Grandfathering: Balancing the Flexibility and Predictability of Condominium Living

Condominium Corporations are empowered by legislation to amend their Declarations, and pass new By-laws and Rules. This means that the governing documents can change (in many cases with the involvement of the owners, as required by the legislation) and this flexibility is a critical aspect of condo living. On the other hand, there is also the counter-balancing desire for predictability. Some owners and residents rely on the governing documents as they are written. For example, if a resident has two dogs, and the corporation passes a new rule containing a one-dog limit, that owner is suddenly at a disadvantage.

Courts have held that a balance between the flexibility of creating or changing governing documents, and residents’ need for predictability can be achieved through the practice of ‘grandfathering.’ For example, suppose a resident is a smoker, and the corporation passes a new no-smoking provision, the resident might be grandfathered, meaning that they can continue to smoke in their unit. Grandfathering does not however, apply to every situation, or to every resident. If it did, the principle of grandfathering would be so broad as to effectively prevent the corporation from exercising its statutory powers to amend or pass new governing documents.

Three cases illustrate this point. The first is Durham Condominium Corporation No. 90 v. Carol Moore and Keith Wallace (Ontario Superior Court), which was released in September, 2010. In this case, the rear yard decks were part of the condo’s common elements. As with any other common element, modifying the decks required board approval, pursuant to the Condominium Act, 1998, and, in this case, the corporation’s Declaration. The Board adopted the following policy: they would only approve deck modifications if the dimensions of the modified deck did not exceed the original size of the deck. At the time the policy was adopted, a few decks were ‘oversized’, and were grandfathered by the corporation.

After the policy change, the respondent owners installed a deck that did not conform to the board-approved plans, or to the board’s new policy. The owners argued there was an element of unfairness since other ‘grandfathered’ decks did not have to meet the board-approved plans. Nonetheless, the Court ordered that the owners modify the deck, to bring it into conformity with the Board’s policy and the Board-approved plans. The Court stated that a condominium corporation can properly take steps to change its policies, with the appropriate grandfathering of existing conditions.

The second case is Willson v. Highlands Strata Corp., from the British Columbia Supreme Court in November, 1999. The petitioners in this case were the original purchasers of a unit. The Disclosure Statement stated that there were no restrictions on leasing the units. After turnover, the corporation passed a new by-law imposing restrictions on leasing the units. The Petitioners sought an order that they were exempt from the restrictions on leasing. The Court held that the absence of restrictions in the Disclosure statement did not prevent the corporation from imposing new restrictions on leasing. The court further held that the petitioners were not grandfathered under condominium legislation, because they leased their unit after the new by-law came into effect.

The third case is Metropolitan Toronto Condominium Corp. No 601 v. Hadbavny, from the Ontario Superior Court in October, 2001. The applicant was a unit owner. The corporation’s by-laws contained a one-pet limit, which had not been enforced. When the owner moved into his unit, the owner had one dog and, noting that the one-pet rule was not enforced, subsequently purchased a second dog, which the corporation demanded be removed from the unit. The owner sought an order that the second dog be ‘grandfathered.’ The Court granted the order stating, “how the Board managed the pet rule over the years… created a situation in which Mr. Hadbavny could reasonably expect that if he had two dogs who were not a nuisance, he would be permitted to keep them.” The Court said that the owner had relied on the board’s non-enforcement of the one-pet rule “to his detriment, and purchased his second dog in the reasonable expectation that no objection would be taken to it.” The corporation could not sleep on its rights, and then enforce the rules against people who relied on non-enforcement and had thereby put themselves in a position of disadvantage that they would not have put themselves in, had the provisions been enforced uniformly and in a timely manner.

In summary, when establishing a new policy, Rule, By-law or Declaration provision, it is important to bear in mind that in appropriate cases, some residents or situations should be ‘grandfathered,’ bearing in mind the following principles:

• Grandfathering is intended to reflect a fair or reasonable compromise between the need for flexibility and the desire for predictability.
• Grandfathering may be appropriate where an owner or resident has relied upon the previous circumstances or the corporation’s previous provisions.
• Grandfathering does not apply in all cases. For grandfathering to apply, the owner or resident normally must have made a commitment that is difficult to undo, so that it would be harsh or unreasonable to impose the new requirement on the particular owner or resident. However, grandfathering normally won’t make sense if the grandfathering would allow an unreasonable risk of harm to persons or property.