March 2019
When a condo owner or resident is in breach of corporation governing documents the condo corporation is expected to take action to ensure compliance. These actions may require that the corporation incur costs to enforce compliance.
Most condo declarations require that a condo owner indemnify or reimburse the Corporation for costs that have been incurred. This practice is equitable in that it does not require other owners to contribute to enforcement costs against a single condo owner.
Indemnification is viewed as reasonable when any breach of governing documents is clear and unambiguous. The breach should be clearly attributable to the owner for which it is claimed.
Breaches of governing documents tend not to be clear and unambiguous when condo corporations fail to enforce their governing documents consistently and equally against all condo owners. When one or more owners can show that enforcement is inconsistent or that favourable treatment is provided to some owners it can be more difficult to enforce indemnification.
A more difficult situation may arise when a Board uses an indemnification clause in an attempt to silence or penalize condo owners trying to provide factual information to condo owners that may not have been fully communicated by a Board. This is one example where a claimed breach of governing documents may not be clear and unambiguous.
