Canadian Commercial Real Estate Law Blog

Licensing of Strata Managers Underway in British Columbia

Strata managers in British Columbia continue to have queries about the mandatory licencing scheme that came into effect in that province on January 1, 2006.  Under the new scheme, the Real Estate Council of British Columbia now requires all strata managers be licenced and insured under the Real Estate Services Act. On January 1, 2006, all strata managers were effectively granted temporary licences that expire on January 1, 2007 to allow them to complete the educational requirements and pay the prescribed licencing and insurance fees now required. Strata managers that operate self-managed buildings are exempt from the new licencing requirements but only if a condominium owner within the complex in question is providing the management services. Additional information from the Real Estate Council can be obtained here.     (posted by Christine Mingie)

March 24, 2006 in Condominiums | Permalink | Comments (0) | TrackBack

Syndicat Northcrest v. Amselem -- One Year Later

The Supreme Court of Canada decision Syndicat Northcrest v. Amselem, [2004] S.C.C. 47 ("Syndicat Northcrest") is a year old. Surprisingly, the decision has been largely ignored in condominium jurisprudence across the country but that isn't likely to last because the Court's ruling represents quite a dramatic reversal of the trend in condominium law toward upholding the collective wish of owners in a condominium over exterior alterations. It's an important case and I have summarized it briefly.

The Facts and Superior Court Decision

In the Fall of 1997, Moïse Amselem requested permission from his Montreal condominium corporation (“Northcrest”) to build a temporary sukkah on the limited common property balcony of his condominium unit to celebrate the Jewish Sukkot. The bylaws (or declarations in Quebec) of Northcrest contained numerous prohibitions, including a bylaw prohibiting owners from enclosing or placing anything on balconies and prohibiting owners from modifying the building exterior without permission.

Northcrest refused Mr. Amselem’s request but offered to build a communal sukkah on the common property at the expense of all the owners to enable Mr. Amselem and other owners to celebrate Sukkot. Mr. Amselem and a number of owners (the “Appellants”) refused the corporation's offer and installed individual sukkahs on their balconies during the Sukkot. Northcrest applied to the Quebec Superior Court for an order requiring the Appellants to dismantle the sukkahs and restore the balconies to original condition (Syndicat Northcrest c. Amselem [1998] A.Q. no. 1959).

The Quebec Superior Court granted the injunction and held that the restrictions in the Northcrest bylaws were justified under Quebec condominium property law. The Appellants had argued, among other things, that the restrictions in the bylaws infringed their freedom of religion under the Quebec Charter of Human Rights and Freedoms (the “Quebec Charter”). The Court held that since there was no religious obligation requiring the installation of personal sukkahs or prescribing where sukkahs could be installed, the restrictions in the bylaws did not infringe the Appellants freedom of religion since they did not prevent them from observing the Sukkot. The Court found that Northcrest had made efforts to find a reasonable accommodation by proposing to build a communal sukkah to allow the Appellants to observe Sukkot at Northcrest, an accommodation rejected by the Appellants. In the Court's view, the rights of the owners as a collective to enjoy their property in conformity with the contract established between them in the bylaws was as important as any other fundamental freedom under the Quebec Charter. The Court also found that, in any event, installations on the balconies could obstruct evacuation in an emergency and were not permitted under a perpetual servitude for the right of passage in favour of all the limited common property at Northcrest.

The Appeals

The Appellants appealed to the Quebec Court of Appeal which upheld the lower court’s decision (Syndicat Northcrest c. Amselem [2002] J.Q. no. 705). The Appellants then appealed to the Supreme Court of Canada (“SCC”) and the appeal was allowed (Syndicat Northcrest v. Amselem 2004 SCC 47).

The SCC Majority Decision

In a divided decision, the SCC held that the burden placed upon the Appellants by the bylaws prohibiting the installation of anything on limited common property balconies was substantial and constituted a non‑trivial interference with their protected rights to dwell in a sukkah during Sukkot.

The deleterious effects on Northcrest’s rights or interests were minimal and could not be reasonably considered as imposing valid limits on the exercise of the Appellants’ religious freedom. The exercise of the Appellants’ freedom of religion outweighed Northcrest’s concern about the decrease in property value.

Northcrest had argued that the Appellants waived their right to freedom of religion and agreed to be bound by the bylaws when they signed the declaration of co‑ownership, and that they were required to comply with the bylaws, including the bylaw prohibiting installations on the limited common property.

According to the SCC, since one of the bylaws did not absolutely prohibit balcony enclosures but merely required the consent of the corporation before doing so, the Appellants’ signing of the declaration could not be construed as a waiver or as an agreement not to build or install anything on balconies; it simply recognized the need to obtain consent prior to construction.

