At this point in the year, it’s likely that you’ve prepared your property or even multiple properties for the winter. As seasoned property managers know, taking preventative measures doesn’t stop when the first snow hits. Regardless of how much time and effort you put into keeping your property in good condition throughout the milder season, there’s always more to do to protect it in the cold months.
At this point in the year, it’s likely that you’ve prepared your property or even multiple properties for the winter. As seasoned property managers know, taking preventative measures doesn’t stop when the first snow hits. Regardless of how much time and effort you put into keeping your property in good condition throughout the milder season, there’s always more to do to protect it in the cold months.
In some ways, a condo development is like a small municipality. The owners of each unit are members of the condo corporation and have the right to vote at meetings (1 vote per unit).
An elected board of directors, like a town council, makes decisions on behalf of the owners, and often hires staff to carry out the work. Just as towns have a town manager, condominiums often have a condominium manager.
From time to time, sharing common elements and following community rules can lead to disagreements. However, there are ways to resolve disputes.
If you disagree with a policy taken by your condominium board, or feel the condo corporation is not being properly managed in some way, you have a number of options.
What legislation and regulations govern condominiums in Ontario?
Do provincial legislation and/or regulations require that developers of new condominiums provide a new home warranty to buyers?
Yes. The Ontario New Home Warranties Plan Act requires that developers of new residential condominiums provide a home warranty to buyers. These developers must be registered with Tarion Warranty Corporation, a private corporation that administers the Act.
What provincial and federal taxes do condominium buyers pay on their units?
The Harmonized Sales Tax (HST) was introduced in Ontario on July 1, 2010, combining the federal Goods and Services Tax (GST) with provincial sales tax into a single tax. Buyers pay HST on new units but not on previously owned units. There is no HST on condominium fees.
Buyer Beware:
If you are purchasing a re-sale condo, the federal portion of the HST will apply to your purchase if:
Be sure to enquire about the above before putting an offer on a re-sale condominium.
Are there any GST/HST rebate programs for condominium buyers?
Yes. Buyers may be eligible to receive an Ontario new housing rebate that reduces the provincial part of the HST, regardless of the price of their new home. The maximum rebate is $24,000. With the rebate, purchasers of new homes priced up to $400,000 pay no more (and possibly less) tax than they would have before the HST was introduced.
Like other homebuyers, purchasers of condominiums can also apply for a GST/HST New Housing Rebate. This rebate reduces the GST and the federal part of the HST on a declining scale, depending on the purchase price of the new home. For eligibility information, see GST/HST New Housing Rebate, Canada Revenue Agency.
Are buyers of new and re-sale condominiums responsible for any other charges levied by the Province?
Yes, a land transfer tax, which is calculated as a percentage of the sale price or the value of consideration*, whichever is higher.
| Sale Price or Assessed Value of Consideration | Land Transfer Tax Rate |
|---|---|
| Up to and including $55,000 | 0.5 percent |
| More than $55,000 and up to and including $250,000 | 1 percent |
| More than $250,000 | 1.5 percent |
| More than $400,000 for land that contains at least one and not more than two single family residences | 2 percent |
* In most instances, land transfer tax is calculated based on the sale price. Where the vendor and purchaser are unrelated, this price is typically indicative of the fair market value. “Value of consideration” ensures that tax will also be paid in situations where the payment of the purchase price is to be made, in full or in part, through the assumption of other liabilities or obligations that may not be included in the stated purchase price but are to be undertaken or assumed by the purchaser.
First-time homebuyers may qualify for a refund of all or part of the tax. See Land Transfer Tax Refund for First-time Homebuyers to find out if you qualify for this refund.
Do provincial legislation/regulations require that all condominiums in Ontario have a reserve fund?
Yes. Its amount is determined by a reserve fund study that projects how much is required by the fund for the next 30 years. This study must be done within one year of the condominium’s registration date by a qualified individual, such as an engineer, architect, architectural technologist or certified reserve planner. The fund must be fully funded within prescribed time periods.
After the initial study, a new reserve fund study must be completed within three years. After that, an updated reserve fund study must be completed within every three years of the last reserve fund study. In general, every other study must include a site inspection.
A developer’s initial budget must include an annual contribution to the reserve fund that is based upon calculations of the estimated long-term repair and replacement costs and life expectancies of the common elements and assets of the corporation. The contribution must be the greater of the calculated amount or 10 percent of the other common expenses (i.e., other than contributions to the reserve fund) until such time as a reserve fund study has been carried out.
How is a new condominium corporation registered?
In order to register a new condominium, the developer submits a declaration and description of the property to a Land Registry Office. The declaration describes how the condominium is organized and operated, such as the proportion in which owners are to contribute to the common expenses. The description includes information such as a survey plan of the boundaries of each unit and the common elements.
Once the declaration and description are registered, individual unit titles are created for each unit and its corresponding interest in the common property. The condominium corporation is formed, which is a legal entity that controls and manages the common elements on behalf of the owners.
What rules does the developer have to follow when selling units?
Under the Condominium Act, developers must (among other things):
What documents is the developer obliged to provide to the buyer?
