CCI Huronia Newsletter, Spring 2019 Issue

Ask the Expert: What Work Requires Owner Approval and/or Notice?

Ashley Winberg, B.A. (High Honours), J.D., Associate, Elia Associates

Board Member: The original turquoise siding at our building has deteriorated due to normal wear and tear and needs to be replaced. Unfortunately, turquoise siding is no longer manufactured. The siding currently being manufactured is grey and cannot be painted a different colour. Consequently, we have decided to replace the deteriorated turquoise siding with new grey siding. We have also decided to paint the existing turquoise window trim, which was repainted last year and is still in good condition, grey so that it will match the new grey siding.

Question 1 – Replacing Obsolete Construction Material

Board Member: Since the colour of the new siding will be different than the colour of the original siding, do we need to need to notify owners and/or obtain their approval before we replace the deteriorated turquoise siding with the new grey siding?

Ashley: Section 97(1) of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”) requires that owners be notified and/or approve certain additions, alterations and/or improvements to the common elements. In this regard, I draw your alteration to subsection 97(1) of the Act, which provides as follows:

“If the corporation has an obligation to repair the units or common elements after damage or to maintain them and the corporation carries out the obligation using materials that are as reasonably close in quality to the original as is appropriate in accordance with current construction standards, the work shall be deemed not to be an addition, alteration or improvement to the common elements or a change in the assets of the corporation for the purpose of this section.”

When work to be undertaken by a condominium corporation falls within the ambit of subsection 97(1) of the Act, the work is not “an addition, alteration or improvement” to the common elements and as such, subsections 97(2) through to 97(7) of the Act do not apply. The Ontario Superior Court in Harvey v. Elgin Condominium Corp. No. 3 (“Harvey”),[1]  set out the following test to be applied to determine whether work undertaken by a condominium corporation falls within the ambit of subsection 97(1) of the Act:

  1. Does the area to which the work relates form part of the common elements?
  2. Does the condominium corporation have an obligation to repair the common elements after damage or maintain same?
  3. Does the work constitute “repair or maintenance”?
  4. Will the work be carried out using materials that are reasonably close in quality to the original as is appropriate in accordance with current construction standards?

When the answer to each of the foregoing questions is “yes”, the work falls within the ambit of subsection 97(1) of the Act as the work is not “an addition, alteration or improvement” to the common elements and as such, subsections 97(2) through to 97(7) of the Act do not apply. 

Questions 1 and 2 of the Test would be determined by examining your condominium’s declaration and description in conjunction with Sections 89, 90 and 91 of the Act. 

Assuming that your condominium’s declaration provides that the siding forms part of the common elements and that the corporation has an obligation to repair and maintain same, the answers to Questions 1, 2 and 3 of the test would be “yes” as: (1) the siding would form part of the common elements; (2) the corporation would have an obligation to repair and maintain the common elements, including the siding; and (3) the replacement of the siding would be maintenance work, since the siding has significantly deteriorated as a result of normal wear and tear.

Question 4, which is the question that remains, is whether the new grey siding is of a material that is reasonably close in quality to the original turquoise siding as is appropriate in accordance with current construction standards.

The wording of subsection 97(1) of the Act contemplates a degree of latitude appropriate to the circumstances as well as evolving construction knowledge and methods. Thus, the courts have held that the replacement of "old", "defective" or "worn out" common elements with "new", "improved" or "upgraded" material, equipment or designs can still constitute "repair" and "maintenance" work even if the result has a different, more contemporary aesthetic appearance.

Replacing the existing turquoise siding with the new grey siding will result in a different aesthetic appearance as the colour of the siding will be different; however, this change is arguably consistent with current construction standards, since turquoise siding is no longer manufactured and because the new grey siding cannot be painted. Thus, the replacement of the turquoise siding with grey siding would not be “an alteration, addition or improvement” to the common elements since the replacement would fall within the ambit of subsection 97(1) of the Act. Consequently, the board does not need to notify owners or obtain their approval prior to replacing the existing turquoise siding with the new grey siding.

Question 2 – Painting Something a Different Colour

Board Member: Can we paint the existing turquoise window trim grey without notifying owners and without obtaining their approval?

Ashley: Since the existing turquoise window trim is in good condition and does not require repair, replacement or painting, painting the existing turquoise window trim grey does not constitute “repair” or “maintenance” work. Thus, the answer to Question 2 of the set out in Harvey would be “no”.  Accordingly, painting the existing turquoise window trim grey would constitute an alteration to the common elements for which the board would have to comply with subsections 97(2) through to 97(7) of the Act prior to proceeding.

  1. No Notice Required

If it is going to cost the corporation less than 1% of its annual budgeted common expenses for the current fiscal year to paint the turquoise window trim grey, the board does not need to notify owners or obtain their approval prior to painting the turquoise window trim grey, pursuant to subsection 97(2)(c) of the Act.

  1. Notice Required

If in the alternative, it is going to cost the corporation between 1% and 10% of its annual budgeted common expenses for the current fiscal year to paint the existing turquoise window trim grey, the board must notify owners of the alteration prior to conducting same, pursuant to subsection 97(3) of the Act. Once the board has notified the owners of the alteration, the board would only be permitted to proceed if the owners do not requisition a meeting within 30 days of receiving the notice, or if the owners do requisition a meeting within 30 days of receiving the notice, if the owners of a majority of the units present at the requisition meeting do not vote against the alteration at the meeting.

  1. Owner Approval Required

If in the further alternative, it is going to cost the corporation 10% or more of its annual budgeted common expenses for the current fiscal year to paint the turquoise window trim grey, the Corporation must notify owners of the alteration and the owners who own at least 66 2/3% of the units at the Corporation must vote in favour of the alternation at the meeting called for the purposes of voting on same, pursuant to subsection 97(4) of the Act.

[1] Harvey v. Elgin Condominium Corp. No. 3, 2013 ONSC 1273.

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