Reforming Ontario's Condominium Laws
The need for reform
The size and complexity of Ontario's condo market has changed dramatically since the Condominium Act was passed in 1998.
Today, Ontario has about 700,000 condo units and 10,000 condo corporations. About 1.3 million Ontarians live in a condo and more than half of new homes under construction in the province are condos.
Due to the vast growth and change in the condo sector, the Ministry of Government and Consumer Services reviewed the current Condominium Act using an innovative and collaborative public engagement process, receiving over 2,200 submissions from condo owners, developers, managers and industry experts.
The review clearly revealed that Ontario requires:
- New laws and tools to increase consumer protection for condo owners and buyers
- Improvements to how condominiums are run and managed
- Means to strengthen the financial sustainability of condominium buildings.
To improve consumer protection in the condo sector, Ontario is introducing the Protecting Condominium Owners Act.
If passed, this act would amend the Condominium Act and the Ontario New Home Warranties Plan Act and enact the Condominium Management Services Act to address five key areas of reform:
- Dispute resolution
The proposed act would enable the establishment of a Condominium Authority that would provide quicker, lower-cost dispute resolution than what is available today. It would also help prevent disputes between condo owners and boards by offering clearer information on condo owners' rights and responsibilities.
The Condo Authority would be established as a delegated administrative authority, an independent, self-funded, not-for-profit corporation.
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 information
- Be subject to oversight by the Auditor General.
To fund its services, the Condo Authority would have the power to set its own fees, including a small fee for all condo corporations -- about $1 per unit a month, which would be collected from unit owners as a monthly common expense. Setting up a dispute resolution service partly funded through a small fee was one of the top recommendations made by condo owners, residents, developers and other experts during the consultations and review of the Condominium Act.
- Consumer protection for owners and buyers
The proposed act would set extra safeguards to protect condo owners and buyers and help them make informed decisions. It would:
- Require developers to give condo buyers a copy of an easy-to-read guide to condominium living at the time of sale
- Provide clearer, more comprehensive rules to prevent buyers from being surprised by unexpected costs after purchasing a newly-built condo
- Enable the government to create regulations for standard condominium disclosure statements and other documents, such as declarations
- Amend the Ontario New Home Warranties Plan Act so that most of the warranty protections available to buyers of new condos would also apply to certain condo conversion projects.
- Financial management
The proposed act would strengthen financial management rules for condo corporations to help prevent fraud and mismanagement. For example, it would forbid condo corporations from finalizing some contracts unless they have fulfilled certain procurement process requirements.
It would also give owners more information about their condo corporations' financial matters and more control over important changes.
Regulations under the act would also clarify rules related to reserve funds by defining what adequate reserve funds are and how condo corporations can determine if their reserve funds are sufficient.
- How condos are run
The proposed act would make it easier for condo owners and boards to participate and vote at meetings. For example, condo boards would no longer have to pass a by-law in order to hold a meeting through conference calls or using similar off-site meeting technologies.
The act would also require condo boards to issue information to owners on a regular basis on topics such as the corporation's insurance or any legal proceedings. It would also require condo directors to complete training requirements.
- Condo manager licensing
The proposed act would establish a separate piece of legislation - the Condominium Management Services Act. Under this act, a new delegated administrative authority would regulate condo managers and management firms by establishing a compulsory licensing system. Regulations under the act would set training and education requirements for condo managers and a code of ethics.