The developer must provide the purchaser with a disclosure statement, which must have a table of contents and contain specific information about the unit and project including:
To provide an opportunity for the buyer to cancel the contract (and receive a refund of his or her deposit — with interest), the legislation gives a buyer a 10-day “cooling-off” period from the time he or she receives a copy of the signed purchase and sale agreement or the disclosure statement (whichever comes later). A buyer may have additional time to cancel the contract if there has been a material change as defined in the Condominium Act. The 10-day cooling-off period pertains only to the sale of new condos, not re-sales.
What documents must a condominium corporation provide a purchaser of a re-sale condominium?
If requested, the condominium corporation must provide a status certificate for the unit which includes key information such as:
Are there legislation/regulations that stipulate(s) what happens if a developer inaccurately estimates the operational costs of a condominium?
Yes. A developer of a new condominium is accountable for any shortfall in the budget statement in the one-year period following registration and must pay the corporation the difference.
Because a condominium’s first reserve fund study may not be completed until towards the end of the condominium’s first year, a deficit (relating to the required reserve fund contributions) may not occur until the second year. Consequently, the builder won’t necessarily be held accountable for any inaccuracies in predicted contributions to the reserve fund (after the corporation’s first year).
However, there is a section in the Condominium Act that stipulates that developers must not make statements or provide material information that is false, deceptive or misleading or omit information they are required to provide.
Is the developer of a new condominium obligated to put aside reserves as soon as the condominium is registered?
Yes.
Does the Province require a condominium to impose any bylaws and rules?
No, the legislation doesn’t require this but a condominium corporation may make its own bylaws and rules.
Does condominium legislation authorize the condominium corporation to borrow money?
Yes, a condominium corporation may borrow to carry out its duties and objectives provided it passes a bylaw that permits this.
Can a condominium corporation place a lien on an individual unit?
Yes, if an owner has not paid the common expense fees, the corporation will automatically have a lien against the unit. The corporation must give the owner 10 days’ notice before registering the certificate of lien on the unit. A notice of lien must be registered within three months of the default, otherwise the lien expires.
The lien may be enforced in the same manner as a mortgage. In other words, the condominium corporation has all of the usual remedies available to a mortgagee — including power of sale, foreclosure, possession and collection of rents.
If the unit owner has a mortgage, the mortgagee (such as a bank) can pay what’s owing under the lien and add the amount to the mortgage.
The lien also allows the corporation to collect any interest and reasonable legal costs and expenses incurred by the corporation in collecting the debt.
What are the requirements for electing the board of directors and for its meetings?
Each board of directors must have at least three directors. Directors must be at least 18 years old, be mentally competent and not be an undischarged bankrupt or have an undischarged lien against their unit for 90 days. Other directors’ qualifications can be specified in the bylaws. Directors serve for terms of three years or less.
Annual general meetings must take place within six months of the end of the condominium corporation’s fiscal year. This ensures that unit owners can review the financial statements in a timely fashion.
If 15 percent of the owners make a written request for a special meeting, the board must call it within 35 days of receiving the request. The request must include what business will be discussed. If it includes removing a director, the director’s name and reason for removal must be specified.
If the board fails to call the special meeting, the person(s) requesting the meeting may call and hold the meeting within 45 days of calling the meeting.
How does a condominium corporation change its governing documents?
To change the declaration, approval of either 80 percent or 90 percent of owners is required, depending on the subject matter. For example, changes to certain ownership interests and financial liabilities require 90 per-cent approval, while matters such as pet restrictions require only 80 per cent. For more information on amending the declaration, see Section 107(2) of the Condominium Act.
By-laws may be changed by the board of directors with confirmation by the owners of a majority of the units in the corporation.
Can an owner stop paying condominium fees if he/she is unhappy with the condominium’s board of directors and/or property management?
No.
Do provincial legislation/regulations have rules regarding special assessments? If so, what are they?
No. These are typically governed by bylaws.
What about additional recreational facilities/services? Could a condominium corporation buy a golf course, for example? Could it change the services an owner expects to receive?
Yes. If the board wishes to change (as opposed to repair or maintain) the common elements, assets or services, this may require the involvement of the owners in the decision. The need to involve owners will depend on the nature of the proposed change and the cost to carry out the change. All changes must be in keeping with the objectives of the corporation. See sections 97 and 98 of the Condominium Act, Province of Ontario, for more information.
Do provincial legislation/regulations govern renting or leasing a condo unit?
Yes. Within 30 days of entering into or renewing a lease, an owner must:
The owner must also notify the corporation in writing when the unit is no longer leased.
For more information on landlords’ and tenants’ rights and responsibilities in Ontario, see Your Guide to Renting a Home, Provincial Fact Sheet – Ontario.
What other constraints do provincial legislation/regulations put on condo corporations, their boards of directors, bylaws and management?
Is there a process for handling disputes or complaints?
The Human Rights Tribunal recently released an interesting decision on the duty to accommodate an owner with a disability. In Taite v. Carleton Condominium Corporation No. 91 [2014] O.H.R.T.D. No. 166 the owner claimed the condominium had a duty to accommodate his disability by allowing him to park his truck outside near the front entrance and not underground in the parking garage as offered by the condominium (note: the truck did not fit in the underground). The tribunal disagreed.
The Court of Appeal released another condominium case this month: Toronto Standard Condominium Corporation No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc. As a refresher, this is the case where the declarant refused to release control of the condominium to the owners. The owners called the turn-over meeting and elected a new board. The declarant refused to acknowledge them. An application was brought to validate the meeting; the owners were successful.
