In Ontario, condominium unit owners may wish to personalize or improve spaces that are part of the common elements, including balconies, patios, driveways, or yards which may be exclusive-use common elements. Exclusive-use common elements are technically common property but are set aside for the private use of specific units. Under the Condominium Act, any modification to such areas typically requires a formal Section 98 Agreement.
A Section 98 Agreement is a legal document entered into between the unit owner and the condominium corporation. It governs alterations, additions, or improvements made by a unit owner to common elements. These agreements serve several key functions:
- Clarifying Permissions: The agreement formally authorizes the owner to carry out the proposed modification. Without it, even well-intentioned changes may be deemed unauthorized and subject to removal at the owner’s cost.
- Allocating Responsibility: Section 98 Agreements clearly assign responsibility for maintenance, repair, and replacement of the alteration to the unit owner. This protects the condominium corporation from bearing unexpected costs in the future.
- Transferring Obligations: Once registered on title, the agreement generally binds future owners of the unit. This ensures continuity in responsibility and avoids confusion during resale or turnover.
- Protecting the Corporation: These agreements often include provisions indemnifying the corporation from liability related to the modification, as well as requirements for additional insurance coverage where appropriate.
Boards of directors must approve the agreement before it is registered, and they have discretion to request design plans, engineering reports, or legal opinions before doing so. They must also act reasonably and consistently to avoid allegations of discrimination or bad faith.
From the owner’s perspective, legal counsel is strongly recommended before proposing or signing a Section 98 Agreement. It’s essential to ensure the alteration is compliant not only with the Act, but also with the condominium’s declaration, by-laws, and rules.
A properly drafted Section 98 Agreement balances the interests of both the unit owner and the condominium corporation. It enables individual improvements while protecting the integrity of the community and the value of the property as a whole.
For any owner contemplating changes to exclusive-use spaces, and for boards managing such requests, understanding and utilizing Section 98 properly is both a legal necessity and a practical safeguard.
