In a recent case, Zordel v. MTCC No. 949, a couple of unit owners (the “Applicants”) sued the condominium corporation after it entered into a new agreement with a new service provider for the provision of bulk television and internet services. The Applicants claimed that the corporation did not have the jurisdiction to enter into the agreement and require the unit owners to pay for such services as common expenses without allowing owners to opt out. The applicants also took the position that the corporation was required to obtain the approval of at least 66 2/3% of the unit owners before entering into the agreement, as required by section 97 of the Condominium Act, 1998.
The corporation’s declaration contained a “without limitation” list of common expenses, which specifically referred to among other things, the cost of utilities and cable television. The Applicants argued that common expenses only included cable television supplied to the common areas and not to the units, even though the cost of bulk television services to the units had always been charged as a common expense. The applicants also argued that the reference to cable television should not be interpreted to cover internet services.
The Ontario Superior Court of Justice rejected both of these arguments. Cable television service had always been provided in bulk to the units, as was electricity, water and garbage disposal and the costs of all of these services to the units was always included in common expenses. The Court determined that the inclusion of internet services in common expenses was proper as it was an add-on to the existing cable television services and in addition, the corporation’s general by-law authorized the corporation to enter into a bulk telecommunications agreement and to charge the costs to the owners as common expenses.
The Court also dismissed the Applicants’ claim that the corporation was required to obtain prior approval of the unit owners before entering into the new agreement. The supply of television services by way of internet protocol instead of by cable, was not a change in service – only the technology delivery method of the service changed. While the supply of internet services was a new service, the Court held that the incremental cost of the internet service alone did not exceed the financial thresholds set out in Section 97 to trigger the need to either provide notice to the owners or obtain the approval of the owners.
In those condominiums whose declaration or by-laws authorize the corporation to enter into bulk telecommunications agreements and to include the costs in common expenses, individual unit owners will lose the freedom of personal choice as to services supplied to the units, but presumably the corporation will be able to negotiate more favourable contract terms than the individual owners would be able to obtain. However, there will be some owners who end up paying for a service that they do not want or need.