A Recent CAT Decision on Adequate Record Keeping

In the case of Hamid-Rajroop v. Metropolitan Toronto Condominium Corporation No. 728, the Condominium Authority Tribunal (CAT) found that the condominium corporation failed to adequately maintain records and therefore refused to provide those records when requested, without a reasonable excuse. As a result, the condominium corporation was ordered to bring its records into compliance, pay a penalty of $750 to the owner, and pay an additional $200 for Tribunal fees.

How did MTCC 728 fail to maintain adequate records?

The owner’s request included a request for copies of any notices of lease held by the corporation. Section 83 of the Condominium Act (“the Act”) requires owners who lease their unit to provide specific information to the corporation within a certain timeframe and requires the corporation to keep a record of those notices.

The condominium corporation’s response to the request indicated that it did not have any record of leased units to provide. MTCC 728 told the owner that the corporation had not received any “Form 5’s” (a form that can be used to provide the required notice in relation to a lease).

BUT: MTCC 728’s Periodic Information Certificates (PICs) showed that the corporation was nevertheless aware that many of the units were in fact leased (even though the landlords had not provided formal notice of such to the corporation as required by the Act).

The Tribunal found that since the condominium’s most recent PIC showed that the corporation was aware of at least eight leased units, notice of some sort must have been received in relation to those units. Therefore, to meet the requirements of the Act, a record of those notices should have been kept.

As a result, the Tribunal found that MTCC 728 failed to keep adequate records and ordered the condominium to bring itself into compliance by creating a record of the notices received and providing a copy to the owner within 30 days.

Key takeaway: Be careful to work with whatever information you have

Even in cases where landlords fail to satisfy the formal requirements of Section 83, the condominium corporation may nevertheless have sufficient informal notice to allow the corporation to create and keep the record required by Section 83.

Failing to maintain can mean refusing to produce a record without a reasonable excuse

As many of our readers may know, refusing a record without a reasonable excuse not only means that the condominium corporation is in breach of its obligations under the Act, but also that the CAT may impose a penalty against the corporation.

In this case, because MTCC 728 did not properly maintain its records, it could not produce records that an owner was entitled to when requested.

The CAT found that MTCC 728 refused to provide records without a reasonable excuse and that a penalty was appropriate. However, the penalty imposed was on the lower end. Specifically, the CAT stated as follows:

However, while I have found that MTCC 728 reasons for refusal do not comprise a reasonable excuse under the Act, in this case MTCC 728’s refusal to provide the record does not appear intentional, due to acrimony between the parties, or a result of a willful disregard of its responsibilities. Rather, its failure to maintain the record seems to stem from confusion about its obligations under the Act, which hopefully has now been eliminated. Therefore, I find that penalty on the lower end of the scale, in the amount to $750 is appropriate.

Key takeaway: reasons and reasonableness always matter

In relation to the penalty in this case, it was key that the condominium thought that they were properly maintaining records and properly responding to the owner’s request.

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