Chapter 6: Finances

• Pages: 149-168
• Author: Robert Mullin

149

CHA PTER 6

FINANCES

1 INTRODUCTION

[1] Condominiums escape easy legal comparison. They may be de-

scribed as par t corporate, planning, or real est ate law. Looked again,

condominiums may also appe ar as financial institutions. Individ-

uals, otherw ise strangers to each other, mandatorily remit funds to a

communally owned yet independent legal entity. A condominium is

a corporation created by provincial legislation. In turn, this entity’s

finances are governed by str ict statutory and regulatory requirements.

The collection of funds, the setting of an annual budget, the payment

of expenses, and investing are all actions to be per formed by the con-

dominium on behalf of the unit owners, via an elected board of direc-

tors. Unit owners are permitted to m ake few, if any, of these fina ncial

decisions, but the condominium’s financial activities are an open book.

In addition, an independent annual audit is per formed and circulated

to the unit owners to ensure bot h the accuracy of the condominium’s

financial statement s and their compliance with the Condominium Act,

1998 (the “Act”).1

SO 1998, c 19 [Condo Act]. 1

CONDOMINIUM LAW IN ONTAR IO

150

2 THE “LIFEBLOOD”

[2] Condominiums appe ar to perform many simultaneous functions.

At heart, they pool a physical and jointly ow ned asset. Whether the

physical asset is a residential high-rise tower or a commercial ma ll, the

eort is the same: owners sha re in the communal ownership of real

property. This jointly owned asset, however, creates its own unique

financial needs, duties, and responsibilities. The courts h ave held,

“Money to pay for the expenses of the common property and services

is the lifeblood of the common interest [condominium] community.”2

To ensure the collection, payment, and investment of such lifeblood is

not overlooked, these functions are strictly governed by condominium

legislat ion.

A Common Expenses and Fees

[3] A condominium, while bei ng fiscally responsible to the unit

owners,3 will be required to pay for common expenses, representing

the financial obligations of the corporation. Common expenses are

given a broad statutory definition, being: “the expenses related to the

performance of the objects and duties of a corp oration and all e xpenses

specified as common expen ses in this Act in the regulat ions or in a dec-

laration.”4 In turn, a condominium’s declaration may list common ex-

penses found in the attending S chedule E.5 Generally, this sha ll include

utilities, insur ance premiums, landscaping contracts, mainten ance and

repair obligations, property management services, and professional

fees. The courts, however, have given common expenses a broad inter-

pretation; in one case, a condominium comprising a commercial mall

was permitted to collect common expenses fees for promotional adver-

tisement.6 The courts have furthered:

2 Wayne Hyatt & Susan Frenc h, Community Association Law: Cases an d Materials

on Common Interest Communiti es, 2nd ed (Caroli na: Carolina Academic P ress,

2008) at 271. See also York Condominium Corp No 482 v Christ iansen, 2003 Car-

swellOnt 6533at para 16 (ONSC) [Christiansen].

3 Wong v Toronto Standard Condominium Corp No 1918, 2022 ONSC 3409 at

para 72.

4 Condo Act , above note 1, s 1(1).

5 Ibid, s 9. See also O Reg 48 /01, s 6.

6 1240233 Ontario Inc v York Region Condominium Cor p No 852, 2009 CarswellOnt

3 at para 46 (ONSC).