
When issues arise in condos, there are benefits to working with those involved to address them. Collaborating offers advantages unavailable through an adversarial path – such as relationship preservation and creative, sustainable outcomes which extend beyond a tribunal’s jurisdiction. The Condominium Authority of Ontario offers an array of online resources to support collaboration, from communication guidance to help identifying issues, to understanding how the law applies to them and more.
The CAO’s Condominium Authority Tribunal further encourages collaboration within its three-staged online process. Once a case is filed, parties experiencing a dispute are invited to address their issue together through negotiation. Failing that, they are assigned a mediator. A case only moves ahead to a hearing if the parties cannot figure it out amongst themselves. Most cases filed with the Tribunal are resolved in these stages. When that occurs, the online system can help capture dispute resolution by automatically generating a binding Settlement Agreement. Since launching in November 2017, hundreds of settlement agreements have come together through this system. The CAO helps the condo sector capture approximately 80 settlements a year.
The precise resolution terms agreed upon can be just as important as capturing settlement in writing. So, what does a good settlement agreement include? Here are some considerations that draw on the experience of the CAO and its Tribunal:
1. Forward-Looking Details
Good settlement agreements clearly lay out who will do what, when, where and how. Looking back, you should be able to answer any question of compliance with the details in the agreement and a simple “yes” or “no”.
Clarifying what is going to happen next is better than trying to agree on how to explain the past. Negotiations risk falling apart if there is too much of a focus on trying to agree about what already happened instead of looking ahead.
Problems emerge when settlement terms are not precise. Missing details can lead to the belief there is an agreement when there really is not. Absent a clear indication of exactly who will do what, when, where and how, you may need an adjudicator to interpret the meaning of your settlement agreement. When that happens, self-determination is lost – as the parties no longer control their own outcome.
Let’s take the example of a condominium resident signing onto a settlement agreement with their condo. It calls for them to abide by the governing documents of the community going forward. What has the resident agreed to do? If the problem is where the resident has been storing their summer tires during the winter months, their specific commitment to no longer store tires in their parking spot should be in the agreement. While a general compliance commitment may be a nice sentiment to capture, it leaves too much open to future interpretation. Clearly setting out precisely what is going to happen moving forward is our best practice recommendation.
2. Existing Guidance
The CAO’s online system provides a template that parties can use to produce their Settlement Agreement. Templates of this nature often include clauses about confidentiality and other matters that can be helpful for making settlement agreements across a wide array of issues. While it is important not to assume what is presented as standard will work for you, the idea is to leverage what already exists, so you do not find yourself trying to re-invent the wheel.
The Tribunal’s Settlement Agreement template includes a clause that requires written permission of all parties to share details or copies of the agreement. Where disputing parties find it enough of a task to agree on their forward-looking settlement details, the template helps them produce a complete agreement.
3. Outcome Limitations
While collaboration is often promoted as having endless possibilities, that is not so when laws and related restrictions apply. In the world of condominiums, provincial legislation and local restrictions through the condo’s governing documents apply. It does not work to simply ignore the law or the declaration, by-laws and rules of a condo. Working together has room for creativity, yet it can be important to be aware of outcome restrictions when making your settlement agreement.
A classic example of this surrounds the important legal restriction that condominium corporations can only use reserve fund monies for the major repair and replacement of their common elements and assets. Even if a condominium wanted to enter into a settlement agreement that called for it to use reserve funds monies for another purpose, it cannot legally do that.
4. Enforceability
We often do not want to think about having to enforce a settlement agreement when riding the momentum of cooperation in coming to resolution. Yet, it can be important to consider what the process would look like if enforcement steps are necessary. Some settlement agreements set out consequences in the event of a breach or clarify the path of enforcement. In the case of the Tribunal, parties to a case that has been resolved by a Settlement Agreement can return with a new case to seek a compliance order.
Reality checking the path to enforce compliance is worthwhile. Consider a situation where a condo owner agrees to evict their tenant if an issue persists. The owner cannot achieve that outcome alone. Considering enforceability and appreciating tenant rights, related settlement terms typically have the owner commit to issuing the required form to embark on the eviction process should a problem where eviction may be appropriate continue. Thinking through enforcement allows for realistic expectations.
5. Who is Included
Your Settlement Agreement should capture the commitments being made by the parties signing it. It should not try to compel those who are not part of the agreement to the settlement terms. You can only enforce a settlement agreement against those who are party to it.
Consider a case where a unit owner and condominium corporation agree to settlement terms that require neighbours living below to stop behaviour that has been bothering the unit owner. As the neighbours are not part of the settlement agreement, they are not bound to it.
You will run into problems trying to have someone who did not sign the settlement agreement abide by it. Keep your settlement agreement to the commitments of those who sign it.
Good settlement agreements are detailed, specific, recorded in writing and signed by all parties. They capture what everyone agreed to do and provide a pathway to a positive outcome when terms are clear.
—
The examples provided in this article are offered generally. Details of each particular situation impact what are appropriate and enforceable settlement terms. These tips cannot replace legal advice.
The post Getting Resolution Right: 5 Things to Consider When Making Settlement Agreements appeared first on Slaw.