ABOUT CONDO
'BRANDING' YOUR CONDOMINIUM – STYLE & SUBSTANCE, TRADE NAMES & TRADEMARKS What’s in a name? Potentially, the whole reputation and public image of your condominium. Of course, the mere name of a condominium cannot carry all of that independently, but through appropriate “branding” * of the condominium its name can become associated with various qualities that can help to attract and keep owners and residents that suit the condominium’s features, facilities, services and the kind of community you want it to be. This memorandum has two parts: •
Part 1 provides a simple overview of the concepts of branding for condominiums – can it be done; who should do it; why should it be done; and how it can be done. •
Part 2 deals with certain specific and legal issues involved in branding, particularly the creation, use and registration of a condominium ‘trade mark’ or ‘trade name’. PART 1 – ABOUT BRANDING Can a condominium be “branded”? Absolutely. In fact, all condominiums are being branded already in one way or another. Unfortunately for many condominiums, this is being done unconsciously or is under the control of others (i.e., realtors) not residing in or committed to the community. Who should care about branding the condominium? Effective branding of a condominium is clearly a concern for condominium developers seeking to sell their products (i.e., units); but this memo is not written to them. Effective condominium branding is also a concern for unit owners and boards of directors of existing condominium corporations. For unit owners, whether the condominium has a positive or negative reputation can affect whether the units are marketable for rent or sale. *
The term “branding” referred originally to the mark placed on cattle by ranchers to identify to whom they belonged. Over time, the term has come to mean the image, name, personality, mark or style that is associated with a particular product, service or business.
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Land Development Law | Condominium Law | Corporate/Commercial Law
About Condo - Page 2
For the condominium board, we recognize that neither the overall marketability of the units nor the successful sale or rental of any particular unit is technically their responsibility. Nevertheless, it is appropriately within the scope of their mandate to be concerned for the sustainable viability of the community. This includes (amongst other things) seeking to ensure the condominium attracts and retains owners and residents who will contribute positively to its health and enjoyment. Effective branding – the deliberate creation, maintenance and expression of an image that reflects the best interests and intentions of the community – can help make that happen. What are proper goals of condominium branding? Branding is, in effect, ‘visioning’ your community. It is determining what it is and should be and how others ought to see it. A condominium should not necessarily look either to commercial branding or to other condominium corporations to determine the goals that are appropriate for its branding exercise. Commercial branding is particularly different. Unlike a business seeking to brand its products effectively, a successful condominium branding exercise is not going to be measured in terms of the volume of sales or new clients it generates. In fact, it is arguable that a condominium that experiences an increased number of unit sales or changes of residents may be experiencing “negative brand equity” – a brand that undermines the reputation of the product associated with it – unless constant turnover and lack of stable community membership are for some reason considered desirable, which would be uncommon to say the least. Also, no condominium will necessarily want to have exactly the same image, or attract exactly the same types of owner or resident, as every other. For example, one condominium might be family oriented while another endeavours to be known as a retirement living community. One might present an entertainment or active lifestyle image, with golf courses, bowling alleys or movie theatres included amongst it features and facilities, while another pictures itself as only a quiet community of householders. Having said this, however, there are certain general objectives that likely will be similar, if the not the same, for all condominiums and, indeed, for almost all branding exercises of any kind. These are represented by certain key concepts of successful branding which include such principles as status, empowerment and trust. Status An effective brand should make a customer feel better about him or herself just for acquiring or using the product or service in question. For condominiums, this could mean having reasonable pride in one’s community, feeling that just living there means the owner or occupant has reached a “good place” in his or her life, that this community is worth being a part of. Empowerment Effective branding also serves to represent the fact that the product or service being marketed addresses, and satisfies, a need, thus giving the consumer greater control or power over the circumstances and enjoyment of his or her life. About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 3
Empowerment in the condominium market results from establishing that the condominium provides living conditions that the potential owner or occupant of the property desires. These might include such qualities as: ‐
a sense of security (i.e., from crime or vandalism); ‐
a caring community (i.e., where neighbours know and support one another); ‐
a vibrant neighbourhood (i.e., where there is an active ‘social scene’ or a good environment for children to grow in); or ‐
environmental sensitivity (i.e., where the facilities of the property include effective energy conservation mechanisms or innovative land use, such as roof top or community gardens). Trust In commercial branding, trust is the belief the promises made will be followed through upon. This is also true of condominiums. This means that, for example, the promises made by a condominium corporation relating to status and empowerment must not just be empty words in fancy slogans, but must be real conditions that the condominium community can and does deliver. Indeed, from both a legal perspective and the perspective of effective marketing, it is important that claims made in any statement which is intended to induce people to consider purchasing or renting in the condominium, it is important that only the truth be told, and therefore that claims and promises not only can but will be fulfilled. Also, for virtually all condominiums, trust is most likely to be generated by a brand or reputation that demonstrates: ‐
consistency and fairness of corporate governance and rule enforcement; ‐
reasonable openness of communication within the community and with those seeking to be part of it; ‐
compliance with legislation; and ‐
maintenance and repair issues being dealt with quickly and competently. How is it done? Through the branding exercise, the board of directors, perhaps with consultation from professionals as well as unit owners, occupants, the property manager, and others, determines what the objectives, or vision, of the condominium should be, what type of image to be and portray. This will be determined by considering both the physical structure of the condominium and its location as well as the circumstances of the people now living in it. The objective might be to strengthen and promote the good qualities already existing, or to establish a new approach to the property (such as one Waterloo condominium that some years ago decided to stop fighting student lodging houses and embrace them as the primary use of the units). About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 4
Once the goals of the exercise are determined, the methods for achieving it can be considered. A variety of tools for establishing the condominium brand exist, some of which might be unique to condominiums. These tools might be divided into three general categories: 1.
