ARTICLE
2 February 2018

The Condominium Tribunal And Recovery Of Costs By Condo Corporations - Why A Court Challenge Is Inevitable

MS
Macdonald Sager LLP
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Founded more than 25 years ago, Macdonald Sager is a full-service law firm that grows and thrives with each passing year. Our lawyers offer a unique combination of skills, expertise and insight that allows us to effectively asses your legal challenges and deliver strategic, creative solutions. Our structure as a mid-sized law firm enables us to be highly results-oriented and client-focused, yet timely and cost-effective.
Law Times recently posted an article focusing on the fact that, barring exceptional circumstances, the new Condominium Tribunal in Ontario won't award costs to successful litigants.
Canada Real Estate and Construction
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Law Times recently posted an article focusing on the fact that, barring exceptional circumstances, the new Condominium Tribunal in Ontario won't award costs to successful litigants.

On first blush, this makes total sense. This new procedure has been set up to provide owners and residents with a quicker and cheaper forum to resolve disputes. If an owner makes a request for records, and the tribunal is required to make an Order, the "losing" party won't need to pay the costs of the winning party (as is common in the court process).

The complication, however, is going to be when condominium corporations begin retaining their own lawyers to prepare and attend at the hearings (which is already happening). If a condominium corporation successfully responds to an owner's complaint, and incurs legal costs in doing so, it will want to charge back the costs to the owner under the indemnity provision(s) of its declaration. Most condo declarations contain standard indemnity clauses which require an owner to reimburse the condo corporation for costs incurred by the corporation. If an owner brings an unsuccessful complaint to the Tribunal, then it becomes arguable that the costs incurred by the condo corporation can be charged back to the owner (regardless of whether the Tribunal makes any costs order).

In my mind, it is only a matter of time before these type of charge-backs become common. This, in turn, will lead to the inevitable challenge before the courts, where a declaration's indemnity clause will need to be interpreted in the context of a Condominium Tribunal decision. Again, condo declarations were not drafted with the Condominium Tribunal in mind, and it will be interesting to see how this issue is interpreted by the courts in the future.

About Mackrell International - Canada - MacDonald Sager Manis LLP is a full service business law firm in Toronto, Ontario and a member of Mackrell International. Mackrell International - Canada is comprised of four independent law firms in Alberta, British Columbia, Ontario and Quebec. Each firm is regionally based and well-connected in our communities, an advantage shared with our clients. With close relations amongst our Canadian member firms, we are committed to working with clients who have legal needs in multiple jurisdictions within Canada.

This article is intended to be an overview and is for informational purposes only.

ARTICLE
2 February 2018

The Condominium Tribunal And Recovery Of Costs By Condo Corporations - Why A Court Challenge Is Inevitable

Canada Real Estate and Construction
Contributor
Macdonald Sager  LLP   logo
Founded more than 25 years ago, Macdonald Sager is a full-service law firm that grows and thrives with each passing year. Our lawyers offer a unique combination of skills, expertise and insight that allows us to effectively asses your legal challenges and deliver strategic, creative solutions. Our structure as a mid-sized law firm enables us to be highly results-oriented and client-focused, yet timely and cost-effective.
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