As many of our readers know, under section 134 of the Condominium Act, when a condo corporation successfully brings a Court application to obtain compliance with its governing documents, it can also charge back to the unit its reasonable legal costs in doing so (provided that the corporation has obtained an order for damage or costs).
That certainly makes sense when the owner is the one in breach of the corporation’s rules but what about when a tenant of the unit is the one at fault? Can the Corporation then recover additional compliance costs against the owner?
Recovery of compliance costs against a tenant
A recent decision from the Superior Court of Justice has confirmed that condos can indeed recover reasonable legal fees incurred in securing compliance from a tenant. In MTCC 933 v Lyn, 2020 ONSC 3853, the Court had to determine who would be responsible for the condominium’s legal costs after it successfully obtained a compliance order against a tenant who had been chronically making excessive noise.
In coming to its decision, the Court noted that section 134 of the Condo Act does not actually address the question as to who should pay in these circumstances: the owner or the tenant. Accordingly, the Court weighed the following factors regarding the tenant, and determined that it would not be equitable for the owner to be liable:
- The tenant was the one breaching the condo’s governing documents;
- The tenant was making excessive noise throughout the night, which was verified by representatives of the condo and logs kept by neighbours;
- The tenant received several written communications from the condo warning her to stop the noise;
- The tenant was given an offer to settle, which she declined.
Most importantly, however, the judge considered the fact that the condo had failed to inform the owner of the ongoing problems, all while demanding that the owner terminate the tenancy (while refusing to provide her with any evidentiary assistance to do so). In addition, the owner consented to the court order that the condo was trying to obtain.
In such circumstances, the Court concluded that it would be unfair to impose the compliance costs on the owner and ordered that the tenant pay the condo’s costs.
Make sure you inform the landlord owner of breaches
While condo owners renting their units out have an obligation to take “all reasonable steps” to ensure that their tenant complies with the Act and governing documents, it does not necessarily impose on them a strict liability for everything the tenant does.
Quoting from another case, the judge explains the reason why owners must be advised of their tenant’s conduct if we are going to expect them to resolve the situation (or face costs consequences):
… Put another way, it only stands to reason that the owner has to be notified of any unacceptable conduct on the part of the tenant if it is the owner’s responsibility to vouch for that conduct and to take reasonable steps to correct problems. In many, if not most, situations, the unit owner who is renting to a tenant does not live at the condominium complex. If the property manager of the complex does not inform the owner of tenant infractions, how can the owner live up to his or her responsibility to ensure that the tenant abides by condominium rules? It would be contrary to public policy to expect unit owners to become private investigators checking up on their tenants to see if they are breaching any rules. It makes much more sense for the condominium’s property manager to notify the unit owner of any significant or on-going breaches.
The lesson learned here, in cases of tenants breaching a condo’s rules, the corporation should keep the owner updated and involved, and should try to work with them to solve the problem. In addition, this is an important lesson for tenants that they may be on the hook for costs if they refuse to comply with a condo’s rules.
A potential practical difficulty with this ruling is that the Corporation may not be able to collect the costs awards by charging it against the unit as common expenses. Indeed, section 134 of the Act permits the corporation to charge back a compliance cost award (and all of its reasonable expenses incurred in securing compliance) against the unit and to collect it using mechanisms such as a lien. If the tenant is the one responsible to pay the costs award, the Corporation may have more difficulties collecting it.
To read the full case, just click on this link.
If you are running into compliance problems at your condominium, make sure to ask your favourite condo lawyer for assistance before taking any action.