Those that inform and prepare potential owners and occupants about the condominium’s brand concepts, preparing them to contribute appropriately once become owners and occupants, including such things as: ‐
materials provided along with a requested status certificate which set out in a basic and attractive format, key information about the property and community; and ‐
similar documentation specifically for realtors giving both practical “policy and procedure” information and also explaining the features and focus of the condominium and indicating the kind of unit owner or occupant for whom the community is ideally suited. 2.
Those that help to illustrate and/or indicate the substance of the brand without necessarily explaining it. These tools can seem superficial in nature, being focussed on image and impression rather than information, but they are important both because “a picture paints a thousand words” and also in the same manner that a face can communicate something about the personality of its wearer. These tools can include such things as a distinct name and/or slogan and/or visual mark or illustration that helps to represent the kind of community you want to be known as. It is with some of these tools that Part 2 of this memorandum is concerned. 3.
Those that serve to create the brand in fact and substance amongst owners and occupants of the condominium. They are essential for making the promises expressed through other branding tools true. These might includes such things as: ‐
crafting (and fairly and consistently enforcing) rules, by‐laws and declaration provisions that help to create the desired look and feel of the community, and restrict conditions that are contrary to it; ‐
preparing handbooks for unit owners and occupants (including “welcome packages” to new owners and occupants) that clearly and accurately set out and explain key rules, policies and procedures of the condominium and remind them what the focus of the community is; ‐
keeping the property in noticeably clean, good and attractive condition through adherence to high maintenance standards (as one website tritely but accurately states, “a well kept property is worth more than a neglected one”) and a well considered décor plan; and ‐
maintaining or establishing (subject to compliance with section 97 of the Condominium Act, 1998, as applicable) features, services and amenities that support the brand you want to convey. As the previous comments in this Part 1 of this memorandum suggest, ultimately good branding is not solely about image. The most effective branding exercise is one that involves primarily substance, the establishment and expression of actual qualities and characteristics of the community which are consistent with the objective of the brand. About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 5
Therefore, although the hands‐on work of branding a condominium should primarily fall to the board of directors, or at least be done under their direction and control, a really effective condominium branding exercise requires the unified effort of the board of directors, unit owners and residents, in conducting and managing the affairs of the corporation in a manner that is consistent with the goals of being a viable and enjoyable community of the type desired or envisioned. This unified effort, if achieved, will likely do more than any other thing to contribute to your condominium’s positive brand equity. PART 2 – TRADE NAMES AND TRADEMARKS When the condominium name and mark (i.e., logo), if any, are chosen by its developer, there has typically been some marketing expertise involved. Although that is not always the case, it can be expected that the developer has at least put a little thought into whatever impression the name and mark of the condominium should suggest. Initial purchasers were probably at least in part influenced by those elements of the marketing package when first deciding whether or not to check the property out. Despite this, but subject to any express provisions in an agreement (including municipal agreement) or the declaration, an existing condominium corporation undergoing a branding exercise, with or without its own professional consultants, can choose for itself a new name and mark if that is determined to be needed. Effective condominium names and marks are almost as varied as condominium types, locations and features. Name Elements Condominium names are crafted for various purposes. Most typically, they use words that evoke a sense of community, such as “Village” or “Commons”, or describe the type of home such as (romantically) “Villas” or (prosaically) “Building”. Some terms have strong contemporary marketing value for certain types of buyer or resident, such as “Towns” or “Lofts”, or, like the term “Commons” evoke a sense of past community traditions. Elements of a condominium name might also be based on the environs of the property. The “Village by the Arboretum” in Guelph, for example, is located beside the University of Guelph Arboretum. Or the name might be used to represent some distinguishing characteristic, such as the “Marilyn Monroe Building” in Mississauga, which is so named (perhaps only colloquially) to reflect the curvaceous shape of the building. Marks A mark used to distinguish a product or service can involve words or images, amongst other things. Sometimes it can be as minimal as a flourish or contain simple or complex logos or illustrations, or simply be the name of the condominium in a distinct font, as these samples from some Ontario condominium builders illustrate: About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 6
