Unit Owner Can Sue Over Common Elements

In a recent Ontario Court of Appeal decision, the court confirmed that an individual condominium unit owner has the right in some circumstances to sue for relief relating to the common elements.

The buyer agreed to buy eight units from the developer of a high-rise condominium complex still under construction in downtown Toronto. The agreed design was to incorporate custom exterior doors, windows and walls. Although they were built to meet the buyer’s specific needs, it was agreed that these custom elements were to remain part of the condominium’s common elements.

After the buyer moved in, a dispute arose as to whether these extra design features were adequate. The buyer sued, requesting the court to force the developer to fulfill its agreement in connection with these customized common elements. As an alternative, the buyer requested purchase price abatement, or failing that, damages.

Meanwhile, other construction problems prompted the condominium corporation itself to sue the developer for common elements deficiencies, both on its own behalf and on behalf of the individual unit owners (including this particular buyer). Unit owners could opt-out if they wished to proceed on their own; the buyer did not choose the opt-out option.

The developer resisted the individual buyer’s action on the basis that the complaints underlying it all related to the common elements, and that it was within the legislated mandate of the condominium corporation – not the individual buyer – to sue for any related remedy. In other words, it claimed that the buyer was not entitled (i.e. had no “standing”) to bring that kind of action.

The developer was successful in having the buyer’s action stayed by the lower court on this basis.

By the time the matter came before the Court of Appeal, the action by the condominium corporation itself had been settled. Although the buyer’s own action was procedurally stayed, the question of whether it had the right to bring the action was still to be determined.

The Appeal Court ordered that the buyer’s action could indeed proceed. Section 23 of the Condominium Act, 1998 stated that the condominium corporation “may” pursue an action in connection with the common elements, but this did not give the corporation exclusive authority to do so. Further, the Act did not deprive the unit owners of their right to sue as well. Any statutory limitation of this nature would have to be clearly-worded.

Here, the alleged failure by the developer to construct the custom doors, walls, and windows pertained specifically and were unique to the buyer’s particular unit, and arose from a contractual relationship between the buyer and the developer. The appropriate party to pursue resolution of those issues was therefore the buyer itself. The appeal was allowed and the buyer’s action was allowed to proceed. See 1420041 Ontario Inc. v. 1 King West Inc., 2012 (ONCA).