Condominium owners are never happy to hear the news that their condominium corporation is levying a special assessment.
In a recent case, Tarko v. MTCC No. 626, one owner took the corporation to court on the basis that the expenses which the special assessment was to cover were not proper condominium expenses. The residential condominium shared a building with retail, office and commercial spaces and an indoor parking garage. Some of the condominium unit owners had parking arrangements with the parking garage owner which permitted them to use parking spaces on a monthly basis. After the garage owner terminated these monthly arrangements, the condominium corporation sued the garage owner, but unfortunately was not successful in the litigation. The condominium corporation then levied a $7.00 per square foot special assessment to cover the legal costs relating to the parking litigation.
One owner objected to the special assessment on the basis that the parking dispute did not relate to the corporation’s common elements and assets. This owner felt that the parking dispute constituted a private matter between some unit owners and the garage owner and as such, it was not proper for the all of the unit owners to be charged for the litigation costs.
Notice of the special assessment was sent to all the unit owners on April 15, 2011. At the corporation’s annual general meeting held May 30, 2011 the owner voiced her concerns about the special assessment. Notwithstanding her objections, the special assessment remained in effect, with the first instalment of the assessment being payable on July 1, 2011. The unit owner commenced legal proceedings against the condominium corporation on June 28, 2013.
As the unit owner was aware of the special assessment prior to May 30, 2011, and at the conclusion of the annual general meeting knew that the special assessment remained in effect, the Small Claims Court held that the owner’s claim was barred by the Statute of Limitations, as the legal proceedings were commenced more than two years after the claim was discovered. This decision was upheld by the Divisional Court. The Divisional Court Judge commented that this was consistent with the fact that had anyone been interested in buying the owner’s unit, disclosure of the special assessment would have been set out in the corporation’s status certificate from and after the point in time that the special assessment had been approved by the corporation’s board.
As the owner’s claim was stayed because of the Statute of Limitations, we do not know if the result would have been different if the court had actually considered whether the parking litigation costs were proper costs to be assessed against all of the unit owners.