Moreover, the waiver of a right had to be voluntary, freely expressed and with a clear understanding of the true consequences and effects to be effective. A buyer who had no other choice but to renounce a right cannot be said to have truly waived the right. Here, the Appellants had no choice but to sign the declaration of co‑ownership in order to live at the Northcrest. It would be insensitive and morally repugnant to suggest that the Appellants move elsewhere when they took issue with a restrictive clause in the bylaws. If the Appellants had not taken note of the restrictions when purchasing their units, despite the fact that a copy of the bylaws was given to them, there was no clear understanding of the consequences of the bylaws.

Waiver of a fundamental right, such as freedom of religion, need not only be voluntary, it must also be explicit, stated in express, specific and clear terms.  The general prohibition on construction, such as the one in the Northcrest bylaws was insufficient to ground a finding of waiver and so would any document lacking an explicit reference to a Charter right.

The SCC held that the Appellants were entitled to set up sukkahs on the balconies for a period lasting no longer than the holiday of Sukkot, as long as they allowed room for passageway in case of emergency as well as conform, as much as possible, with the general aesthetics of the property.

The Dissenting SCC Opinion

The dissenting opinion from the SCC represents the more traditional condominium law point of view. In dissent, Justice Binnie wrote that there was a vast difference between using freedom of religion as a shield against interference with religious freedoms by the State and as a sword against owners in a private building. In Justice Binnie’s view, it was for the Appellants, not the other owners, to determine in advance of buying their condominium what their particular religious beliefs required. The Appellants undertook by contract with the owners of Northcrest to abide by the bylaws. They thereafter rejected the accommodation offered by Northcrest of a communal sukkah because it did not fully satisfy their religious views although the accommodation was not, inconsistent even with religious obligation in circumstances where a personal sukkah is simply not available.

While there were security and insurance concerns about sukkahs on balconies, Northcrest's primary concern was the appearance of their home as an expression of how they wish to be seen by the world. This is related to maintaining the value of their investment. The strictness of the bylaws agreed to by the owners, including the Appellants, would have been evident had the Appellants made even the most casual examination of them. None of these restrictions in the bylaws had a religious purpose and they were certainly not aimed at persons of the Jewish faith. The bylaws simply expressed a certain style of architectural austerity or collective anonymity which the owners wanted to present to the world in a building shorn of any external display of individual personality. The owners had gone so far as to prohibit the display of garden trellises and television reception dishes. The Ambassador of the Netherlands was told to remove his national flag. Such micro-control of the exterior appearance of the building may not be to everyone’s taste, but it was the collective will of the owners of Northcrest, a building in which the Appellants had decided to invest. The owners were entitled to conclude that when the Appellants accepted the bylaws they were indicating that the practice of their religion permitted them to live within the existing bylaws.

If the bylaws had permitted the construction of a sukkah at the time the Appellants purchased, and a majority of the owners had afterwards sought to impose a ban on their construction at a later date, a different issue would arise. The point in this case is that the Appellants themselves were in the best position to determine their religious requirements and must be taken to have done so when entering into the ownership agreement in the first place. They cannot afterwards reasonably insist on their preferred solution at the expense of the countervailing rights of the other owners.

Syndicat Northcrest has far reaching implications for condominium corporations and individual owners with respect to the effectiveness or enforcement of bylaw restrictions when fundamental rights are at issue.

                                                                    Posted by Christine Mingie [email protected]

July 15, 2005 in Condominiums | Permalink | Comments (2) | TrackBack

Powers of a Condominium Administrator Clarified in British Columbia

The recent decision Aviawest Resort Club v. The Owners, Strata Plan LMS1863, 2005 BCCA 267 from the British Columbia Court of Appeal has clarified the extent of the powers of a condominium corporation (strata corporation in British Columbia) court-appointed administrator. The appeal arose from an earlier decision of the British Columbia Supreme Court appointing an administrator to manage the affairs of a condominium corporation hotel. In that earlier decision, the Court gave the administrator the power to impose levies, approve special budgets and to pass resolutions normally requiring a 75% vote of the owners. The Court of Appeal reversed the decision, holding that owners' rights as members of the condominium corporation were distinct from their rights as individual owners of condominium units.

Accordingly, the Court concluded it was not empowered to authorize an administrator to do any act requiring a special resolution without requisite approval from the owners. If a strata corporation could not act without the authority of a resolution, the administrator was equally restrained.

Ontario's first condo case dealing with the appointment of an administrator was Skyline Executive Properties Inc. v. Metropolitan Toronto Condominium Corp. No. 1385. The parties to that case have been litigating various condo issues before the courts since 2002. Unfortunately, the appointment of an administrator did not solve the condominium corporation's inability to effectively manage the corporation on its own without dispute.

Posted by Christine Mingie

June 15, 2005 in Condominiums | Permalink | Comments (1)