York Condominium Corp. No. 78 v. Stein, 2016 ONSC 1837 is a recent decision of the Superior Court of Ontario which should serve as a reminder that an owner’s right to mediation and/or arbitration under section 132 of the Condominium Act (Ontario) (the “Act”) is not absolute. In some circumstances, a corporation will be well within its rights to bring an application before a court without attempting alternative forms of dispute resolution.
In this case, York Condominium Corp. No. 78 (“YCC 78”) received complaints from the unit owner, Stein, of exterior water penetration into her unit. Upon investigation, YCC 78 discovered that Stein had carried out extensive renovations to the unit and common elements throughout her unit. She had not sought the permission of the corporation for these modifications, as required by the Act or the condominium governing documents.
Stein was living in the unit but had “gutted” most of it. She had no functioning bathroom or kitchen. She had also replaced most of the wiring and plumbing herself. Many changes affected the common elements and included:
- removal of plaster and insulation from an exterior wall;
- installation of an electrical plug box;
- removal and reconstruction of electrical and plumbing connections;
- removal of parquet flooring (exposing concrete slab); and
- the heating radiator system had been tampered with and covered in plastic.
YCC 78 went to court seeking a declaration that Stein was in breach of several sections of the Act. Additionally, it asked the court for a compliance order granting it access to her unit to restore unauthorized additions and/or alterations to the unit and common elements.
In court, Stein argued that YCC 78 should not have proceeded to Ontario’s Superior Court of Justice before invoking the mediation and arbitration processes set out in section 132 of the Act. The court, however, rejected her argument relying on several prior decisions. The court was persuaded that the right to mediation and/or arbitration is more restrictive than many believe. The language in section 132 only applies to lesser disputes or disagreements arising out of the interpretation, application, or non-application of declarations, by-laws, or rules. It does not include breaches of the Act or disputes relating to it. In contrast, Stein’s conduct amounted to unilateral and unauthorized changes (many to the common elements) and did not qualify as a lesser dispute for the purposes of section 134(2).
YCC 78 was granted an order allowing it to inspect the unit and restore any unauthorized additions or alterations that had been made to the common elements. Stein was also ordered to pay the corporation $25,000 in costs.
In deciding how to proceed against a unit owner, who is in contravention of the Act, or governing documents of a condominium corporation, do not assume that all matters must proceed by way of mediation and/or arbitration. Where appropriate the courts may offer the fastest relief.