have owners who feel aggrieved or prejudiced in the exercise of what they perceive to be their right to smoke (be it cannabis or tobacco).

Naturally, it is difficult for someone to complain about a rule if it was in existence when they bought or moved in.  Indeed, owners should only move into a condo if they are prepared to live by the rule of its community.  However, the issue certainly feels different when a new rule proposes to restrict a right one had been able to exercise until that point. Imagine the situation where someone has been able to smoke for years prior to the adoption of a rule.  These owners may feel (rightfully) that the rules are being changed on them. Still, the balance of the owners are also entitled to evolve and adopt new rules.

It is in this context that many condos propose to include a grandfathering provision when they adopt a new rule. Such a provision would allow existing occupants to be shielded from the application of the rule for a specific period of time. Stated otherwise, these grandfathered occupants would be authorized to continue a certain conduct, for a set period of time, despite the adoption of the rule.

Is grandfathering required?

We are often asked whether condos have an obligation to grandfather owners or occupants when they adopt a new rule.

In our view, grandfathering is not a legal requirement when adopting a new condo rule. Indeed, the Condo Act, does not impose such an obligation.  Grandfathering, however, may go to the reasonableness of the rule being adopted. Indeed, condo rules must be "reasonable". A rule which does not grandfather an existing right may, in itself, be found to be unreasonable. For this reason, among others, many condos include a grandfathering provision when passing new rules.

So, while it is not a legal obligation, it is often a good idea and is sometimes a required political compromise to ensure that the rule is accepted by owners.

How long should the grandfathering period be?

The jury is still out on the length of an adequate grandfathering period. While some smokers would like to be grandfathered for ever; non-smokers would like to benefit from the rule as soon as possible. It is difficult to reconcile these conflicting interests. Surprisingly enough, we do not have a lot of guidance from the courts on this question.

In our view, the length of the grandfathering period will vary based on the right being grandfathered. Are we grandfathering someone's right to keep a pet? In such a case, many would argue that the grandfathering provision should last the life of the pet. You basically grandfather Pistache the dog and not the unit. Naturally, you would need to balance this with the impact Pistache has on the neighbours. The same may apply to grandfathering smokers.

The grandfathering period should also consider the disruption or impact it has on other owners.  One could argue that no grandfathering provision is required when prohibiting a highly disruptive activity or one likely to damage property or likely to cause an injury or illness.

There is no magic number. In our experience, most corporations grandfather occupants for a period of one to two years.  This seems to strike an acceptable balance between the competing rights, giving a reasonable transition period to both smokers and non-smokers. We have seen, however, a few corporations grandfather for up to 5 years and some for the duration of the occupancy: basically for as long as the smoker occupies the unit.

Must we grandfather cannabis user?

Finally, perhaps the most sensitive question: should we grandfather the use of cannabis?  It is important to note that this blog post does not deal with medicinal cannabis. These cases require some accommodation.  This post only deals with whether to grandfather the recreational use of cannabis.

The answer to this question depends on when the rule was adopted and implemented.

Rules adopted before October 17:

For rules adopted and implemented before the legalization of cannabis, no grandfathering is required. Indeed, there was no "acquired right" to be grandfathered since recreational smoking was not legal before then.

Rules circulated before October 17 but not yet adopted:

What if a rule is circulated to owners prior to October 17, but only gets adopted or implemented after that date? Indeed, rules must be circulated for at least 30 days before they can be enforced.  Similarly, owners can requisition a vote on the rule, which may further delay its implementation by an additional 35 days.  So, a rule circulated on October 16 may only be adopted by December 20, 2018.

In our view, as long as you circulate the rule to owners before October 17, you do not have to grandfather cannabis users.  Indeed, those wishing to be grandfathered are not prejudiced any more than if you had adopted and implemented the rule before cannabis legalization.

Rules circulated after October 17:

What if a corporation circulates a rule, for the first time, after October 17? We could easily imagine someone lighting up at midnight on October 17. Must that user be grandfathered?

In our view, to be reasonable, any grandfathering must be proportional to the exercise of the acquired right. How long must you grandfather someone who has been exercising a right for one hour, one day or one week?  In our view, for the foreseeable future, condos could adopt a rule restricting the use/growing of cannabis without any grandfathering. Naturally, the longer you wait before adopting a rule restricting cannabis, the more you will have to consider a grandfathering provision.

Things may be different however if an occupant purchases or moves into a unit after October 17 but before the rule is circulated to owners. Indeed, new occupants could argue that they have chosen this specific corporation (and not the one across the street) because it allowed cannabis consumption.  A condo may be able to strengthen its position by noting on its Status Certificate its intention to adopt a rule on cannabis. In fact, it may be wise to do so even if you are still considering the question.

What's the best rule?

At the end of the day, the best rule is the one acceptable to owners. The best way to ensure that a corporation strikes the perfect balance is to survey the owners.

We have developed an arms-length online survey allowing corporations to canvass their owners on these delicate questions prior to circulating a rule to them. The survey is easy to use and does not require any complicated login.  To ensure maximum participation, corporations can choose how long they want the survey to remain open.  The information received from owners is kept confidential and only aggregate results are shared with corporations, which provides for more accurate results. Once the results are in, we generate an easy-to-use report for the board.  This reports guides the board in drafting the best possible rule and can also be a very useful tool when presenting the rule to owners.

This article was first published in www.CondoAdviser.ca.

Read the original article on GowlingWLG.com

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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