Action of Tenant Results in Condo Owner Losing Unit

By Evan Shapiro, HBA, JD

 

One of the unique characteristics of owning a unit in a condominium is that you are part of a self-governing community. The operations and affairs of condominium corporations are governed by the Condominium Act, 1998, S.O. 1998, c.19 (the “Act”), as well as internal documents, including the condominium’s declaration, bylaws, and rules. The declaration, bylaws, and rules of a condominium corporation contain a number of restrictions on the use of a unit or its common elements. For example, a condominium may impose restrictions on smoking, pets, or on leasing units, whether short or long-term.

The case of York Condominium No. 187 v. Sandhu, 2019 ONSC 4779 is an important reminder of the ability of condominium corporations to enforce the Act, its governing documents, and to how a landlord may be held responsible for the actions of its tenants.

Sandhu leased a unit in York Condominium Corporation No. 187 (“YCC”) to a tenant that was in constant conflict with building management. The tenant eventually sued YCC for over $5 million dollars. YCC warned Sandhu prior to defending the tenant’s action that it would hold her responsible for all costs associated with the forthcoming litigation.

Section 134(5) of the Act states that if a corporation obtains a costs order against either an owner or an occupant of a unit, the costs of the litigation must be added to the common expenses for that unit. The bylaws of YCC also required each owner to reimburse the corporation for any loss which is caused by a unit owner or any resident or tenant in the owner’s unit.

The tenant’s claim, as well as their appeal, were ultimately dismissed, and YCC incurred legal expenses of approximately $86,000. while defending the litigation. When Sandhu took no action to pay the amount owing, after demand was made, YCC registered a lien against her unit. Litigation ensued between YCC and Sandhu. YCC requested an order for possession of Sandhu’s unit, so that it may be sold to pay off the lien. Sandhu counterclaimed and denied the validity of the lien. Sandhu argued, in part, that it would be an injustice for her to be held responsible for the unauthorized actions of her tenant.

The Superior Court of Justice determined that the lien was valid and granted YCC 187’s order for possession, enabling it to sell the unit. In response to Sandhu’s argument of fundamental justice, the Court noted that it would be unfair to the other 253 unit owners if they had to bear the costs incurred defending the tenant’s litigation.

The case of YCC 187 v. Sandhu emphasizes, in drastic fashion, the consequences that can occur if a unit owner, or their tenant, are in breach of the Act or the corporation’s governing documents. Unit owners, or prospective purchasers, should be well aware of their obligations.

 

For more information, contact Shapiro Real Estate & Business Lawyers, 416.224.0808 / garryshapirolaw.com