Condominium Retroactive By-Law Unenforceable #263

By Gerry Neely
B.A., LL.B.

A ground level strata unit had a patio on common property, which was reserved for the exclusive use of the owners of the unit. Buyers who purchased it installed a hot tub about June of 1995. The patio was entirely surrounded by the wall of the building, a fence and gateway. The hot tub could only be seen by someone who went out of their way to look between the slats of the gate, or stood on a ladder and looked over the fence.

The strata council objected to the tub for a variety of reasons, including increased insurance liability, failure to obtain the approval for additions to the exterior of the strata lot, and the potential disturbance to neighbours. In November, 1995, the by-laws were amended to prohibit the installation of a hot tub.

Some of these objections had their origin in the 1985 by-laws, which required approval for alterations to the exterior and prohibited acts which might increase or invalidate the insurance coverage. The strata corporation however, was unable to present any evidence in support of these arguments, and the owners were able to establish that there had been no noise complaints.

The judge followed the case referred to in Column #188, in which a judge said that a garden shed constructed upon a patio was not part of the definition of "the exterior of the building". He concluded that the strata corporation did not have the power to pass a by-law which would have this retroactive effect. In reaching the decision that the hot tub need not be removed, it is obvious from the Reasons for judgment, that he thought the concerns of the property manager and strata council were exaggerated.'

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Damages for mental distress, arising from the breach of a contract for the buyer or seller of real estate, is rarely claimed and where claimed more often than not denied. The test is whether the person claiming mental distress should be compensated for damages the other party should reasonably have anticipated would be suffered, because of the breach of the contract.

An example of the application of this test is found in an Alberta Court of Appeal decision involving a developer's condominium project, one unit of which he agreed to sell to a husband and wife. The condominium unit was to be occupied by the wife's elderly father, whose special needs required changes to the plan prepared by the developer. As a result of these changes, the developer was well aware of her concern for her father.

Completion was to be in six months, but a number of problems led to continued extensions of the date for closing. When the developer was faced with reducing the number of units, which increased the size of the husband and wife's suite, the developer demanded a substantial increase in price. When that demand was refused the developer declared the contract at an end.

By this time, a further six months had elapsed and the increase in property values in Calgary made purchasing a home there unaffordable. They moved to British Columbia where her father lived, so that they might look after him and in doing so the wife received half the salary she had been paid in Calgary.

They sued the developer for damages, obtaining an award of $70,000 for the difference in value of the condominium contract price, and its market value at the date the developer terminated the contract.

The judge was satisfied that the loss of her dream house, her inability to care for her father in it, having to move elsewhere and taking such a substantial reduction in her salary, were the causes of her mental distress. All of these were directly linked to the breach of contract and since the developer was aware of the special circumstances, further damages of $7,500 were awarded for her mental distress.2

	1.	The Owners of Strata Plan NW243 v. Hansen, S.C.B.C., Vancouver, Reasons for judgment, August 7, 1996.
	2.	Kempling v. Hearthstone Manor Corp., 1968, 8 W.W.R., 735.

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