A decision of the Superior Court of Justice in Toronto earlier this year clarifies the huge financial risks a condominium owner assumes if he or she is found to be in breach of the rules of the corporation.
Anthony Italiano bought a Toronto condominium unit on Marine Parade Dr. in October 2006. Before taking possession, he obtained permission from the condominium corporation to install laminate hardwood flooring in his home. Shortly after he moved in, the corporation received noise complaints from the owners of two units beside and underneath his own.
In early 2007, building security visited Italiano's unit and reported that the sound coming from inside was "loud." Building management contacted the condominium lawyers who sent a letter demanding that the noise cease. An arbitration between the parties took place in August 2007. At the hearing, Italiano requested that the common element walls of his unit be tested for deficiencies which might account for the transmission of noise.
Several months later, an independent acoustics report was delivered to the arbitrator. It concluded that the sound transmission material in the building complied with the Ontario Building Code standard, "although, barely."
In early January this year, the arbitrator concluded that Italiano's unit "had been a frequent source of noise that was annoying, disruptive and constituted a nuisance to other occupants in the building." As well, "there was overwhelming evidence" that the unit "was a frequent source of unacceptable noise generated at all hours of the night and day in total and callous disregard for the welfare of others."
Other than referring to the installation of hardwood flooring, the published court decision does not make clear what kind of noise was coming from Italiano's unit.
The arbitrator ruled that Italiano had breached various sections of the condominium's declaration and rules and ordered that he comply with them.
As well, he ordered that Italiano pay a total of $81,865.07 in costs to the condominium corporation. Included in the award were the arbitrator's fees of more than $35,000, and legal fees of $39,000 for the condominium's lawyer.
In July, Italiano asked the Ontario Superior Court for permission to appeal the arbitration award against him. Other than a reduction in costs by slightly more than $4,000, his application was dismissed.
In the spring of this year, a certificate of lien was registered on the title to Italiano's unit to secure the costs order of $77,762.57. This registration means that the unit cannot be sold or refinanced without paying the amount owed to the condominium corporation.
By law, a condominium corporation has the right to sell a liened unit under a Power of Sale in order to recover the amount owing to it. After paying off any outstanding mortgage, taxes, common expenses and other debts, the condominium gets to keep any surplus up to the amount owing under the lien.
In my practice, I have found not all condominium corporations are as aggressive as this one in attempting to ensure peace and quiet for its unit owners. Often, noise and other issues can be resolved in a meeting among the parties involved, without resorting to expensive mediation and arbitration proceedings.
I have also found that few unit owners are willing to push those proceedings to the extent that tens of thousands of dollars in legal costs are incurred. Residing in a condominium is an exercise in community living. Boards are elected to implement and enforce rules so that all owners can enjoy their units in peace and quiet.
The Italiano case also provides a valuable lesson for purchasers of new construction and resale condominiums. If you're buying from a builder, get the floor and wall sound transmission specifications in writing. If you're buying resale, check it out yourself. Or buy earplugs.
Bob Aaron is a sole practitioner at the law firm of Aaron & Aaron in Toronto. Bob specializes in the areas of real estate, corporate and commercial law, estates and wills and landlord/tenant law. His Title Page column appears Saturdays in The Toronto Star and weekly on Move Smartly. E-mail firstname.lastname@example.org
December 22, 2008Legal |