Agreements
Short Answer
An exchange of promises (commitments or covenants) between two or more persons with respect to something of mutual interest or concern, setting out such persons' rights and obligations in regard thereto. Condominium corporations are persons at law and entitled to enter into binding agreements with various parties.
Definition
An agreement may be described as a “meeting of the minds” of two or more parties setting out their respective rights, expectations and/or obligations toward one another or toward some other person or thing that is of mutual interest or concern. Agreements may be oral or written. Typically, at law the term “agreement” refers to a contract in which each party makes promises to the other(s) in exchange for “consideration,” which is some value exchanged by the parties, sometimes consisting only of the mutual promises themselves or their fulfillment.
There is a great variety of contracts into which condominium corporations can and typically do enter, including: management agreements; service agreements (i.e., for landscaping, snow removal, maintenance contracts, etc.); cost-sharing and mutual use agreements; easement agreements; leases for common elements or for units owned by the condominium; and agreements under section 98 of the Condominium Act, 1998 (the "Act") pertaining to changes made to the common elements by unit owners.
There is a great variety of contracts into which condominium corporations can and typically do enter, including: management agreements; service agreements (i.e., for landscaping, snow removal, maintenance contracts, etc.); cost-sharing and mutual use agreements; easement agreements; leases for common elements or for units owned by the condominium; and agreements under section 98 of the Condominium Act, 1998 (the "Act") pertaining to changes made to the common elements by unit owners.
What you need to know…
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…as a Unit Owner
Owners are not entitled to disregard an agreement entered into by the corporation, even if they do not agree with the decision of the board to enter into such agreement. Owners also do not have the authority to interfere with the work being performed by persons contracted by the corporation including that they should not seek to give instructions to such persons or prevent them from completing the work that the corporation has hired and is paying them to do. However, an owner may have recourse to legal means of preventing or altering the terms of such contracts and should seek legal counsel if there appears to be good reason to do so. |
…as a Board Member
The Board of Directors of the condominium corporation is responsible for determining what agreements will be entered into by the corporation and for complying with them. Condominium corporations in Ontario are not subject to the "indoor management rule". Therefore, one or more directors acting independently cannot bind the corporation to an agreement. The decision to enter into any agreement must made by a duly made resolution of the Board of Directors (see sections 32(1) and 42(5) of the Act). Also, the board cannot abrogate its authority to decide about agreements to the unit owners. I.e., a vote at a meeting of owners as to whether or not a certain contract should be entered into is generally not binding upon the board, subject to such exceptional circumstances as where, for example, the vote is being made pursuant to section 97 of the Act or is in relation to a by-law permitting the corporation to enter into a loan agreement. |
…as a Manager
Unless expressly authorized by the management agreement or by specific resolution of the Board of Directors to do so, the manager of a condominium corporation is not entitled to bind the corporation to any agreement. Most reasonable condominium management agreements place express limits on the authority of the manager to enter into contracts. |
…as a Declarant
A declarant may (following registration of the declaration and description creating the condominium and prior to Turnover) cause the condominium corporation to enter into various agreements. However, the majority of these agreements can be terminated by the owner-elected board of directors after Turnover (see sections 111 through 114 of the Act). To avoid creating conflict within the condominium community shortly after Turnover, declarants should take care to ensure that the contracts they cause the condominium to enter into are in the best interest of the corporation and the future unit owners. Declarants who rely on their initial authority over the corporation to cause it to enter into contracts with the declarant's affiliated companies or service providers where it would serve the condominium and its owners better if the contract was with another party does a disservice to the condominium it has created and may be in breach of various legal, as well as moral or ethical, obligations. |