Determining Termination and reconciling s. 112 + 97 of The Condo Act with Common Law.

While still a live topic, Canadian Common law currently implements a very high hurdle to take advantage of section 112 of The Condo Act, which outlines the ability of the Condo Corporations to walk away from agreements that were made in the developer stage of the construction process.

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The fact that The Condo Act was made with the purpose of protecting owners from "sweetheart deals" and recent amendments have made attempts to lower the hurdle, imply that if brought to the Supreme Court, would favor the Condominium Corporation.

With respect to the termination costs for a Condo Corporation within the first year, Halton Standard Condominium Corp. No. 627 v. Grandview Living Inc. is the leading precedent.

In Grandview Living, The developer brought in long term energy related agreements which the Condo Corporation had no interest in entering into. From there it was found that in order to take advantage of section 112 of The Condo Act, it had to be used with section 97 which requires a 2/3 vote in favor to proceed.

In practice, achieving a majority vote of all unit owners is extremely difficult to achieve. In the case, the Condominium Corporation did not achieve a majority vote, began motions to appeal to the Supreme Court of Canada and ended up entering into arbitration with the Grandview Living and the provider and owner of the energy related infrastructure.

The result was that, the agreement was accepted to be lawfully terminated, the Condominium was not liable for any “termination amount or payment”. From there ownership and the respective fair market value of the different energy related infrastructure was determined and the Condo Corporation purchased ownership of the assets.