Condominium Act Dispute Resolution

In Ontario, Canada most disputes related to condominiums are required to be mediated and then if not settled are required to go to arbitration. We are expecting changes to come to the Condominium Act soon with a major overhaul but those changes are not fully known yet. Bill 106 to amend the Act has been introduced but it is not clear yet how mediation and arbitration will change once it becomes law and is implemented.

Here we explain the dispute resolution provisions that apply to Ontario’s condominiums under the Condominium Act of 1998 which became law in Ontario in 2001 and remains the law in 2015. Since the 1998 act, the condominium lifestyle has become more prevalent and the number of condominiums has multiplied. The existing Condominium Act provides for mandatory mediation and arbitration of most condominium disputes but the court has a major role in dispute resolution which is very significant as set out in most of the applicable sections.

Part 9  of the Condominium Act covers enforcement and remedies available in condominium dispute resolution. The following are the major provisions from each section of Part 9:

Section 130 The court has power to appoint an inspector to investigate and audit the actions of a condominium developer or corporation. The inspector makes a report and the court may act on the finding and recommendations.

Section 131 allows the court to appoint a condominium administrator to take over from the condominium corporation board if that is in the best interests of the owners.

Section 132 is the key ADR section for condominium dispute resolution. It provides for mandatory mediation and arbitration of condominium disputes. This includes disputes between the developer and the condominium corporation and the condominium corporation and a unit owner.  It also includes disputes between the corporation and management person or company and disputes between corporations.  It is a voluntary selection process for mediator and arbitrator with arbitration governed by the Arbitration Act of Ontario. If there is no agreement on mediator or arbitrator selection the court may appoint an arbitrator. Mediators have power to make costs orders at the conclusion of mediation and arbitrators have full power to decide disputes. Under the Arbitration Act there is a limited right to a court appeal or review of the arbitrator’s decision.

Section 133 provides that if a developer makes false or misleading statements a condominium purchaser may seek damages in court.

Section 134 allows a condominium corporation or owner to apply to court for an order seeking compliance with the condominium declaration, bylaws or rules. This sometimes can be used as an alternative to mediation or arbitration where the dispute is an obvious one over compliance.  It is, however, intended by the provisions that the parties go through a mediation and arbitration process first.

Section 135 provides for an oppression remedy in court similar to what minority shareholders in a business corporation can seek if the person believes they have been treated oppressively by the condominium corporation or a person. This is described as unfairly prejudicial or an unfair disregard of the applicant’s interests. It is an alternative to the mediation and arbitration process.

Section 136 provides that other remedies in existence before the act continue to be available for dispute resolution if they do not conflict with the Condominium Act provisions.

Section 137 allows the court to deal with offenses under the Act with large fines for corporations and individuals including condominium corporation directors.

 

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