Condo corporations are unique statutory creations with certain rights, abilities, and obligations, including commencing lawsuits. Subsection 23(2) of the Condominium Act requires written notice be given to the all owners in the corporation’s record of owners before commencing an action.
There are instances, whether through error, inadvertence, lack of time, miscommunication, etc., that the required notice to owners is not provided before the action is commenced. The established law, going back to a Court of Appeal decision from 1983 was that failure to provide notice rendered the underlying action a nullity. In other words, if a condo corporation commenced a major lawsuit against a declarant for construction deficiencies and failed to provide written notice before commencing the action, the lawsuit would be dismissed (if the declarant raised the issue of the lack of notice). This would be a major windfall for the declarant and materially unfair to unit owners.
As of today, the law has been changed and lack of notice will not automatically render the claim a nullity. The Court of Appeal in York Region Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc. determined that the lack of notice is a procedural defect and the court has discretion to determine the effect, if any, of such a defect. Courts will consider various factors, including the extent of non-compliance and prejudice suffered as a result of non-compliance when determining what to do, if anything, as a result of the procedural defect.
The court determined that the prior case law was inconsistent with subsequent Supreme Court of Canada cases pertaining to statutory interpretation and the consumer protection nature of the Condominium Act. Further, automatically rendering the action a nullity benefits third parties and prejudices the condo owners who were the ones intended to be protected by the requirement to provide advance notice.
To be clear, condominium corporations must still provide notice, but it appears that failing to do so prior to commencing a claim will likely not prejudice the claim if notice is provided after the action is commenced in a timely manner and the lack of initial notice was due to error or inadvertence.
