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Court Orders Owner to Enter into a Section 98 Agreement

by: Editor |

In my last post, I blogged about a case where the court sided with the owners after having found that the condo corporation treated them unfairly in the context of a dispute involving modifications to common elements. Again, in Durham Condominium Corporation No. 43 v. Bradley, the court had to deal with a dispute involving modifications to common elements. However, this time, the court sided with the condo corporation.

Factual Background

In August 2017, the property manager discovered that a large deck had been installed in the backyard of unit 172. It was estimated that the deck covered at least 40% of the rear yard.

Since the backyard is a common element, management wrote to the owner and requested that he enter into a section 98 agreement with the condo corporation. The purpose of that agreement was to deal with the deck and to comply with the requirements of the Condominium Act and the Declaration. The owner did not respond to the request.

The condominium corporation then escalated the matter to the corporation’s lawyer, who wrote to the owner requesting, once again, that he enter into a section 98 agreement. This time the owner responded, but took the position that he would remove the deck once the corporation comply with its obligations to repair and maintain the backyard.

The condo corporation commenced a court application to obtain an order directing the owner to enter into a section 98 agreement for the deck installed in the backyard of his unit.

The Court’s Decision

The court recognized that a unit owner can only make an alteration, addition, or improvement to common elements after having obtained the consent of the corporation and after having entered into an agreement with the condo corporation with respect to same. The court found that the deck constituted an alteration, addition or improvement to the common elements and was therefore subject to section 98 of the Act.

While the court was sympathetic to the owner’s position, at the end of the day it found that a section 98 agreement was required. The court dismissed the owner’s arguments that the deck was necessary to render the backyard useful, that the deck would be removed prior to selling the unit and that the corporation’s request for a section 98 agreement constituted harassment.

The court concluded as follows:

Moreover, just because other tenants were able to circumvent the requirements of the Act and Declaration does not mean the requirements have been waived. No doubt, if there was clear evidence to indicate that the [Corporation] was seeking enforcement purely as a means to harass the [Owner], a court would not likely assist in the request. However, in this case, it is clear that a section 98 agreement is required and the request is more than justified in the circumstances. I do not accept the [Owner’s] position that the request has been made by the board purely to harass them.

The Court ordered that the owner enter into a 98 agreement with the corporation with respect to the deck or that the owner remove the deck within 30 days, failing which the corporation could remove the deck and charge the costs of doing so to the unit as common expenses.

What’s a section 98 agreement?

A section 98 agreement is required when an owner wishes to make a modification to the common elements. This agreement, between the corporation and the owner will:

  • allocate the cost of the modification (between the owner and the corporation), and, amongst other things,
  • set out the respective duties and responsibilities between them, including the responsibilities for the cost of repair after damage, of maintenance and of insurance.

The agreement must be registered on title and binds the current and any future owners.

Conclusion

This case reminds us, once again, of the importance for condo corporations and owners to enter into a section 98 agreement. As the occupier of common elements, the failure of a corporation to insist on such an agreement may result in potential liability. A section 98 agreement establishes the rights and obligations of the owner versus the corporation and ensures predictability. At the end of the day, owners cannot unreasonably refuse to enter into a section 98 agreement; otherwise they may face consequences.

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