Real estate purchases are often the largest financial purchases a person or company will make. Therefore, it is important to work with an experienced real estate lawyer for any residential or commercial real estate matter to ensure you understand what your rights and obligations are in the event of any complications. By identifying and mitigating issues from the outset, a new resident can rest assured knowing that they are equipped for potential future issues.

A recent decision from the Court of King’s Bench of Alberta illustrates what can happen if certain factors, such as noise, are not considered during the initial transaction by a prospective buyer, and how such oversights can negatively impact future disputes.

Condo Owner Complains of Noise From Neighbouring Common Room

The case of Aubin v Condominium Plan No 862 2917, involved the plaintiff (“MA”) who owned a condominium unit in a building that was owned by the defendant condominium corporation (the “Corporation”). In 2008, MA became aware of noise transference from a common room lounge to her unit, and more specifically, her bedroom.

In her affidavit, she stated that she was able to hear people having conversations in the lounge, and during parties, the sound was so loud it was as though it was happening in her room. She added that there were noticeable vibrations in her room when music was played in the lounge, and when the wall was hit by a vacuum or furniture, it could be felt on her side of the wall.

Corporation’s Board of Directors Unable to Make Structural Modifications to the Shared Wall

MA served as a member on the Corporation’s Board of Directors (the “Board”) from 2012-2018, during which time she advised them of the problems she noticed. The Corporation agreed to bring in an acoustical consultant to measure the sound and instituted an 11:00 p.m. curfew on the room. However, MA was not satisfied with these measures and advised the Corporation that she would take further measures to ensure the wall was “brought up to code.”

In August 2018, the Board outlined its efforts in a letter regarding how the lounge is used, affirming that the wall was in good repair, and determined that it was unable to make any structural modifications to the shared wall. In the Board’s view, these modifications amounted to “an enhancement from the original condition of the property and fell outside of the mandate of the Board.” Furthermore, the Board acknowledged that MA “could make changes to her own Unit, subject to Board approval.”

Applications Judge Rules in Favour of Unit Owner

When the matter came before the Applications Judge, the Court was asked to consider:

• whether the Corporation engaged in “improper conduct” as defined under s 67(1)(a) of the Condominium Property Act and, if so, what the appropriate remedy was; and
• whether MA’s claim was barred by the limitation period.

The Applications Judge found that the Corporation had refused to investigate whether the wall was deficient in its allowance of sound to pass from one room to another, and that this amounted to “improper conduct,” adding that the Board’s actions (or lack of) were oppressive and unfair to MA.

Overall, the Applications Judge ordered the Corporation to retain an expert to identify whether the shared wall was reasonably adequate in its ability to reduce noise from entering MA’s room, and to identify options to bring it to the proper standard if not. When the parties were unable to agree to costs, MA was awarded costs of $32,948.62.

Corporation Retains Architect; Report Shows Wall Did Not Meet Building Codes

Following this decision, the Corporation retained the services of an architect to review the acoustical performance of walls between the lounge and MA’s unit, and to determine whether the walls in question complied with the National Building Code of Canada: 1970 (“1970 Building Code”), which was when it was built. A final report indicated that the walls did not meet the sound transmission class of the 1970 Building Code, although no recommendations were made. The Corporation was also invoiced a total of separate invoices totalling $10,383.11 for this work.

The Corporation proposed the addition of thicker drywall as well as asbestos remediation, which would meet the 1970 Building Code requirements, although it was determined that this would not comply with present-day fire standards. The architect suggested adding 5/8” gypsum board on both sides of the wall, with fire stops at the top and bottom of the wall, however, the Corporation held firm in its proposal to only add 5/8” drywall to the existing wall.

Condominium Corporation Appeals Decision of Applications Judge

The Corporation appealed the Applications Judge decision and argued that:

• the decision erred by finding “improper conduct” by the Corporation;
• the Applications Judge did not apply the correct legal standard in finding its analysis of the situation to be improper; and
• that the costs award should be overturned.

The Court of King’s Bench first turned to the Condominium Property Act, which identified two forms of as non-compliance with the legislation, conduct that is oppressive or unfairly prejudicial of an interested party, among other things.

Moreover, the Court highlighted the fact that section 37 of the Condominium Property Act places certain duties on condominium corporations, including that it is:

“… responsible for the enforcement of its bylaws and the control, management and administration of its real and personal property, the common property and managed property.

(2) Without restricting the generality of subsection (1), the duties of a corporation include the following:

(a) to keep in a state of good and serviceable repair and properly maintain the real and personal property of the corporation, the common property and managed property;”

Court Finds No Improper Conduct by Condominium Corporation

The Court then turned to the two-part test for determining whether there has been “improper conduct” within the corporate context and requires the Court to consider:

1. Was there a breach of reasonable expectations?

2. If there was a breach, is the conduct complained of oppressive, unfairly prejudicial, or does it unfairly disregard the interests of the complainant?

The Court found that when MA purchased her unit, it was “more likely than not” that she knew her unit shared a wall with the lounge, as this was the only unit that did so. As such, a reasonable amount of noise could be expected. The Court also found that the Board’s recommendation in remediation was reasonable and was also within its allocated budget. The Court added that, just because MA did not agree with the Board’s offer, this did not necessarily amount to oppressive, unfairly prejudicial, conduct, or an unfair disregard to her interests.

As a result, the Court ordered that the costs portion of the decision be overturned. Further, the Court acknowledged that there may be avenues for remedy outside of the Condominium Property Act, which the Corporation would have to make a decision about in relation to a 1970 Building Code violation, but noted that the facts of this case did not present a section 67(2) issue.

The DBH Law Property Lawyers Provide Comprehensive Real Estate Services in Condominium Purchase and Sale Transactions

The purchase or sale of a new home or condominium unit is a substantial investment with possible risk involved. Therefore, working with a trusted real estate lawyer can ensure that you are prepared for what might be thrown your way. At DBH Law, our experienced Calgary real estate lawyers work closely with clients, from initial review of a purchase and sale agreement, to identifying potential risks, and ensuring the transaction closes smoothly. To learn more about how our real estate team can help you, contact us by phone at 403.252.9937 or reach out to us online to schedule an initial consultation.