Protection of Names and Marks Several aspects of a branding exercise may be protected at law. For example, handbooks and other written materials used to explain the policies, procedures and objectives of the condominium corporation are likely protected under copyright law, provided they are “original” – i.e., not merely copies of the condominium’s governing documents. No registration of the copyright is required to have this protection; it arises automatically. However, it is unlikely anyone would seek to enforce this freely granted protection, since the very purpose of such documentation is that they be used and shared with all persons who could have an interest in the condominium and particularly all those who are expected to comply with its rules and procedures. A condominium name, and any logo or other mark (including the name written in a particular font) associated with the condominium, may have protection as well under intellectual property law, although it will be questionable whether such protection can or should be enforced in every case. Whether or not to take action to protect a condominium’s name or mark should be decided with the assistance of legal counsel on a case‐by‐case basis. What is written in this memorandum is for general information only. It is neither sufficiently detailed nor comprehensive enough to be reasonably relied upon as a basis for any legal action. Passing Off Under common law, trade names and marks can be protected through what is called a “passing‐
off” action. “Passing off” occurs when a person or company misrepresents his or her product or service, as if it were the product or service of another person. For example, a soft‐drink named “Coca Colda” would almost certainly be a case of “passing off” of the Coca Cola name and mark, especially if the same cursive lettering is used or if the person selling the drink said it was the same “Coke”. “Passing off” could potentially occur with respect to a condominium name or mark. There could be various motivations behind such misrepresentation. For example, one condominium might seek to mimic the images or name associated with another better managed corporation in which the units typically sell at a higher price. By using the similar name or mark, the less valued condominium might fool potential purchasers into paying higher prices, believing that they are buying into the same or a related community as the better valued one. The risk to the condominium whose name and mark are subject of such “passing off” is that its own reputation, and marketability of its units, might suffer because of the adoption of such name and marks by the less well run, less valued property. A successful action for “passing off”, however, is not as simple as just pointing out that the name or mark used mimics that of another corporation. Mere use is not actionable, even if it diminishes the value of the original mark. Rather, a successful “passing off” action would require some or all of the following to be proven: ‐
that the name or mark being mimicked is actually being used by the owner of it; ‐
that the name or mark being mimicked has actually gained a particular reputation; About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 7
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that the copy‐cat name or mark is being used in the same locality where such reputation exists; ‐
that the mimicry is intended to misrepresent a relationship between the two condominiums; and ‐
that some damage has actually occurred to the condominium corporation which uses the original name or mark because of such “passing off”. Registration Over and above the common law action for “passing off,” names and marks associated with a product or service, or a condominium corporation, may be further protected by registration. Protection of a registered name or mark is more certain than relying solely on the availability of a “passing off” action, and therefore registration is typically advisable. However, it is possible that costs or complexities which are not balanced by the benefits might reasonably convince a condominium board not to take this step. This needs to be discussed with legal counsel. It is also possible you will find that your condominium corporation’s name or mark is already registered as either a business name or a trademark, if the developer had registered it. Your legal counsel can help find out if this is the case. If it is, you might need to arrange with the developer for the name or mark to be assigned or licensed to the corporation. But, if it is not, then there are two basic types of registration might be available to you if wanted: (1) Trade name registration; and (2) Trademark Registration. •
Trade Name Registration It is advisable for every condominium board that seeks to promote its corporation using a trade name to discuss with legal counsel the possibility of having such name registered under the Ontario Business Names Act. Technically, this is something that not only should but must be done. The Business Names Act states that every corporation in Ontario, “wherever or however incorporated,” cannot identify itself to the public using any name “other than its corporate name unless the name is registered by that corporation.” * No exemption from this legislation exists in the Condominium Act, 1998, or the regulations thereunder, nor is an exemption for condominiums granted under the Business Names Act. A breach of the registration requirements of the Business Names Act can result in conviction and liability for a fine of up to $25,000.00 for the Corporation and a fine of up to $2,000.00 for each of the directors or officers of the corporation and every person acting as its representative in *
