Protecting Condominium Owners Act - An outline of the changes to Ontario’s condo laws

Protecting Condominium Owners Act - An outline of the changes to Ontario’s condo laws

As the industry embarks on an exciting new journey with the introduction of Bill 106, Central Erin Property Management is pleased to be part of this of this process, which includes education. We will be sharing excerpts from the Ontario Governments web-site publications in the next series of blog articles, on this new act and what it means. To read the entire article, please click on the link at the bottom of this article.

The Protecting Condominium Owners Act is the product of the government’s comprehensive review of the existing Condominium Act.

It marks the first overhaul of the province’s condo law in over 16 years. It:

·         amends the Condominium Act and the Ontario New Home Warranties Plan Act

·         enacts the Condominium Management Services Act

·         makes small consequential amendments to other relevant acts

Many important aspects of the reforms will be implemented through regulations and by the new administrative authorities to allow for flexibility in a rapidly changing market. Regulations will be prepared in consultation with the public, condo owners and the condo sector, including consultation through the regulatory registry.

The majority of the provisions of the act are not yet in force. Most provisions will come into force on a date (or dates) set by proclamation of the Lieutenant Governor.  Ontario plans to work quickly to develop regulations and implement the key commitments of this act.

Consultations

Due to the growth and change in Ontario’s condo sector over the past 16 years, Ontario announced a review of the Condominium Act in June 2012.

The Condominium Act Review was an 18-month collaborative public engagement process. It gave condo owners, developers, managers and other experts an opportunity to identify issues in condo communities and to work together to develop long-term solutions.

Overall, the Condominium Act review generated over 200 recommendations. This included significant reforms to strengthen consumer protection and support the needs of both current and future condo owners. Ontario’s new law includes a vast majority of recommendations received through this consultation process.

Learn more about the consultation process

Streamline dispute resolution

The review of the Condominium Act revealed a frequent power imbalance during disputes between condo boards and owners.

The basic tools for resolving disputes under the existing act are mandatory private mediation-arbitration and the courts. These processes can be time-consuming and legal costs can be expensive.

The goal of the legislation is to correct this imbalance by providing a faster, more effective, less expensive and fairer dispute resolution process.

To do this, the Condominium Act Review Stage 2 Solutions Report recommended setting up a single “condo office” to oversee education, dispute resolution, condo manager licensing and to maintain a registry of all condos in the province.

The act, when in force, will split the functions between two new administrative authorities, delegating these functions to two independent, self-funded bodies:

·         a Condo Authority that would be responsible for administering condo owner education, dispute resolution and a condo corporation registry

·         a separate Administrative Authority to administer licensing of condo managers and condo management providers

Some stakeholders have pointed to the need for two separate bodies to avoid actual or perceived conflicts of interest.

While the two bodies would operate separately, they may share premises and various services in order to contain costs.

Condo Authority functions

The Condo Authority will provide:

·         affordable access to quicker, accessible and lower cost resolution of disputes primarily between corporations and owners

·         self-help tools, case management and mediation to prevent easy-to-resolve disputes from being tied up in costly and time-consuming legal proceedings

·         education and awareness for condo owners about their rights and responsibilities, and the basics of condo living and how it differs from other freehold ownership

·         education for condo directors

·         a registry of all condo corporations in Ontario, including their boards of directors and contact information

·         a guide for condo buyers, setting out unit owners’ roles and responsibilities

Condo Authority structure

The Condo Authority will operate as an administrative authority. It would be an independent, self-funded, not-for-profit corporation. Its employees would not be members of the Ontario Public Service.

To ensure accountability and transparency, the Condo Authority would:

·         have an administrative agreement with the Minister of Government and Consumer Services

·         be required to publicly disclose certain information, and

·         be subject to oversight by the Auditor General

Condo Authority funding

The province would provide start-up funding for the Condo Authority.

After the initial start-up, the authority would set its own fees. It would charge:

·         fees to users of its services

·         a small fee levied on condo corporations across the province

The fee to all condo corporations is intended to help keep dispute resolution costs lower, and would cover the cost of the Condo Authority’s dispute prevention services (e.g.,condo buyer’s guide, online self-help tools).

The Condo Authority would determine and set this fee, in accordance with processes and criteria approved by the Minister of Government and Consumer Services. In line with the Stage 2 report, it is estimated that the fee will be approximately $1 per unit a month.

For example, the authority would charge a condo corporation with 100 units about $100/month.

This fee structure reflects the fact that all condo owners would have equal access to dispute resolution from the Condo Authority.

Condo corporations would collect the fee from unit owners as part of monthly common expenses. As with all monthly common expense fees, each unit’s contribution would be calculated using the proportions set out in the condo declaration.

Fees will not be collected until the Authority is in place in 2017.

The Condo Authority Tribunal

The amendments to the Condominium Act delegate to the Condo Authority the responsibility to administer the Condominium Authority Tribunal, which will resolve disputes through case management, mediation and adjudication.

Key features:

·         the tribunal’s services would include online resources and self-help tools

·         the tribunal would make binding decisions that would be enforceable as if they were a court order

·         existing dispute resolution mechanisms would still apply to disputes outside the tribunal’s jurisdiction

·         the divisional court would hear appeals from tribunal findings on questions of law

Tribunal disputes

Regulations will set out which disputes (primarily between owners and corporations) would have to be heard by the tribunal. They may include:

·         enforcement of declarations, by-laws and condo rules

·         procurement processes

·         access to records

·         procedures for requisitioning a meeting of owners

Certain disputes would be excluded, and would need to go through mediation and arbitration or court, such as disputes relating to:

·         liens

·         amalgamation and termination of condo properties

·         determination of title to real property

Tribunal dispute resolution fees

The Condo Authority will set its own budget and fees in accordance with the processes and criteria approved by the Minister of Government and Consumer Services.

It is anticipated that the cost of resolving a dispute through the tribunal would be substantially lower for owners and boards than the legal fees and other costs that are paid today. It is also expected that the tribunal would resolve disputes more quickly.

Enhance consumer protection

As recommended in the Condominium Act Review Stage 2 Solutions Report, extra safeguards to protect condo buyers and help them make more informed decisions are a key part of the act and related regulations.

Updated: April 22, 2016 - Published: May 27, 2015

For the full article as published by the Ontario Government, please click on the link below

https://www.ontario.ca/page/condominium-law-changes