Part 38 published on 01/05/12
Owners have the right to assert certain types of claims respecting the common elements
The owner had asserted claims against the developer. The claims related to the developer’s alleged failure to fulfill certain terms of the purchase agreement between the owner and the developer. The claims at issue related to exterior doors, windows and walls, which formed part of the common elements.
The condominium corporation had asserted a separate claim against the developer, for various common element deficiencies. That claim had been settled. The Ontario Divisional Court held that the owner had no legal capacity to assert claims in relation to the common elements. [The decision of the Divisional Court can be found in Condo Cases Across Canada, Part 33, February 2011. The Divisional Court reversed the lower Court decision summarized in Condo Cases Across Canada, Part 30, May 2010.]
The owner appealed to the Court of Appeal. The question for the Court of Appeal was: Does Section 23 of the Condominium Act, 1998 give condominium corporations exclusive rights to assert claims in relation to the common elements? The Court of Appeal said “no”, owners have the right to assert certain types of claims in relation to the common elements. In particular, the Court said:
(Section 23) does not preclude an individual condominium unit owner from pursing a claim relating to common elements where what is at issue is a contractually unique problem or other unit-specific wrong raising a discrete issue relating to common elements immediately pertaining to the owner’s unit.
[Editorial Notes:
1. In the decision, the Court of Appeal also says that any claims asserted by the condominium corporation must have “broader implications for the condominium community as a whole”. But I don’t believe that Section 23 is limited in that way. Section 23 clearly allows condominium corporations to assert claims “in whole or in part on behalf of any owners in respect of their units” (in which case the owners must appropriately share the costs of the claim). And the Court of Appeal (elsewhere in the decision) acknowledges the possibility that claims by a condominium corporation and an owner could overlap – requiring a stay of one of the claims. This issue (respecting the rights of condominium corporations to assert claims) is not clearly tied down in the decision.
2. There was no discussion, in the decision, of the possibility that the settlement of the corporation’s claim may have also served to settle aspects of the owner’s claim. Presumably the settled claims did not overlap with the owner’s claims.]