Monday, February 7, 2011

Evicting an Owner of a Condominium Unit for Improper Conduct

In 2010 both the Alberta Court of Queen's Bench and the Alberta Court of Appeal provided guidance to condominium corporations in respect of when the remedy of eviction of an owner would be available.  This blog will provide the judicial history of the remedy of eviction of an owner and comment on these recent decisions.  It is important to distinguish eviction of a tenant which is expressly provided for in section 54-57 of the Condominium Property Act (Alberta) ["CPA"] from eviction of an owner. 

Eviction of an owner is not expressly provided for in the act and Courts have accepted that eviction of an owner is a remedy which can be granted when an owner's conduct is found to have been improper ("improper conduct") in accordance with section 67 of the CPA.  The remedy of eviction of an owner was first granted in 2003 in the OCP #0221347 v. N.Y.   This case was relied on by lawyers in Calgary since 2003.  Though not expressly indicated in N.Y. it was generally  understood that eviction of an owner was a serious remedy and the Court would only grant an eviction Order in the most  serious of circumstances.

In 2010 the Alberta Court of Appeal in CC #8110264 v. Farkas  concluded that the Honourable Mr. Justice Burrows of the Alberta Court of Queen's Bench erred in not granting the condominium corporation some relief and in stating this expressly recognized the availability of the remedy of eviction of an owner:

There having been breaches of the bylaw, the condominium corporation is entitled to a remedy, although the record does not justify the remedy of eviction. The appeal should accordingly be allowed, and an order granted that the respondent cease making any noise that unreasonably interferes with the use and enjoyment of other units. In the event that there is any breach of that order, the condominium corporation may apply on notice to the Court of Queen’s Bench to determine what further procedures or remedies are appropriate.

In a 2010 decision of the Honourable Madam Justice Veit of the Alberta Court of Queen's Bench in OCP #8222909 v. 837023 Alberta Ltd., 346804 Alberta Ltd., and 1139897 Alberta Ltd. the Court did a thorough review of the case law relating to the remedy and provided guidance as to when the remedy will be available.  Justice Veit metaphorically entitled one section of her written decision: “How should breaches by condominium owners be treated? Is a condo owner more like a bee in a hive or a queen in a castle?”  In this section Justice Veit reviewed Canadian and U.S. case law and articulates a general caution in applying U.S. legal principles to Canadian condominium law.  Justice Veit then went on in a further section entitled "What is the appropriate sanction for the breaches?" to clearly identify what is now the most specific statement of the law as to when the remedy of eviction will be available to a condominium corporation against an owner.  Justice Veit stated that the remedy of eviction is a serious remedy and should only be granted as part of an incremental approach to improper conduct:

As indicated above, I am of the view that the Condominium Property Act proposes an incremental approach to improper conduct. Eviction, as proposed by the applicants, is not an incremental remedy. Some opportunity should be given to the restaurant owner to remedy the breaches before the most serious relief possible should be invoked.

Justice Veit then went on to state:

Even though this condominium’s by-laws do not anticipate the eviction of owners, and even though the legislation does not expressly authorize the eviction of owners, there may well be situations in which the extreme sanction of eviction would be appropriate. For example, if, an owner allowed dangerous substances to escape from his unit and, after an appropriate warning, refused to stop the offending conduct, eviction may the only safe and reasonable option. A breach of a by-law that caused structural damage to condominium property may justify eviction. Indeed, even a serious breach that was not dangerous might, if repeated despite warnings were unavailing, justify eviction. This restaurant owner has been a nuisance to the other owners, but there is no evidence that his breaches were dangerous either to the other owners or to their tenants or to the structure of the condominium itself. Just as, in criminal law, the most serious sentence available is not reserved only for the most serious offence committed by the most serious offender, it is not necessary to reserve eviction for the most serious breach by the most culpable condo owner.

As this case did not deal with conduct of a residential owner, instead dealing with the conduct of an owner of a restaurant and commercial condominium, its application to the conduct of residential owners may be limited to the general application of the principal of incrementalism and the Courts will likely continue to have to assess the seriousness of the impugned conduct.  The writer is motivated to make two comments as a result of Justice Veit's written reasons.  First it is prudent for condominium corporations to amend their bylaws to specifically provide for the remedy of eviction and in this regard to detail the basis upon which the remedy ought to be granted.  Second, condominium corporations should be sure to detail over time the efforts expended to gain the compliance of a recalcitrant owner with the bylaws of the condominium corporation; that is detailed notes of all incidents should be kept, fines imposed if the bylaws allow same, and demand letters be sent.  Condominium corporations cannot expect to be granted the remedy of eviction without first having followed an incremental approach.

Though not binding on Courts in Alberta, the Ontario Superior Court of Justice also issued a decision in 2010 dealing with egregious conduct of an owner.  In the case Metropolitan Toronto Condominium Corporation No. 747 v. Korolekh the Court granted the remedy of forced sale in favour of the condominium corporation against a recalcitrant owner; to the best of the writer's knowledge this remedy has not sought and has not been granted in Alberta.  However, section 67 of the CPA appears to be broad enough to allow for this.

It will be curious to see how serious the conduct of an owner will need to be for the Courts in Alberta to grant either the remedy of eviction of an owner or even possibly the remedy of forced sale of the owner's unit in light of these cases.