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Case Analysis: Powers of a Condominium Corporation

In a recent case, Cheung v. York Region Condominium Corporation No. 759, 2017 ONCA 633, the Court of Appeal dealt with the scope of the powers of a condominium corporation under the Condominium Act, 1998. In that case, a condominium corporation passed a by-law to restrict parking in common element parking spaces in a commercial condominium complex. The by-law provided that the respondent condominium corporation could from time to time grant a lease of four parking spaces to each owner in the common element parking spaces on such terms and conditions as may be deemed appropriate by the Board of Directors from time to time. The by-law effectively allocated four of the common element parking spaces to each owner. The appellant, whose tenant operated a restaurant and wanted to use all of the common element parking spaces, brought an application for an order that the by-law was invalid and that the condominium corporation’s conduct in passing the by-law was oppressive, and then appealed the dismissal of her application at the lower court level.

The appellant argued that the by-law was invalid because it in effect created “exclusive use common elements,” which are supposed to be set out in a declaration pursuant to Section 7(2) of the Condominium Act, 1998. The Court of Appeal rejected the argument that the by-law created exclusive use common elements on the basis that (1) the by-law did not have the necessary degree of permanence, as it could be repealed or varied at any time; and (2) all unit owners reasonably share the parking spaces in that there is no expectation that any other unit owner would ever use that space or that the right to use the space would pass with ownership of the unit. The Court of Appeal therefore held that the by-law was not beyond the powers of the condominium corporation.

With respect to the allegation of oppression by the condominium corporation, the Court of Appeal agreed with the conclusions of the lower level court that the by-law was reasonable and was not oppressive and that the appellant’s expectation that she should be able to use all of the common area parking spaces was unreasonable and amounted to an allegation that the board acted unfairly by not giving her special parking privileges not enjoyed by other owners.

It is notable that one of three Judges of the Court of Appeal dissented from the ruling. Justice Weiler, in dissent, held that the lower court erred in not examining the actual wording of the by-law to ascertain if it was valid. Justice Weiler held that proper consideration of the wording and history of the by-law reveals that it purported to lease the parking spaces on a permanent or potentially permanent basis, effectively creating “exclusive use” common element parking spaces, which can only be designated through the declaration.

This case provides an interesting analysis of the powers of the board of directors of a condominium corporation and also what constitutes acceptable treatment of unit owners.

Blog post written by Associate Lawyer Robert Di Lallo.