Whitehorse Condominium Corp. No. 95 v. 37724 Yukon Inc. (Yukon Supreme Court)

For several years, while in effective control of the condominium corporation, the developer had not paid common expenses on the unsold units (owned by the developer).  The condominium corporation subsequently liened each of the developer’s units and sought judgment determining the amounts owed by the developer under the liens.  The Court ruled that:

• The developer was obligated to pay common expenses in relation to the unsold units.  There had been no agreement to the contrary, and the condominium corporation was not estopped from claiming the arrears.

• The amount owed by the developer should be based upon the unsold units’ proportionate share of the actual expenses of the condominium corporation (during the period of non-payment), rather than based upon budgets for the same period.

• The condominium corporation was also legally entitled to recover penalties and interest, but the Court relieved the developer from having to pay the penalties. 

The Court also said:

• It is fair to the unit owners who perhaps paid more than they should have if the amount owing by the Condo Developer could be used to rebate past condominium fees of unit owners, create a reserve, or both.  In this way, the Condo Developer is accountable to the unit owners without creating a windfall that would be unfair or excessive compared to the actual expenses incurred.

• The applicable limitation period was 10 years (under s. 11(1) of the Limitation of Actions Act) rather than 6 years (under s. 2(1)(f) of the Limitation of Actions Act).  The Court said that the claim for common expenses was “in effect a debt charged on land and specifically excluded from the six-year limitation in s. 2(1)(f) but covered in s. 11(1) setting out the recovery of money charged on land”.