Decisions from the CAT: Policies Are Not Rules

Boodram v. Peel Standard Condominium Corporation No. 843, 2021 ONCAT 31

Introduction

In Boodram v. Peel Standard Condominium Corporation No. 843, the Condominium Authority Tribunal (the “CAT”) discussed the difference between: (1) ‘rules,’ and (2) ‘policies’ in the enforcement context. The CAT determined that condominiums cannot use ‘policies’ to clarify and enforce vague requirements set out in their governing documents. Rather, for enforcement purposes, such uncertainties must be clarified by ‘rules’ duly enacted with the support of unit owners pursuant to section 58 of the Condominium Act, 1998 (the “Act”).

Facts

Here, the Unit Owner brought an application, challenging Board decisions related to visitor-parking. The Condominium’s Declaration stipulated that only ‘invitees and guests’ were authorized to use the Visitor Parking spaces: i.e., residents could not use such. However, the Condominium’s governing documents provided no clarity with respect to the meaning of residents or ‘guests.’ An individual associated with the Unit Owner frequently used the Visitor Parking spaces. Relying on enforcement-related ‘policies,’ the Condominium asserted that, based on the frequency of use, the individual was in fact a resident, and was thus not eligible to use the Visitor Parking spaces.

Policies Cannot Be Used In lieu of Rules for Enforcement Purposes

While the CAT determined that there was insufficient evidence to establish that the individual was a resident rather than a guest, it proceeded to provide guidance on the distinction between ‘policies’ and ‘rules’ for enforcement purposes.

In support of its use of ‘policies’ to clarify and enforce the Declaration’s Visitor Parking requirements, the Condominium identified caselaw supporting the employment of ‘policies’ by condominiums, particularly in the context of facilitating section 98 agreements. The CAT acknowledged the importance of ‘policies’ in condominium governance, stating: “a board may have in place policies that provide a consistent and reliable framework to guide its conduct and conclusions in a decision-making process.” However, the CAT determined that ‘policies’ cannot be used to create and enforce binding requirements on unit owners. Accordingly, the CAT determined that the Visitor Parking policy was unenforceable unless and until it was enacted as a ‘rule.’

The CAT’s reasoning with respect to the unenforceability of ‘policies’ was grounded in the fact that, unlike ‘rules,’ the Act does not empower condominiums to create ‘policies.’ The CAT underscored the fact that the Legislature created a specific ‘rule’-enacting regime. The CAT added that condominiums cannot: “by-pass the mandatory, democratic process for enacting rules under section 58 of the Act, and… establish by fiat – as policies, without any sort of democratic notice or review – the sorts of conditions and restrictions the Act indicates are the proper subject matter of rules made under section 58.”

Bottom Line:

Governing documents cannot capture all scenarios. Instances will arise where clarification is required for enforcement purposes. However, while they are an important tool, ‘policies’ are not ‘rules;’ they cannot be used to bypass section 58 of the Act. Where ambiguities arise, condominiums must: (1) enact proper ‘rules,’ or (2) seek an amendment to the relevant governing document. ‘Policies’ should be utilized where the Act, Declaration, or By-laws permit discretion; ‘policies’ can guide Boards in the proper use of such discretion. Counsel should be consulted when clarification is required for enforcement purposes.

If you have any questions or concerns about these policies, contact our team of lawyers.

Written by Jamie Cockburn, edited by Christopher Mendes, and Robert Mullin.