Written by Shlomo Sharon | 21 November 2015
Condo Business

Consider this scenario: At the first meeting of a newly elected condo board, the property manager advises the board members that they need to appoint a lawyer to represent and direct the corporation on any legal matters related to the condo corporation.

In response, one board member suggests that his brother-in-law’s daughter, who just graduated from law school, could assume this task. Since she has just started her own practice, he adds, she may not charge as much as other lawyers. Everyone in the room gets excited. This fictional scenario is one that has played out in real life, with slight variations, at many board meetings.

But wait a minute: Does this lawyer have the expertise to advise the corporation? Condominium law is complex and constantly evolving with the latest court decisions. And as more people choose to live in condos, new legal issues, such as whether corporation documents permit the type of short-term rentals facilitated by sites such as Airbnb, emerge. Recognizing the changing landscape, the Ontario government is currently working on reforming condo law with the proposed Protecting Condominium Owners Act. For all these reasons, corporations require the advice of an experienced condo lawyer.

An experienced condominium lawyer should be able to provide the corporation with clear opinions, practical legal advice and creative solutions to problems. Initiating a lawsuit is not always the preferred approach. Litigation can be very costly and the outcome is never certain.

For example, a corporation that is negotiating performance audit deficiencies may think that going through the courts is the most practical avenue to take. However, it may take a few years to go through the process, with legal and engineering fees mounting every step of the way. An experienced condo lawyer should be able to provide the most cost-effective approach, possibly by recommending negotiating a settlement with the declarant whereby the corporation agrees on an amount and then takes responsibility for effecting the repairs. The lawyer would also ensure that the proper releases are signed without compromising any future issues the corporation may encounter.

In addition to looking for an experienced condo lawyer, corporations should also consider his or her firm’s fee structure, response time and extra services.

Fee structure

Before appointing a firm, ask how it charges for legal advice: a flat rate or by the hour? Does the firm charge for every phone call or email?

If a corporation sends an email or leaves a voice message, it may be charged for both, even if it received no reply. It’s common for a lawyer to record a five-minute phone call, or an email, round the fee up to fifteen minutes of legal advice, and bill the corporation for it. At a rate of $400 per hour, that would cost the corporation $100.

Note: A lawyer who offers a cheaper rate but lacks condo experience may cost the corporation a lot more in the long run. A lawyer without condominium experience will likely take more time to research and answer a question than a lawyer with condominium experience.

Response time

Also look for a lawyer who will reply to the corporation within 24 hours, not four weeks later. Response times can be critical and expensive.

To offer a real-life example: A discussion arose during a board meeting, with regard to a unit owner that had distributed a confidential email to a number of other unit owners. The property manager and board members agreed that the board members required legal advice to deal with it. The property manager called the corporation’s lawyer on her cell phone and was able to get the right legal advice in no time, which allowed the board to move forward on the item. In this particular case, the lawyer’s advice was to: 1. email the unit owner to request that he immediately refrain from distributing the confidential communications; and 2. email the other owners to advise that the communications were confidential and to request that they delete the e-mail chain immediately and not to further distribute same.

Extra services

Find out what other services the legal firm offers. Does it host seminars about condominium issues? As new legal developments occur, these seminars can be very helpful to affected condo corporations. Does the firm publish bulletins or maintain a blog which board members can choose receive via email or mail to stay informed and up-to-date?

Last but not least, take the time to meet with the prospective lawyer. Don’t be shy to ask questions during candidate interviews. A questionnaire isn’t a substitute for a personality fit.

To recap, the corporation should consider fees structure, response time and extra services when appointing a lawyer. But above all, the corporation should prioritize condominium law expertise. And for that reason, the board in the hypothetical scenario cited earlier would be wise not to hire the cheap but inexperienced lawyer related to one of the board members.

Shlomo Sharon is CEO of Taft Management Inc. and a member of CCI since 2002. Taft Management Inc. is an ACMO 2000 Certified Property Management Company and has been providing property management services since 1996.

Visit the website www.taft-forward.com for further information or email him at shlomos@taft-forward.com.

Written by Shlomo Sharon | 19 March 2005

Condo Living sent the following question to Shlomo Sharon, President, Taft Forward Property Management Group

Question

I am inquiring about damage to other units caused by, for example, a toilet tank or a washer bursting in a top-floor unit.
I have been told that if the toilet tank bursts as a result of negligence by the unit owner, then the unit owner (or the owner’s insurance) pays for the damage to the other units. But if the bursting was not the result of the unit owner’s negligence, then the condominium corporation (or the condominium corporation’s insurance) is responsible for repairing the damage to the other units.

Answer

The Condominium Act provides that the condominium corporation shall insure both the units and the common elements. If the incident is an insurable item under the policy, which could include an overflowing toilet tank as you mentioned, then the condominium corporation would have to determine whether the damage was caused to the unit and/or the common elements.
Any improvements made by a unit owner or any personal belongings would not be covered by the condominium corporation’s insurance policy.
Even if a unit owner caused the damage or was negligent, the corporation still has the obligation to put the claim through its insurer to cover any damage to the units or common elements.
To determine if the damage was caused to the “unit” (covered) or to an “improvement” (not covered), the declaration and the by-laws need to be reviewed. The unit owner who suffered the damage, although innocent, would either have to pay the cost or put the claim through his/her own insurer.
The importance of determining who caused the damage is relevant in determining who pays the deductible portion of the condominium corporation’s insurance policy.