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Court cases—Buying an altered unit

Wu v. PCC 245
Orr v. MTCC 1056


Jiakang Wu v. PCC No. 245
Superior Court of Ontario
Court File No: CV-14-146-00
Before : Justice Lemon
Date: 06 May 2015

What follows is sections of a far bigger court case that is dealt with in two other postings on this website. Ms. Wu says that she has been oppressed by PCC No 245 because the condo's elevators are causing excessive noise and vibrations in her unit.

One issue that the board used in their defence was that Ms. Wu's unit was altered by adding a small bedroom within the existing living room. This was done prior to her buying the unit.

If Ms. Wu made an error, it was in her failure to get written assurance from the board that they were aware of and approved the alterations before she agreed to buy the unit.

The Issue
Ms. Wu purchased Unit 10, Level 24 on February 28, 2008 for $158,000. Her unit is on the highest residential floor. It is a one-bedroom apartment with an enclosed room partitioned off from the original living room. The unit is 838 square feet. The mechanical, elevator, and HVAC equipment which service the entire building are located on the level above her unit.
 
Ms. Wu’s living room was altered to create a second bedroom/den. This occurred in 2006 or 2007. That alteration was done by one of the present board members.
 
Since February 28, 2008, Ms. Wu has owned and occupied the unit with her parents. For the first six months of their occupancy, they did not experience any problems with noise or vibration. However, in September 2008, noise and vibration began to affect Ms. Wu’s unit. After the problems started, Ms. Wu was unable to have them rectified by PCC 245 and was forced, along with her parents, to endure considerable aggravation, discomfort, and even illness.
 
The master bedroom is located furthest from the make up air unit and elevators. Ms. Wu’s parents occupy the master bedroom. The second bedroom is located closest to the make up air unit and elevators. It directly abuts the make up air unit and two elevators.
 
Ms. Wu’s living room as originally designed contained a window that opened to the outside air and light. The second bedroom is enclosed by drywall from the original living room and does not contain any windows that open to the outside.
 
Among the 278 residential units comprising the building, Ms. Wu’s unit is the only one with a bedroom directly abutting a make up air unit or an elevator.
 
Respondent’s position
PCC 245 submits that the second bedroom, therefore cannot be used as a “habitable room” or for “human habitation”, in contravention of subsection 42(3)(b) of The Corporation of the City of Mississauga’s Property Standards By-law. The second bedroom also violates the Residential Tenancies Act.
 
Ms. Wu is also in violation of Rule 7 under the “Safety” portion of Peel’s Rules and Regulations. Rule 7 states that a resident shall not permit his or her unit to conflict with any statute or municipal by-law.

The area of the unit converted for use as a bedroom required a smoke detector and the Code requires for the fire alarm, 75 decibel at bed-rest level.
 
The condo’s status certificate expressly states that a prospective purchaser is responsible for reviewing PPC 245’s declaration and description to determine whether any modifications have been made to the unit. Ms. Wu’s realtor advised her prior to her purchase of the unit that the original design had been altered.
 
Although two individual board members knew about the alteration shortly after it was completed in 2006-2007, it was never brought to the entire board’s attention or approved.
 
Ms. Wu was fully aware that the unit had been altered from its original design prior to purchasing it and that the altered second bedroom directly abutted the make up air unit and two elevators. The board asked Ms. Wu to consult with the City to resolve her non-compliance. To date, Wu has apparently taken no steps to contact the City.

The respondent has suggested that the noise and vibrations problems in Ms. Wu’s unit are the result of unauthorized/unapproved renovations, although the changes were undertaken by a condominium corporation director with the knowledge and acquiescence of other board members and prior to Ms. Wu purchasing the unit;

No enforcement steps have been taken against Ms. Wu with respect to her breach of the condo’s Rule 7.
 
By letters dated October 3, 2011 and December 5, 2011, Peel advised Ms. Wu that it would not do any work because her unit was alleged to be “non- standard”.
 
Judgment
In my view, the complaint by Peel regarding the second bedroom is a red herring with respect to the noise problem. While there may be a by-law infraction to be dealt with in another forum, it does not relate to this dispute. To the extent that PCC 245 tries to combine the two issues, that supports Ms. Wu’s allegation of unfairness.
 
The fact that there were no problems for six months is supportive of Ms. Wu’s case. First, subsequent reports show that there is a problem. Second, this shows that the addition of the new room (in 2006/07) before she moved in must not be cause for the noise complaint. It was there long before the noise problem started.

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Orr v. MTCC 1056
Ontario Superior Court of Justice
Court File No: 01-CV-206672CM
Madam Justice D.A. Wilson
Heard:  21-22 Sept & 24 Nov 2016
Date Released: 09 December 2016

Reasons for judgment on the issue of damages
The issue to be determined is the value of the  townhouse purchased by the Plaintiff Kelly-Jean Marie Orr [“Orr”] at 2289 Lake Shore Boulevard West as a two-storey unit and as a three-storey unit as of December 2, 2014 [“the valuation date”].

Orr bought townhouse 113 at the Grand Harbour development in September, 1997 and the transaction closed in January, 1998 with a purchase price of $955,000.  It was described as a three-storey unit and that is what Orr believed she had purchased. Later, it became clear that the third storey was illegally built into the common element space. The Court of Appeal fixed the damages as the difference between the value of unit 113 as a two-storey condominium and as a three-storey unit as of the valuation date.

At the trial of an issue, the Plaintiff, the Defendant Gowling Strathy & Henderson [“Gowlings”] and the Defendants Brookfield LePage Residential Management Services Ltd, Patrick Post, and Pamela Cawthorn [“Brookfield”] each called an expert appraiser who testified about the value of the property as of the valuation date. All of the experts were properly qualified.

The Plaintiff’s Expert
Dino Bottero [“Bottero”] was retained as an expert by the Plaintiff.

Brookfield’s Expert
Agnes Lee [“Lee”] provided an expert opinion on behalf of Brookfield.

Gowling’s Expert
 Jim Parthenis [“Parthenis”] was the expert retained by Gowlings.

Expert
1998 price
3-storey
2-storey
Difference
Orr
$995,000
$1,900,000
$1,435,000
$465,000
Gowling

$2,260,000
$2,080,000
$180,000
Brookfield

$1,157,400
$1,017,960
$140,000

Analysis
While the appraisals of townhouse 113 by the experts retained by the Defendants differ by more than a million dollars, their opinions as to the loss of the third floor are only $40,000 apart. That is due to their shared view that the third floor in a unit as large as the Plaintiff’s doesn’t make a significant difference the value of the property. I do not accept this perspective. Rather, I prefer the opinion of Bottero on this issue; the third floor added to the charm and unique quality of townhouse 113, it is an integral part of the unit. ...Townhouse 113 without a third storey is, simply put, not the same condominium.  Its loss is not trivial to the overall value of the unit.

In my view, the most reliable opinion on the value of the loss of the third floor of unit 113 is that of Bottero.  His research was thorough, his analysis was well-founded and his opinion was not undermined on cross-examination in the same way that the opinions of Lee and Parthenis were.  I accept the opinion of Bottero as to the valuations of the unit and therefore find that the loss of the third floor of the Orr townhouse as of December 2, 2014 is $465,000 and I fix the damages of the Plaintiff in that amount.


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