You May Have to Contribute to Shared Services, Even Without a Cost Sharing Agreement

by Jonathan Miller

The Court of Appeal has confirmed in a recent decision that condominium corporations may be required to share in maintenance and repair costs of amenities benefitting them, even in the absence of a cost sharing agreement. 

Ottawa-Carleton Standard Condominium Corporation No. 656 ("656") and Carleton Condominium Corporation No. 519 ("519") are both supplied with electrical service from an electrical vault located on 519's property, and forming part of 519's common elements. 519 was responsible to maintain and repair the vault, and there was no cost sharing agreement between the corporations allocating any responsibility for the costs of repairs to 656. 

519 claimed that 656 had to contribute to the costs of repair of the vault, which were significant, because 656 was being unjustly enriched. Unjust enrichment is a claim made to correct an imbalance where one party is getting a benefit, without a valid reason, to the detriment of the other party. Here, 519 claimed that 656 was getting the full benefit of the vault at no cost, while 519 had to bear all of the cost simply because the vault was a common element of 519. 656 denied that it was responsible to contribute to the costs of repair because 519 had a statutory obligation to repair its own common elements and there was no cost sharing agreement which required 656 to contribute to the cost of repairs to the vault.  

The Court concluded that 656 was unjustly enriched and that it should contribute to the cost of the repairs to the vault. In reaching this conclusion, the Court found that while 519 did have a statutory obligation to repair its own common elements (including the vault), this obligation did not extend to repairing the vault for the benefit of 656 without compensation. Importantly, the Court also rejected 656’s argument that the lack of a cost sharing agreement was ‘good reason’ for the imbalance in responsibility; accepting this  premise would completely eliminate claims for unjust enrichment in disputes between condominium corporations.  

The Takeaway 

The Court of Appeal’s decision provides some comfort to  condominium corporations that house infrastructure or services for the benefit of neighboring corporations that they are not necessarily left to bear the entire cost of maintenance and repair in the absence of a cost sharing agreement. The decision also serves as a warning that condominium corporations may be responsible to contribute to repair costs of facilities or infrastructure from which they benefit even when there is no cost sharing agreement in place.