Enforcing compliance with the condominium documents against a defaulting condominium owner can be a very costly undertaking for a condominium corporation. Even though section 17(3) of the Condominium Act, 1998 imposes an obligation on the condominium corporation to take all reasonable steps to enforce compliance, there is no guarantee that the condominium corporation will be able to recover all of its enforcement costs from the defaulting owner.
In a recent case, MTCC No. 634 v. Adamo, the condominium corporation incurred costs in excess of $30,000 in connection with a court application to compel the unit owner to bring the fireplace in his unit in compliance with the fire regulations. The need to conduct remedial fireplace work affected all owners with a fireplace in their unit. Only this one unit owner refused to undertake the remedial measures, although he ultimately did comply before the application reached a court hearing.
The corporation claimed costs in the amount of $15,000, plus disbursements and HST. The Judge’s initial reaction was that the Corporation’s claim was exorbitant. However, after reviewing the docket narrative and the history of the file, the Judge was able to understand why the corporation’s costs for this case were higher than what would ordinarily be expected for a case of this nature.
The Judge noted that as a result of the unit owner’s adamant refusal to remedy the fireplace problem, the unit owner only had himself to blame for the costs incurred by the condominium corporation relating to its court application. The Judge further acknowledged that the corporation took all reasonable steps and demonstrated considerable patience with the unit owner before commencing its application.However, the Judge was not prepared to make the unit owner responsible to compensate the corporation for the full amount that it claimed. Rather, the unit owner was ordered to pay costs in the amount of $9,000, inclusive of disbursements and HST, payable in monthly installments of $500, without interest, as long as the owner continues to own his unit. In the event that the unit owner sells his unit before paying the full amount, then the balance owing will be immediately due in full.
“The applicant’s entitlement to indemnity for costs is restricted to the costs reasonably necessary for the litigation itself, and not extra-litigation efforts to identify and rectify the problem. These costs must be proportional and consistent with [the owner’s] reasonable expectation of the costs he might be called upon to pay.”
As the corporation was not fully recompensed for the costs it incurred, the unrecovered costs will be included in the corporation’s common expenses payable by all of the unit owners, including those who undertook the required remedial work to their own fireplaces without the necessity for a court application, and those who did not have a fireplace in their unit.
