Section 134.(5)

Bill 106 should repeal this vicious subsection, Bill 106 not make it worse.

There are too many boards that will avoid compromise with an owner that they have taken a dislike to and instead will deliberately drive up the legal costs believing that Subsection 134.(5) will make the condo owner pay all of their costs. So the higher the legal fees, the better they like it.

Section 134.(5) in the present Act
Addition to common expenses
"If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit."

So if an owner loses, they can be hit with costs that have run up to $150,000 on top of their own legal costs. Plus, unless the judge rules otherwise, the condo corporation can demand immediate payment in full.

If the owner wins, the condo corporation only has to pay the owner substantial or partial costs, depending on the case and the judge.

Bill 106
113. (1)  Subsection 134(1) of the Act is repealed and the following substituted:

Compliance order
134 (1)  Subject to subsections (2) and (2.1), an owner, an occupier of a proposed unit, a corporation, a declarant, a lessor of a leasehold condominium corporation or a mortgagee of a unit may make an application to the Superior Court of Justice for an order enforcing compliance with any provision of,

(a)	this Act, the declaration, the by-laws or the rules; or
(b)	an agreement that two or more corporations have entered into to share in the provision, use, maintenance, repair, insurance, operation or administration of any land, any part of a property or proposed property, any assets of a corporation or any facilities or services.

So now both the owners and the corporation can take the other to Superior Court to apply for a compliance order under Section 134. In addition, so can two or more corporations who have a shared facilities agreement.

(5)  Subsection 134 (5) of the Act is repealed

(2)	Subsection 134 (2) of the Act is amended by striking out “available” and substituting “required”.
(3)	Section 134 of the Act is amended by adding the following subsection:

Non-application
134.(2.1)  This section does not apply to any matter in dispute for which a person may apply for resolution under Section 1.36 to the Condominium Authority Tribunal established under Part I.2, if the Tribunal has been established under that Part.

and the following substituted:
Addition to common expenses
134.(5)  If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the contribution to the common expenses payable for the unit.

This is the same nasty subsection that exists in the existing Act. If the owner doesn't pay up within 90 days after the due date, the condo corporation can lien the unit and sell it under power of sale.

Additional costs of owner
134.(6) If an owner of a unit obtains an award of damages or costs against a corporation in an order made under subsection (1), the owner is entitled to recover from the corporation any additional actual costs incurred in obtaining the order.

So this seems to even things out by allowing an owner who gets court orders against the condo corporation to recover all costs. On the surface this sounds reasonable but when an owner serves the corporation with an application, most likely the corporation will counter with their own application looking for court orders and the legal costs both both sides will go to the moon.

Set-off against common expenses
134.(7) If the corporation does not pay the amount an owner is entitled to under subsection (6) within the prescribed time, the owner may set off the amount against the contribution to the common expenses payable for the owner’s unit.

So if the corporation wins court orders, unless the judge rules otherwise, the owner must pay the corporation's full costs immediately. Under this sub-section, the owner can recover his costs by detucting his common expenses until he recovers all of his costs.

What does all of this mean?
These changes gives the impression that subsection 134.(5) equals everything out by giving the owner the same full costs awards that the condo corporations  enjoy but this is only true if the owner is successful in obtaining a court order against the corporation.

There is a real danger that the legal bills for both sides will spin out of control as both sides will feel that they cannot afford to lose.

Condominium Authority Tribunal
If Bill 106 gets passed as is, Subsection 134.(2.1) gives owners the hope that their dispute will be settled by  the Condominium Authority Tribunal and not by Section 134.

There are two issues with this. We don't know what disputes the Tribunal will hear but it seems that they will be rather minor ones. Equally important, we don't know when and if the Tribunal will be established and when it will be fully operational.

Where is the consumer protection in this?

What should be done?
Section 134.(5) should be repealed not amended.


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