September 2023
The Ontario Legislature intended mediation to be the first choice to address disputes arising in a condominium community. When disputes arise between management and a resident, mediation should be offered as an alternative before involving legal counsel or sending legal notices.
One condominium corporation chose to ignore mediation and the case came before an Ontario Superior Court Judge who was exceptionally clear about his thoughts regarding how the condominium corporation and legal counsel had acted.
The Judge hopes his ruling will help “bring the message home to property managers and condominium boards that there is not only a better way but the corporation’s constating documents are required to provide for it and there are consequences to ignoring it.”
The Judge hopes his ruling will help “bring the message home to property managers and condominium boards that there is not only a better way but the corporation’s constating documents are required to provide for it and there are consequences to ignoring it.” He further states it is “lamentable that management companies seek to take advantage of the fact that so many condominium owners are quite unaware of their right to proceed through mediation despite the obvious priority the Legislature intended to give to this dispute resolution mechanism. “
The dispute was about excessive noise during a six-month period that included barking, loud music in the early morning hours, and drilling in the evening. The resident was not informed of complaints or problems until receiving a “cease and desist” letter and demand for payment of legal fees of $1,369.34. Subsequent legal letters, bills and payment demands followed. Two years later, this dispute ended up in court with legal fees of $20,000 claimed by the condominium corporation. The corporation sought possession of the unit so it could be sold. The Judge describes this as “an object lesson in how not to resolve disputes in a communal living situation.”
There was no documented breach of condo rules or justification for the legal demand letters.
Section 132(1) of the Condominium Act establishes a process for resolving disputes. It requires that every agreement “shall be deemed to contain a provision to submit a disagreement between the parties with respect to the agreement to (a) mediation….and (b) unless a mediator has obtained a settlement between the parties with respect to the disagreement, arbitration.”
Commenting on the corporation’s legal letters, the Judge states “I have no doubt that the poisoning of the relationship between owner and management that came in the aftermath of the first letter created the conditions of tension and friction that contributed greatly to the two that followed.”
In his Reasons for Decision, the Judge made numerous statements worthy of sharing:
“What is plain and obvious to me is that these disputes have been escalated almost on autopilot instead of being sensibly de-escalated and resolved. The plaintiff moved from lawyer’s letters with demands for payment of the resulting invoices to filing a lien to bringing this law suit to evict the defendant from her unit to sell the unit to satisfy the lien with barely a pause to consider whether this was in any way the most efficient and proportional way of defusing the situation. Each step was taken on a unilateral basis and it is hard to step back and describe any of this as being in any way preferable or more efficient than following the agreement that the law mandates and submitting the dispute to mediation instead.”
“In effect, a unilateral decision to send a bill for over $1,000 for a lawyer’s letter has escalated to more than $20,000 in alleged liens and a motion to gain vacant possession for the purpose of enforcing the lien. A mountain has been erected out of what began as a mere molehill. None of this was necessary.”
“This fiasco has gone on long enough. The root of the problem is the ill-advised decision to escalate this dispute to an “on the meter” legal level with an ever-increasing conveyer belt of demands for legal fees instead of deescalating it through mediation as the Legislature plainly intended to occur. “
The case, which can be found here, was dismissed and sent to mediation which is what should have happened.
