New Tribunal Rules on Owners Accessing Condominium Records
Six months after its inauguration, the Condo Administrative Tribunal is issuing its first decisions. For now, the Tribunal’s jurisdiction is limited to disputes related to condominium records. In this post, we explore what we can learn from the first 5 decisions of this new tribunal.
The Condo Tribunal
The Condo Authority Tribunal is a new online tribunal operating under the Condo Authority of Ontario. This Tribunal was set up to help settle and decide on condo-related disputes in Ontario. As of November 1, 2017, and until now, the Tribunal’s jurisdiction is limited to dispute about condo records.
You can learn more about the Tribunal here.
Owners’ Right to Access Condo Records
Section 55 of the Condo Act regulates a corporation’s obligation to retain and give access to owners to some of its records. This section provides a non-exhaustive list of the records a corporation shall maintain. It also regulates who can examine or obtain copies of these records and the consequences of a Corporation not granting access to these records.
Trends
So far, the Tribunal has issued 5 decisions. The following are some of the emerging trends:
- 3 cases are from the Greater Toronto Area; one from Kingston and one from Ottawa;
- The records being sought usually covered a period of two years or less. In some cases, however, they covered a period of 91 months and in the case of certain contracts, the request covered a period of 7 years!
- In all cases, the owner seeking access to records was self-represented;
- In all cases, the Corporation was represented by an agent or a lawyer;
- Most cases were heard in writing only and 2 cases included a teleconference;
- On average, the written submissions spanned over 30 days;
- On average, the decisions were issued within 30 days of the start of submissions.
Not that anyone is keeping scores, but below is a tally of the results:
- In one case, the Corporation agreed to grant access to the records sought;
- In another, the Tribunal concluded that the owner already had received the records he was entitled to;
- In 2 cases, the Corporation was ordered to disclose more records (see here the Mohamed case and the Remillard case);
- In the final case, the Tribunal dismissed the matter without even holding a hearing on the basis that the application was frivolous, vexatious and not initiated in good faith. While this case raises very interesting legal issues, it may be an outlier (at least one would hope).
Guiding Principles
It’s still early in the game but we can perhaps start to see the following guiding principles emerging from these decisions.
What Documents are Owners entitled to?
The following list, while obviously non-exhaustive, shows the records that owners appear to be entitled to:
- The list of owners and mortgagees (more on this further below);
- Budgets for the current year;
- Audited financial statements;
- Auditor’s report;
- Monthly financial bank statements;
- Current plan for future funding of the Reserve Fund;
- Records concerning expenditures from the Reserve Fund;
- Invoices, including legal invoices (with redaction);
- Minutes of board meeting;
- Management contracts, building contracts, insurance contracts, …
If there was some uncertainty under the prior version of the Act, it is now clear that owners are entitled to access the list of owners and mortgagees maintained by the Corporation under section 46.1 of the Act. This list contains the name of the owner, the unit identification and the owner’s address for service (there appears to be an odd exception if the address of service is outside of Ontario). In our view, owners are not entitled to access the phone number or email address of other owners and mortgagees.
Redaction of documents
The Remillard case focuses on the extent of redaction allowed to be made on records. Indeed, while the new Act promotes transparency and an “open book” approach, corporations must also balance this with other owners’ right to privacy.
The Act specifically provides that owners are not entitled to certain documents or certain information. For instance, owners are not entitled to:
- records relating to employees of the corporation (except employment contracts);
- records relating to actual or contemplated litigation or insurance investigations involving the corporation; and,
- records relating to other specific units or owners.
The Remillard case discusses at length whether a corporation is entitled to redact legal invoices. The adjudicator (rightfully in our opinion) concluded that a corporation is entitled to redact its legal invoices when they contained privileged information, when they deal with actual or contemplated litigation or when they deal with another owner.
Can Condos Charge a Fee to the Owner seeking the records?
In many cases, corporations are entitled (but not required) to charge a fee for the copies and for the labour involved in preparing and allowing for the examination of records.
Corporations are entitled to have the fee paid prior to the delivery of the requested records. When such fee is charged, the corporation cannot demand that the owner pay the fee to a third party. It must be paid to the corporation (who can then pay the third party who did the work, should that be the case).
The actual charge for printing or photocopying shall not exceed 20 cents per page and any labour cost must be reasonable. Two of the cases give us some clues as to what is considered a reasonable fee:
- In the Mohamed case, the adjudicator slashed the hourly rate being charged by the corporation from $63/hour to $31.50/hour – which is noted to be more than twice the minimum hourly wage in Ontario.
- In the Remillard case, the adjudicator accepted that an articling student (but not a lawyer) was required to review and redact the legal invoices being requested. The adjudicator then calculated the fee using a rate of $130/hour.
Undoubtedly, what is considered a reasonable fee will vary depending on the extent and nature of the documents being requested.
Penalties being imposed on the corporations
The Condo Act provides that a penalty may be imposed on a corporation who, without reasonable excuse, does not grant access to, or copies of, its records. Under the former version of the Act, this penalty was fixed at $500 and was to be sought in Small Claims court. Under the current version, the penalty can be up to $5,000 and can be awarded by the Tribunal.
So far, only one case resulted in a corporation being ordered to pay a penalty for its failure to grant access to records. In the Mohamed case, which was found not to involve the most egregious or improper conduct on the corporation’s part, the adjudicator concluded nevertheless that the corporation either willfully disregarded the request or chose to remain wilfully blind to the legal requirements in relation to the request for records. For this reason, the Tribunal ordered the corporation to pay a pen$1,000. The adjudicator wanted the penalty to be substantial enough to act as a reminder to the corporation to apply more care and diligence and to be more mindful of its legal obligations when responding to an owner’s request for records.
Costs of the hearing
The Tribunal has the authority to order a party to pay the costs (but not the legal fees unless there are exceptional reasons to do so) of another party to the proceeding. Such an order could be made when a party’s behavior during the Tribunal’s process is either unreasonable, improper or when it causes unreasonable delay.
In the Mohamed case, the adjudicator ordered the corporation to pay costs in the amount of $125 because it had refused to participate in the Tribunal’s online dispute resolution.
In the Remillard case, the corporation sought to recover legal fees exceeding $10,000. The corporation did not use a lawyer at the hearing but these fees were likely incurred prior to it. The corporation argued that this litigation was unnecessarily complicated by the owner and that it would be inequitable and unjust to impose this cost on innocent owners when the corporation was successful (at least in part). The adjudicator refused to award cost to any of the parties.
It is unclear why the Tribunal did not impose costs on the Sennek case (the one which was dismissed as being an abuse of process).
Undoubtedly, many more cases will be heard and adjudicated by the Tribunal. With time, we may be able to discern emerging principles, which (hopefully) will help parties resolve record disputes without requiring a hearing.