Part 16 published on 01/11/06
In a common elements condominium corporation, a common expense sharing formula that allows potls to avoid contributions until they reach a certain level of development is not oppressive or prejudicial
This case dealt with common expense sharing in a common elements condominium corporation.
[A common elements condominium corporation contains common elements (in this case, a ring road) but no units. Parcels of land are “tied” to the common elements condominium corporation and these parcels are called “potls”. The potls are responsible for the common expenses of the corporation.] In this case, the potls of the common elements condominium corporation included developed as well as undeveloped (or yet to be developed) lands. The developed potls included two vacant land condominium corporations. The vacant land condominium corporations objected to the cost-sharing formula in the Declaration for the common elements condominium corporation. They claimed that the formula was oppressive. The Declaration created a bifurcated expense formula which had the effect of saddling the developed lands with higher common expenses pending development of the other potls.
The Court noted that this formula clearly favoured the interests of Schickedanz (which held the undeveloped potls) at the expense of the other potls. However, the Court went on to say: “but in our view, it does not necessarily follow that this conduct was either oppressive or highly prejudicial. This formula was created before the unit holders [in the vacant land condominium corporations] purchased their property [ie. was fully disclosed to purchasers] and since the impugned provisions of the Declaration do not violate the Act, there can be no grounds for finding that Schickedanz acted oppressively.”