CONDOMINIUM ADR FAQ

Condominium ADR: 'The Basics' of Section 132

In 2001, the Condominium Act was changed significantly: the old system for summary applications to courts was replaced by Section 132 of the new Act.  Under Section 132, a condo corporation can still seek to enforce compliance with its declaration, bylaws and rules through normal cooperation, letters and formal notices.  What it cannot do is go directly to court for enforcement.  Section 132 mandates a three-step resolution process: (1) mediation, (2) arbitration (if mediation is unsuccessful or impossible), and (3) a compliance order from court if there is no compliance with the arbitrator’s decision.

Which disputes must go through ADR and which do not?

As condominium Owners and Managers know, most compliance cases arise out of 'people, pets, and parking'... disagreements over or infringements of the declaration, bylaws and rules of the condominium corporation are the most common areas of dispute or disagreement.  These cases are now subject to mediation and arbitration, as are, for instance, agreements between two or more condo corporations (e.g. shared facilities agreements), property management agreements, and dissenting Owners’ rights on sale of part of the condominium property.

Some disputes don’t fall within this mandatory ADR stream.  For example, oppression claims, disagreements regarding the Condominium Act itself, property assessments, enforcement actions against tenants of a condo unit, or third party supplier disputes are all still handled by the normal court or tribunal systems.  A condominium may use ADR to handle some of these situations... for example, it may have an ADR contract or clause with its suppliers mandating arbitration rather than Superior Court actions... but the Act does not mandate that.

Complete details on which disputes are and are not subject to mandatory ADR can be obtained through one of Camberwell House's condominium ADR information sessions.

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Condominium Mediation

Courts and confrontation are not good for the ongoing relationships within your condominium community: neighbors, the Board and the Property Managers must continue to deal with each other cooperatively, and going to court can 'divide people and increase hostility.  Mediation looks to the future.  It helps end the problem, not the relationship'.[1]  The focus remains on you the condominium community and its individuals; mediation allows you to look at the underlying issues and problems and looks to joint solutions rather than imposed results.  It permits and encourages 'sensible compromises and creative solutions', as noted ADR specialist Murray Miskin notes.[2]  It is also more effective.  'Participants in mediation report higher satisfaction rates than people who go to court.  Because of their active involvement, they have a higher commitment to upholding the settlement than people who have a judge decide for them.  Mediations end in agreement 70 to 80% of the time and have high rates of compliance'.[1]

Mediation is also far less formal and intimidating and confusing than the court systems.  'There are no strict rules of procedure, this flexibility allows the people involved to find the best path to agreement.  Mediation can deal with multiple parties and a variety of issues at one time'.[1]  It is also far, far faster than going to court, far less expensive, and it maintains privacy.

The advantages of condominiums are well summarized by Murray Miskin.[2]  "If a serious effort to resolve a dispute is made at mediation it will usually succeed.  Often mediation is not taken seriously for a variety of reasons.  The old mentality of `taking them to court’ still exists with the hope of a party to show the other party that they are wrong.  Arbitration is more satisfying than mediation at meeting the self righteous response to a dispute.  Condominium Managers and Boards tend to believe their rules are carved on stone tablets and must be obeyed or there will be dire consequences.  Unit Owners do not accept the freedom they lose when they agree to be part of a condominium community.  Mediation allows for sensible resolution of the type of disputes that arise in condominiums”.

Camberwell House can provide your condominium with such an effective, tailored solution.

[1] “What Are the Advantages to Mediation?"  External Link
 [2] Miskin, Murray H. “Give Mediation A Chance: The High Price Of Condominium Arbitration”.  Reprinted from The Lawyers Weekly, September 15, 2006

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Condominium Mediation: Who bears the costs?

The cost of the mediator and the process itself will depend on the mediator’s rates, the cost of any disbursements, the complexity of the case and how long the process takes.  Generally speaking, the more co-operative the parties are then the shorter and thus less expensive a mediation will be.  The parties are free to craft a cost-sharing plan on a case-by-case basis, they may use the one mandated by the mediator or they may craft a formal structure within their ADR by-law.  If the matter arises out of a formal dispute under the Act then Section 132 specifies that each party shall pay a share of expenses as specified by the mediator.  The parties can, by agreement or bylaw, set a system which fixes how the mediator will do this.

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Condominium Arbitration

If mediation fails (for example, if the parties cannot reach an agreement) or is not available (for example, if one or more of the parties refuses to participate) then arbitration of the dispute is mandatory; the courts will refuse to hear a condominium dispute that falls within the required ADR provisions of the Act.

Condominium arbitration in and of itself is little different than any other arbitration: parties to a dispute agree to resolve it outside the court system by referring it to an agreed-upon person (the 'arbitrator' or 'adjudicator') by whose decision they agree to be bound.  Evidence is provided, documents exchanged, arguments made and a decision rendered; oral testimony by witnesses is usually involved.  The parties can agree that an arbitrator's decisions can be enforced through the court system as if they were a court judgment.  How simple or complex the process is will depend on the seriousness and complexity of the dispute itself, the ADR processes set out by the condominium in its by-laws, whether lawyers are representing the parties or not, and a host of other factors.  It is definitely more formal and more expensive than mediation but less formal and less expensive than court.  Like court it is a 'win-lose' dynamic and does not hold the 'win-win' possibilities often found in mediation.  Unlike court, the parties will have had a chance to tailor the process to their specific needs in order to maximize effectiveness and minimize cost.

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Condominium Arbitration: Who Bears the Costs?

Parties to an arbitration will incur costs as they prepare and present their case.  An arbitrator has authority to award what are called 'costs' to one side or the other, meaning that he can order that all or part of the costs incurred by one party be paid by another.  An ADR bylaw can clarify how costs are awarded.  (For example, two condominiums arbitrating a shared facilities agreement may wish to set a specified division of the costs for good faith dispute resolution regarding matters that they are uncertain about.)  The cost of an arbitration will definitely be higher than those of a mediation, and can be quite high if the dispute is lengthy and complex.  Unlike court, however, such costs can be minimized by the parties themselves through a bylaw or subsequent agreement(s) as to how the arbitration will proceed.  The arbitrator may assist in structuring those processes, or the earlier mediator may play a role, helping to craft an agreement on the arbitration process (including agreed facts, documents at issue, etc.) even though one is not possible on the substance of the dispute itself.  There are ways to minimize the costs of arbitrations: for example, in cases where no resolution is reached in mediation it is Camberwell House's policy to use the mediation process to settle as many things as possible in advance of the arbitration.  Statements of Agreed Facts, joint documents books and other such efforts can reduce the length, complexity and cost of the arbitration, allowing the parties to focus solely on the significant, unresolved issues.

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Handling Condominium ADR Requirements

What should Boards and Owners do?

Problem Prevention, Problem-solving and By-laws

Boards should....

• Maintain and improve day-to-day communication, information-sharing and informal dispute resolution; many court cases... and their high costs... arise solely out of bad communication.
• Draft an ADR by-law.  In doing so:
  • Obtain the services of an ADR professional to assist in drafting the bylaw.
  • Ensure that the ADR bylaw is complete, with a clear and user-friendly process covering all likely contingencies (refusal to participate, selection of arbitrator(s) or mediator(s), how costs will be handled, etc.).
  • Have the process open to Owners and welcome their participation; do not just 'leave it to the Board'.
  • Have an ADR professional or selection process fixed selected in advance: a 'go-to person' who can become familiar with your condominium’s unique needs.
  • If a dispute arises, get everybody to the table as quickly and effectively as possible.
  • Draft to avoid costs!  Do not let process or events get 'over-costly' or 'over-lawyered'.

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