Friday, August 31, 2012

Imposing Fines Against Owners in a Condominium

A more illustrative case of how NOT to impose fines may not be found.  In the case
Condominium Corporation No. 042 5636 v. Chevillard, 2012 ABQB 131 Master Smart denied a condominium corporation the right to collect fines imposed and legal fees incurred in respect of fines imposed based on an owner's not cleaning up after the owner's dog.  Amng other things, Master Smart took issue with the failure of the condominium corporation to follow its bylaws.  Particularly, Master Smart stated that the Board of the condominium corporation was required to and failed to:
  1. Pass a resolution declaring the owner in default of the bylaws based on the owner's failure to clean up after the owner's dog;
  2. Provide written notice to the owner to rectify the breach of the bylaws; and
  3. Check to see if the dog had been removed prior to filing its Application in the Court of Queen's Bench.
As a result of these three failures Master Smart dimissed the application and did not award costs to the condominium corporation for the legal fees incurred by the condomnium corporation.  Hence, how does a condominium corporation properly impose and collect fines?  The following list is suggested as good practice:
  1. Make sure the condominium bylaws comply with section 35(2) of the Condominium Property Act (Alberta); 35(2)  A bylaw under which sanctions are imposed must (a) set out the sanctions that may be imposed, and (b) in the case of monetary sanctions, set out the amount of the monetary sanctions   or the range of monetary sanctions that may be imposed.
  2. Look to both the Condominium Property Act  and the bylaws of the condominium corporation for guidance.
  3. The Board of Directors should gather the evidence that an owner has breached the bylaws; this should be done in writing and it is not sufficient, in this blogger's opinion, to rely on verbal/spoken evidence.
  4. The Board of Directors should meet to discuss the allegation of breach and review the evidence which has been gathered; the Board of Directors should then make a decision whether the bylaw has been breached and evidence this by way of resolution in the Minutes of the Board of Directors (the resolution should reflect a summary of the nature of the complaint and the conclusion of the Board.
  5. The Board of Directors should be guided by the requirements of the bylaws; many bylaws require that the condominium corporation give the offending owner notice of the breach and an opportunity to rectify the breach before proceeding with fining an owner.  The bylaws may be even more detailed in respect of steps which need to be taken prior to collecting the fines (this blogger suggests that condominium corporations obtain independent legal advice on the requirements of their specific bylaws to avoid a result such as occurred in the Chevillard case).
  6. The Board of Directors should be sure to inspect the unit or common property prior to proceding to Court and the Board of Directors should utilize the services of a lawyer familiar with the area of condominium law.