A recent Ontario Court of Appeal decision has shifted the balance in the battle for use of common elements in condominiums, forcing a board of directors to pass a rule in order to ban the installation of hot tubs.
“I guess everybody thought that the wording was broad enough in the legislation to include the installation, or the putting down of, a hot tub,” says Miller Thomson LLP associate counsel and condo law expert Audrey Loeb. “I can honestly say that in a million years, it never occurred to me that a hot tub would not be considered installed on the common elements.”
The case centres on a battle between Jim McMahon, a 73-year-old retiree, and the board of directors of the Waterdown, Ont., condo corporation. Despite the requirement in s. 98 of the Condominium Act for an owner to get the board of directors’ stamp of approval before making “an addition, alteration, or improvement” to common elements, McMahon went ahead and installed a hot tub on his backyard patio in December 2007.
He argued the installation didn’t meet the threshold that would require him to get the board’s OK, an argument Superior Court Justice Joseph Henderson accepted. So, too, did the appeal court panel, led by Justice James MacPherson, in a recent decision.
McMahon owned one unit among 31 townhouse-style dwellings that form the condo complex. His decision to install the hot tub ran counter to the wishes of the condo board, which had previously denied his request to set up the roughly two-metre-long apparatus, which McMahon said would help relieve his arthritis. The tub is linked to his house via an electrical panel in the basement.
The board responded by moving for a court order to force the tub’s removal. Henderson, the motions judge, consulted the dictionary to determine the definitions of the key words add, alter, and improve.
According to the appeal court ruling written by MacPherson for fellow justices Stephen Goudge and Robert Blair, Henderson ruled “that the word addition means something that is joined or connected to a structure, and the word alteration means something that changes the structure.” The word improvement, said the judge, “refers to an improvement or betterment of the property. That is, to be an improvement, there must be an increase in the value of the property.”
The judge determined that the hot tub didn’t fit those definitions, thereby ruling McMahon didn’t have to get the board’s approval to install it and dismissing the application.
At the Court of Appeal, the condo corporation argued the judge had misinterpreted the meaning of the terms in the context of the act. MacPherson disagreed, saying the appellants were off base by trying to “lump together” the words and push for an overly broad definition.
“Barbecues, picnic tables, small inflatable swimming pools, children’s toys, and thousands of other ordinary articles that are regularly found on backyard patios would constitute ‘changes’ to the common elements of the condominium property under the appellant’s definition because they would ‘make different the pre-existing condition of the common elements,’” wrote the judge.
MacPherson went on to comment: “In my view, the application judge’s interpretation of s. 98(1) of the act strikes an appropriate balance between the rights of individual owners and the rights of the owners collectively speaking through their board of directors.”
Loeb calls the decision “counterintuitive to what the Condominium Act intended.”
“I was very disappointed in the outcome, really disappointed as a lawyer who represents condominium corporations,” she says.
She notes the act aims to give boards control of what people do in common areas, such as McMahon’s backyard patio. People are free to make changes in those areas as long as they reach an agreement with the corporation, according to s. 98.
But the decision now forces condo corporations to take steps to regain the control they thought they had over the common areas, including balconies in high-rise buildings.
“Every condominium corporation is going to have to contemplate what every potential owner might do in terms of making some kind of addition or putting something on their common elements,” says Loeb. To that end, the boards will have to create a rule that tries to identify any possible item a resident could try to place in the common areas.
Loeb says she will soon urge her condo board clients to do just that and suggests they move quickly to pass those rules. Any installations in place before those rules take effect will be grandfathered, preventing the corporation from forcing their removal.
Harvin Pitch of Teplitsky Colson LLP, which represented McMahon, says the condo board was missing a key distinction in its interpretation of the act, namely that the requirement to get board approval for improvements to common elements relates to the improvement of property, not the enjoyment of it.
“If you want to add to the thing and you want to add to a common element [and] build on it, that’s one thing,” says Pitch. “If you want to put flower pots, barbecues, and hot tubs, that’s enjoyment of property. That’s not covered by the act, and so you deal with it in the rules.”
Pitch suggests the matter really comes down to his client’s democratic rights through the condo corporation to argue his case by way of a vote of its members. He says the board tried to circumvent that process through a forced interpretation by the courts.
The case highlights many condo owners’ general lack of understanding of just how restricted they are in the use of common elements, says Daniel Resnick, a Teplitsky lawyer who worked with Pitch on the case. That is particularly true for the influx of elderly people who are moving into condos after a lifetime in freehold homes, he adds.
But Loeb suggests there was good reason for the legislature to give condo boards broad discretion to control common elements. Most condo residents don’t want hot tubs in those areas, for example, because they attract loud, alcohol-fuelled, late-night gatherings, she says.
However, Loeb doesn’t think boards should say no to requests unless they have a solid reason for it. But many boards are loath to spend the time and money on consulting a lawyer and creating necessary agreements with unit owners, she says.
“My view is that boards of directors, if they properly protect themselves, should allow them. Then if the unit owner creates problems and breaches the rules, you get rid of the whirlpool.”
Erik Savas, a lawyer with Simpson Wigle Law LLP in Hamilton who represented Wentworth Condominium, suggested the ruling could prompt an increase in litigation.
“This might mean that judges, as opposed to boards of directors, will increasingly become the arbiters of what changes are acceptable in any given condominium community and what are not,” said Savas in a prepared statement. That’s unfortunate, he said, because the appeal court had previously stated that condo boards should have deference in these circumstances.
Wentworth Condominium is considering whether to seek leave to appeal from the Supreme Court, said Savas.