The declaration of a condominium corporation must confirm the proportions in which owners are to contribute towards the common expenses of the corporation. This statement is usually expressed in the declaration in a percentages allocated to each unit. Although an owner is generally only responsible for his or her specific share of the total common expenses, in certain circumstances, an owner may be responsible for his or her disproportionate or excessive consumption of public utilities (such as water) even if such utilities are the corporation’s responsibility.
The fact of this case
The Metropolitan Toronto Condominium Corp. No. 659 v. Truman case opposed a commercial condominium corporation comprised of 20 units and an owner who was legally producing marijuana for medical purposes and private consumption through a Health Canada Production Licence. This production required the owner, Mr. Truman, to used disproportionate amounts of water. Mr. Truman testified that he had one hundred plants under cultivation, each requiring 3 liters of purified water every other day. The need for purified water required a wastage of approximately 30%.
Management first noticed a significant spike in water consumption and the cost thereof in the spring of 2012. This was after Mr. Truman moved into his unit in August 2011. Initially, the corporation suspected a leak and conducted an inspection, but found nothing. Eventually, an electrical upgrade found in Mr. Truman’s unit lead to the discovery of the marijuana “grow op”. The corporation installed a water meter in June 2013 to meter and monitor Mr. Truman’s unit separately. Between June 19, 2013 and February 5, 2014, a total of 269,683 gallons of water were consumed in Mr. Truman’s unit. The corporation demanded from the owner a payment in the amount of $19,066.53, representing the cost of the excessive use of water. The matter was brought to Small Claims Court.
Even though it was established that Mr. Truman’s use of water was excessive, the court had to determine whether any consequences resulted from that usage. Pursuant to the corporation’s declaration, the corporation was responsible to pay for “water, except such that is used for commercial and industrial purposes, and except hot water”. Mr. Truman took the position that his usage of water was neither commercial nor industrial. His licence from Health Canada was a Personal Use Production Licence and the use of the marijuana was personal, for which he received no payment – although there was evidence that some of the production may have been legally used by another person.
The decision of the court
The court did not limit itself to the strict definitions of the words “commercial” and “industrial” found in the declaration. Instead, the court relied on the principles of proportionality, equity and fairness. The court also relied on the fact that the declaration provided that each owner was to “pay to the Corporation his proportionate share of the common expenses”. In interpreting this, the court relied on a decision of the Court of Appeal, which dictated that courts should adopt a broad and equitable approach in resolving condominium disputes and should interpret the declaration in a fair and equitable manner. In this other case (YRCC 771 v. Year Full Investment), the Court of Appeal had ruled that excessive usage by a unit owner is not to be included in common expenses, but should be the responsibility of the owner.
In the case at hand, the judge ruled in favor of the corporation:
I accept, without hesitation, that Mr. Truman’s use of water was disproportionate to the allotted 5.13% share of common expenses and in the result, inequitable and unfair, not only to the [corporation], but to the other nineteen unit owners. In effect his cultivation of medical marihuana was being subsidized.
Boards and management should always carefully monitor their corporation’s consumption of public utilities. When facing an abnormal increase, the issue should be promptly investigated, especially when the units are not individually metered. By acting diligently and in a timely manner, the corporation may identify a structural problem with the common elements and mitigate its damages before it is too late. In case of excessive usage, the corporation should gather evidence and properly measure the disproportionate use. The corporation should identify the faulty owner and take the required steps to recoup the additional cost from him or her. If the owner is not cooperating, management should not hesitate to involve legal counsel.