In addition, the Business Names Act prevents a corporation that is carrying on business under an unregistered name from maintaining a proceeding in a court in Ontario in connection with that business except with leave of the court and requires certain criteria, including registration of the name, to be met in order for leave of the court to be granted. However, it should be noted this relates to a party “carrying on a business,” which might not apply to condominium corporations in all cases. About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 8
Ontario who authorized, permitted or acquiesced in such an offence. In addition to avoiding those potential fines (if the condominium would be determined to be in breach for not registering its name under this legislation), the benefits of this registration are two‐fold. ‐ First, it requires the proposed name be searched beforehand. This allows you to better ensure you are using a unique name and therefore likely are not infringing on any other corporation’s use of the name. Your legal counsel can assist you in conducting the appropriate search of registered names. ‐
Second, the registrant of a business name who has suffered damages because someone else has registered the same name or one that is deceptively similar is entitled to take legal action through the courts to recover compensation for damages suffered and/or a court order cancelling the name registration that was the cause of the action. However, the maximum amount of damages recoverable is only $500. * •
Trademark Registration Trademark registration is an entirely different and more complex and costly process, and it affords a greater degree of protection for your trade name and mark(s). The benefits of trademark registration under the Trade‐marks Act (Canada) include the following: ‐ the entire mark (not only the business name as under the Business Names Act) could be registered, including style of lettering, colours used, illustrations or other images, and so forth, provided they meet the criteria of a valid trademark under the legislation; ‐
use of the mark is not a pre‐requisite to registration and reputation and use are not prerequisites for bringing a claim of infringement (such that trademark protection can be acquired and relied upon even if a “passing off” claim would fail for lack of use of the same mark); ‐
it is not necessary to prove damages to make a successful claim of infringement of a registered trademark (again, unlike in a “passing off” claim); ‐
protection of the mark is usually nationwide (not restricted to the locality of use, as with a “passing off” claim). Unlike copyright, trademark protection does not arise automatically. These additional benefits do not exist if the mark is not registered. Without registration, only the regular common law claims – i.e., “passing off” – can be made. To determine whether trademark registration is important for your condominium, your board *
An amendment to the Business Names Act (Ontario) that is to come into force at a future date will also extend this right of legal action to any use of the condominium corporation’s legal name even though it is not registered under the Act (since only trade names and not legal names are required to be registered). This would allow a condominium corporation to protect its formal name, i.e., Wellington Condominium Corporation No. 15, if that was needed.
About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP About Condo - Page 9
should consult legal counsel. You would also require the assistance of legal counsel to help determine whether your proposed mark is distinct enough from other marks to qualify for registration. It is our assumption that in the majority of cases condominium trademark registration could be ‘overkill,’ but we recognize there could be valid reasons for wanting it, possibly depending on the market in which the condominium exists or from which it would like to attract purchasers or residents. It should be noted that domain name registration (for a website) is not trademark registration. It does not grant absolute protection of the name used. Registration of a domain name with the Internet Corporation for Assigned Names and Numbers (ICANN) should prevent anyone from starting a website using the identical name, and is evidence of prior use of the name, but companies, including condominiums, wanting to protect their domain names generally will also register them separately as trademarks. CONCLUDING COMMENT If, as we suggested at the outset, the condominium name, through a proper branding exercise, can come to represent everything to do with the whole reputation and public image of the property, then it should be worth protecting to the extent possible and reasonable. However, as we’ve also suggested, for the effective and meaningful branding of the condominium, even more important than the name that is registered (or not) and the information packages (and other materials and information) that are sent out, it is the more concrete and fundamental aspects of the branding that really matter: In particular, determining a vision for the community, and then following this up with the unified effort of the board of directors, unit owners and residents, to conduct and manage the affairs of the corporation in a manner that is consistent with that vision. In this way, the condominium might truly acquire positive brand equity to help ensure it remains a viable and enjoyable community into the foreseeable future. Michael H. Clifton and Karyn Sales
(February, 2011) About Condo memoranda are provided for general information only relating to Ontario condominium law. They are not intended as legal advice. Anyone wanting or requiring legal advice or assistance relating to any aspect of condominium law should contact competent and qualified legal counsel. © Clifton Kok LLP