A Reminder About Incurring Reasonable Charges When It Comes to Enforcement

A recent decision from the Condominium Authority Tribunal (the “CAT”), Schnitzler v Metropolitan Toronto Condominium Corporation No. 1321(“Schnitzler”), provides a reminder for condominiums corporations to be reasonable when taking compliance action (and incurring the related costs).

In Schnitzler, the condominium corporation sent a compliance letter from its legal counsel to the owner with respect to alleged noise and nuisance issues coming from the owner’s unit. The condominium corporation also demanded that the owner pay the related legal costs of $1,449.23. The owner, Mr. Schnitzler, paid the amounts owing under protest and sought to recover the amounts paid by way of a claim to the CAT.

The CAT held that the condominium corporation’s conduct was unreasonable. The Tribunal held that prior to sending a letter from legal counsel (and incurring the costs for doing so), the condominium corporation should have either warned Mr. Schnitzler about the allegations (which would have allowed him to respond) or investigated the allegations first.

The Tribunal ordered the condominium corporation to reimburse the owner for the costs incurred (including the CAT filing fees).  Here’s what the Tribunal said:

When incurring legal and compliance costs, condominium corporations must act reasonably and judiciously (see Metropolitan Toronto Condominium Corporation No. 818 v. Tahseen et al., 2022 ONCAT at paragraph 29). In the present circumstances, I find that MTCC 1321 has acted unreasonably in incurring legal costs by obtaining a compliance letter from legal counsel before either warning Mr. Schnitzler or investigating the allegations. MTCC 1321 did not identify the August 2021 incidents to Mr. Schnitzler in a timely way and it did not provide Mr. Schnitzler with an opportunity to participate in an investigation of his alleged conduct or otherwise respond to the allegations. I do not accept MTCC 1321’s argument that a warning letter would not have been effective at addressing the alleged conduct. MTCC 1321 escalated to a legal letter without attempting other interventions. Given that I have found that these costs were not reasonably incurred, I consider it fair in these circumstances that Mr. Schnitzler be reimbursed for this amount.

As our readers may know, condominium corporations are statutorily required under the Condominium Act, 1998, to act reasonably, particularly when it comes to dealing with compliance matters.  [See Section 17 (3) of the Condominium Act, 1998.] The Schnitzler decision provides another reminder of this important principle. Otherwise, a condominium corporation runs the risk of being unable to recover the costs incurred for such matters.

As always, stay tuned to Condo Law News to keep up to date on the latest developments in condominium law.