Administration fees are invalid

In this judgment, Justice F. L. Myers dealt with an application by a condo owner who got into a nasty and needless dispute with her board of directors.

This matter is dealt with in great detail on a different page in this chapter but the issue of "administration fees" from that judgment is so important that it deserves its own page.

Couture v TSCC No. 2187
Ontario Superior Court
Court File No: CV-15-527224
Justice F.L. Myers
Date: 04 December 2015

The residential building at 2 Ridelle Avenue in Toronto is owned by TSCC # 2187. The condominium consists of 44 residential condominium units plus common areas.

"Article 10 of Bylaw No. 1 of the condominium corporation provides in part as follows:
The contravention of any provisions of the Act, Declaration, By-laws and/or Rules of the Corporation, shall give the Board, subject to its duty to act reasonably in addition to any other rights set forth in the Act and the declaration, the right to:

(d)  impose an administrative fee of up to $250 per incident against the owner of a Unit responsible for breach of the Declaration, By-laws and/or Rules of the Corporation by the owner… as a reasonable cost incurred by the Corporation for the extra administrative work involved in enforcing the Declaration, By-laws and/or Rules of the Corporation."

During this dispute the judge states: "in separate correspondence the Board threatened to levy an “administration fee” of $250 as compensation for the inconvenience of corresponding with the applicant."

"By letter dated December 13, 2012, the board purported to levy a $250 administration fee against the applicant, “for its need to take time away from other matters to continuously notify you of your failing to heed past warnings” concerning her husband’s behaviour. Not surprisingly, the applicant denies the allegations concerning her husband.

Moreover, she denied the board’s entitlement to levy fines. Continued nasty exchanges ensued leading the board to levy another $250 “administration fee” in relation to an allegation that Mr. Couture tampered with security cameras. ... There is no evidence before me of anyone observing Mr. Couture touching a security camera despite the board’s allegation that he was observed doing so."

"I agree with Mr. Justice Maloney in Basmadjian v. York Condominium Corporation No. 52, where his Lordship suggested that such bylaws are ultra vires or invalid for being beyond the powers of the corporation to enact.

 Counsel for the condominium corporation did not point to any provision of the statute empowering the condominium corporation to enact bylaws allowing the Board to levy administrative fines. ... an administrative fee also has the potential to operate as an arbitrary weapon. Given the nature of condominium disputes—involving significant emotional components brought on by the parties’ ongoing physical proximity—and the policy favouring consensual dispute resolution mandated by the statute, I do not view the power to levy administrative fees or fines as being commensurate with the statutory scheme or purpose. Accordingly, I view the administration fees as improper and the provision that purports to authorize them as ultra vires the corporation."

I was reminded of this decision when I read a condo's rules that states that it will charge administration fees for various offences.

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