Important Recent Court Decision Respecting Corporation’s Repair and Maintenance Mandate
There have been very few Court decisions to help us draw the line between projects falling within the Board’s mandate and projects requiring involvement of the owners – i.e. to help explain Section 97 of the Condominium Act. But we now have a very helpful decision on point: Harvey v. Elgin Condominium Corporation No. 3.
The facts in the Harvey case were as follows:
Elgin Condominium Corporation No. 3 is a 51-unit townhouse-style condominium, with “roof decks” above the garages. Fifteen years after the original construction, the roof-decks were failing and leaking, due to “extensive construction design and implementation flaws.” The corporation’s engineers recommended that the roof decks be replaced, and offered two options:
Option 1: New wooden decks and railings (replacing the original wood); or
Option 2: Vinyl decks, coupled with aluminium railings.
The engineers recommended option 2 because it would be less costly and easier to service and maintain, and would also avoid the elevation and drainage problems of the original design. These advantages outweighed the fact that vinyl decks would require added care to avoid puncture of the decking and underlying membrane.
The Board held meetings of the owners to discuss the two options, and even held an ordinary vote of owners on the options. Out of 24 voting owners, 20 voted in favour of Option 2. The Board then chose option 2, and levied the necessary special assessments, in the amount of $10,000 per unit, to proceed with the work.
One of the owners, Mr. Harvey, objected strenuously to the proposed work and ultimately sued the condominium corporation. Among other things, Mr. Harvey said that the project constituted a substantial change to the common elements, requiring a 2/3 vote of the owners because the cost of the roof deck replacement would greatly exceed 10% of the corporation’s annual budget. He asked for an Order that the work stop and that all special assessments be reversed.
The Court dismissed Mr. Harvey’s claims, finding that the project and special assessment fell within the Board’s mandate. The Court said that the Board had the right to proceed under either Section 97 (1) or Section 97 (2) (b) of the Act. Here are some of the key extracts from the Court’s decision:
“…the wording of s. 97(1) understandably contemplates a degree of latitude appropriate to the circumstances, and evolving construction knowledge and methods. Not surprisingly, our courts therefore repeatedly have held that replacement of ‘old’, ‘defective’ or ‘worn out’ common elements with ‘new’, ‘improved’ or ‘upgraded’ material, equipment or designs still constitute ‘repair’ and ‘maintenance’, and this is so even when the result has a different, more contemporary, aesthetic appearance.”
“…[the condominium corporation] was entitled, [and indeed obliged, pursuant to its statutory duties of repair and maintenance], to embark on the garage deck remedial work without the need for unit owner notice or approval, let alone approval by the special majority vote contemplated by s. 97 (4) [which applies to ‘substantial changes’]”
This case clarifies that condo corporations are entitled, and indeed obliged pursuant to their statutory duties, to attend to repairs and maintenance, even when the proposed new features may be somewhat different than the original.