Grandfathering Clauses in Condominium Corporation Documents
In New Brunswick today, many condominium corporations are considering whether or not to make changes to their governing documents (Declaration, By-Law). There are lots of good reasons to make changes.
- Any corporation that was registered prior to January 1, 2010, when the new Act came into effect, may want to modernize their documents and remove any old wording that is no longer applicable.
- If a corporation wants to be sure a Rule or Provision can be enforced, it must be included in the By-Law, approved by the Director of Condominiums and registered with Service New Brunswick.
- Corporations may want to include new Rules and Provisions to respond to changing needs.
- And corporations are wise to consider including more effective measures related to insurance, renovations in Units, rental of Units and others.
And many corporations are considering the inclusion of grandfather clauses. Note: For the purpose of this article:
- Rules means RULES AND REGULATIONS GOVERNING THE USE OF THE COMMON ELEMENTS (usually SCHEDULE A of the Corporation’s By-Law). This is what is permitted or not permitted on all of the Common property.
- Provisions means PROVISIONS RESPECTING THE USE AND OCCUPATION OF UNITS (an ARTICLE in the Corporation’s By-Law). This is what is permitted or not permitted in individual Units.
When making amendments, should a condominium corporation use a grandfather clause?
Sometimes a condominium corporation amends a Provision or Rule in their By-Law to prohibit an activity within the Unit or on the Common Elements. This includes activities that previously were permitted. Sometimes, these amendments should include a grandfather clause.
What is a grandfather clause?
A grandfather clause protects the right of an Owner who bought their Unit before the amendment (ban of a certain activity) was made. A grandfather clause allows any Owner who currently lives at the property to be exempt from the amended Provision or Rule.
Why are grandfather clauses needed?
Amending a Provision or Rule may change what an Owner was previously permitted to do. They may have purchased the Unit based on what Provisions and Rules existed at the time. The Owner may feel aggrieved that their right has been removed. Although there is no legal requirement to include a grandfather clause, a corporation is advised to consider one. Without a grandfather clause, the Provision or Rule may be challenged as being “unreasonable”. Therefore, grandfathering an existing right demonstrates the condominium corporation is acting in a reasonable manner.
Does a grandfather clause expire?
It is possible for exemptions to include some additional limitations and eventually expire. For example:
- Many corporations include additional limits for smoking exemptions, such that when the current Owner sells the Unit or passes away, the exemption ends.
- In the case of garburators, an exemption can place limits that require the immediate removal of the garburator upon sale of the Unit or failure of the garburator.
- An amendment that limits the maximum weight of pets, could include an exemption for pets that currently exceed the weight limit, but only until the exempted pet passes away or the pet’s Owner moves. The corporation can even include in the exemption to state whether or not a grandfathered pet over the size limit can be replaced with another pet over the size limit or not.
Is grandfathering required?
There is no requirement for condominium corporations to include a grandfather clause when they amend or add new Provisions and Rules. So it is not legally required. And the New Brunswick Condominium Property Act doesn’t place any obligation to include grandfather clauses. But all Provisions and Rules must be “reasonable”. An Owner who purchased a Unit in a building and confirmed smoking was permitted, may feel a complete ban on smoking is not reasonable. And the Owner may have a strong legal argument. This is where a grandfather clause could ensure a reasonable balance between protecting an existing Owner’s right and introducing Provisions and Rules that reduce the amount of second-hand smoke. So, although there is no legal obligation to use a grandfather clause, it’s a good idea to consider them.
Must a grandfather clause always be used?
Sometimes a grandfather clause will be used for a Provision, but not in a Rule. For example, a Provision could grandfather an Owner’s right to smoke inside his Unit and a Rule may not grandfather an Owner’s right to smoke on the Common Elements. And keep in mind, if no one in the condominium currently smokes, there is no need for a grandfather clause.
The enforcement of Rules and Provisions can be a balance of competing interests. There are Owners on both sides of the fence who want to protect their own preferences. On one side are those who prefer the benefits of a smoke-free property and on the other are those who feel threatened and prejudiced at attempts to remove their perceived right to smoke in their own home; and there are those who prefer no pets on the property while others feel pets are part of the family and should be welcome anywhere on the property.
It is certainly easier for the Board to deal with complaints when Rules and Provisions existed before the new Owner moved in. That’s why potential buyers should become familiar with the Declaration and By-Law prior to buying a condominium Unit. It’s not just about the location.
But when Rules and Provisions are changed or when new ones are introduced, it could place a ban or restriction on what was previously permitted. Owners who were previously allowed to smoke may feel the changes are unfair and targeted at them. But, other Owners who are concerned about second-hand smoke or who have respiratory health issues and cannot tolerate second-hand smoke may feel the changes are needed to protect their rights.
So the balance may be a “reasonable” approach that includes a grandfather clause. This allows existing Owners to be exempt from the Provision (inside their Unit), but not necessarily the Rule (on Common Elements). This exemption can have specific end dates, a requirement for certain conditions to be met, and terminate upon the sale of the Unit. But otherwise the Owner may be exempt from the new Provision and/or Rule.
For more information on the use of grandfather clauses or questions about making amendments to Declarations and By-Laws, contact Condo-Link Services. We can provide information on what Rules and Provisions can be created, and explain the process for amending the PROVISIONS RESPECTING THE USE AND OCCUPATION OF UNITS and RULES AND REGULATIONS GOVERNING THE USE OF THE COMMON ELEMENTS. www.condo-link.ca 506-206-2080