14/08/2019 – Jurisdiction Ontario
Part 67 published on 01/09/2019
Owner liable for costs incurred by condominium corporation in defending unwarranted claim by owner’s tenant
The owner’s tenant asserted an unwarranted claim against the condominium corporation. The condominium corporation promptly warned the owner that, under Condominium Law, the owner could be held responsible for all costs incurred by the condominium corporation to defend the claim, and urged the owner to convince the tenant to withdraw the claim. The owner failed to take any action to try to persuade the owner to withdraw the claim.
The tenant’s claim was dismissed (at first instance and on appeal), with costs awarded to the condominium corporation. At the conclusion of the legal proceedings, YCC 187 demanded that the owner pay both the Court ordered costs as well as the condominium corporation’s additional legal costs in relation to the matter. The owner refused. YCC 187 registered a lien against the owner’s unit for recovery of those amounts. YCC 187 brought an application to enforce the lien.
The Court determined that the lien was valid and granted orders allowing for enforcement of the lien. The Court said:
Section 134(5) of the Condominium Act states that if a corporation obtains a costs order against either an owner or an occupant of a condominium unit, the costs of the litigation must be added to the common expenses for that unit. Article 14 of YCC 187’s By-Law No. 4 says the same thing. The Condominium Act required Justice Penny to order that the costs be added to the common expenses of Ms. Sandhu’s unit despite the fact that she had not authorized Mr. Saadilla (the tenant) to file the lawsuit.
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The only one who was able to stop Mr. Saadilla was Ms. Sandhu. She could have terminated his tenancy. She could have tried to intervene in the litigation. At very least she could have written to YCC 187 to advise them that she opposed the lawsuit and that Mr. Saadilla did not have her permission to sue the corporation. She did not do any of these things despite repeated warnings from the corporation.
The Condominium Act protects the innocent unit owners by imposing punishing measures on unit owners who create or permit litigation costs to arise. These punishing measures provide a powerful incentive to owners to avoid litigation altogether or to pay off the costs of the litigation immediately so that they do not become a burden on other property owners.