Sometimes decisions are rendered by the Courts that have a significant impact on the entire condominium community. One such recent decision of the Ontario Court of Appeal will require that all condominium corporations consider how they control what owners do on exclusive use common elements, whether they are parking and storage spaces, back or front yards, or patios and balconies.
S. 98 of the Condominium Act allows owners, with the permission of the board of directors, to make additions, alterations or improvements to the exclusive use common elements. Condominium corporations have relied on this section to provide them with a vehicle for controlling what unit owners put on exclusive use common elements. In the case before the courts, the unit owner had installed a hot tub on his exclusive use common elements, without the approval of the board of directors. The corporation did not have a rule prohibiting owners from installing hot tubs. The board assumed that the installation of a hot tub was an addition, alteration or improvement to the common elements and therefore fell within the scope of S.98.
Because this was considered a breach of the Act, the corporation commenced a proceeding in Superior Court for an order that the hot tub be removed.
At trial the judge found that the placement of a hot tub on the exclusive use common elements did not constitute an addition, alteration or improvement to the common elements.
The trial judge found “that “an addition” means something that is joined or connected to a structure and the word “alteration” means something that changes the structure.
… the word “improvement” means the betterment of the property or enhancement of the value of the property. I also accept that an “an improvement” refers to an improvement or betterment of the property.”
Unfortunately this conclusion was upheld at the Court of Appeal.
In our opinion, the court “got it wrong”. The purpose of S.98 was to ensure that owners did not have the right to put anything they want on the exclusive use common elements without ensuring that the board approves of the placement, and where appropriate, an agreement is entered into between the owner and the corporation to protect the corporation and the interests of other owners.
We believe that in this case, the board of directors was unwilling to allow the installation under any circumstances. In our opinion, the board has this right. Just because an owner wishes to install or place something on the common element, does not mean that a board of directors has to approve it, if acting reasonably, the board believes it is not good for the community.
The consequence of this decision is that condominium corporations can no longer rely on S.98 to control what owners can put on the common elements.
Boards will need to pass rules prohibiting owners from putting anything on the exclusive use common elements without the board’s permission and/or check what is in the corporation’s declaration to determine if there is a provision which will protect the corporation from the impact of this decision.