Minister Orazietti Announces Increased Protections for Condo Owners

Ontario Increasing Protections for Condo Owners

Province ProposingChanges to Support Stronger Condo Communities
Ontario is introducing newlegislation toincrease protections forcondominium owners, improve how condo corporations are run, and ensure that condo boards are governed professionally.

The proposed Protecting Condominium OwnersActmarks the first major overhaul of the province’s condominium laws in more than 16 years. It is based on more than2,200 consultation submissions from condo owners, developers, managers and industry experts during a public review of the Condominium Act.

If passed, the proposed legislation would establish:

• Clearer, more comprehensive rules to prevent owners from being surprised by unexpected costs after buying a newly-built condo
• A new Condominium Authority to provide quicker, lower-cost dispute resolution and help prevent common disputes
• Strong financial management rules for condo corporations to help preventfinancialand organizationalmismanagement
• Better governance requirements for condo boards, including training for condo directors
• Mandatory licensing and education requirements for condominium managers.

Improving consumer protections in the province’s growing condo sector ispart of the government’s plan to build Ontario up. The four-part plan includes investing in people’s talents and skills, making the largest investment in public infrastructure in Ontario’s history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.

May 27, 2015

“The reforms the government will introduce today include a quick, low-cost dispute resolution system, a plan for licensing and training managers enhanced consumer protection, and a mandate for better and clearer information for buyers, condominium owners, residents and directors. Through these and many other improvements, Ontario’s condominium community can look forward to a bright future.”
— Armand Conant, Condominium Law Expert and Partner, ShibleyRighton, LLP; a Past-President, Canada Condominium Institute (Toronto Chapter)

“The Association of Condominium Managers of Ontario is thrilled that the government has moved quickly to introduce legislation to modernize the Condominium Act and create stronger protections for Ontario’s condo owners. For the past 38 years, ACMO has worked to educate condo managers and provide qualified professionals to serve condo owners and residents. Ontario needs condo managers who are qualified and well-trained, and we look forward to supporting the government as it puts this proposed new licensing body in place.”
— Dean McCabe, Board of Directors and Former President, Association of Condominium Managers of Ontario

“I applaud the government for taking this important step to enable professional licensing and oversight of condominium managers in Ontario. This Bill goes a long way towards strengthening protections for condo residents across the province by ensuring condos are managed only by qualified and professional condominium managers.”
—John Oakes, Chief Executive Officer, Brookfield Condominium Services Ltd.

“In late 2009, my small 15-unit condo building had $250K fraudulently stolen by the property manager. The proposed condo legislation will create strong financial management rules for condos and license the province’s 2,500 condo managers. These changes will help disable rogue property managers, prevent fraud and mismanagement, and protect condo owners from issues similar to the ones my condo building faced.”
—Sandy Steffen, OwnerAdvocate

“As the voice of the residential building industry in Ontario, we believe the proposed condo legislation will help build better communities across this province. With condos making up over half of the new homes being built in Ontario, it’s important to ensure the province’s condo industry continues to thrive by modernizing the Condominium Act. We look forward to having an opportunity to provide input and feedback as it moves through the committee process.”
— Joe Vaccaro, Chief Executive Officer, Ontario Home Builders Association

QUOTES

“In recent years, Ontario has seen huge growth in condo development, and it has become increasingly obvious that our current Condominium Act is not providing enough protection to those living in condos. Thousands of condoowners, developers, managers and experts volunteered their time and experience to debate and develop recommendations to reform our condominium legislation. Thanks to the dedicated efforts of those who participated, we will introduce legislation that, if passed, will significantly increase protections for Ontario’s condo owners and set a solid foundation for stronger and healthier condo communities across the province.”

—David Orazietti, Minister of Government and Consumer Services

“This new legislation is a tremendous step towards protecting and overseeing the rights of condo owners in Ontario. It would be a great source of security to owners, would give them a place to turn to when their rights are violated, and it would also provide them with easier access to information. By mandating licensing and training for condo managers, the government is putting the emphasis on protecting owners. We have to applaud these proposed reforms to the laws governing Ontario’s condominium communities—it is a ‘great insurance policy’ for all owners, now and in the future.”

– Anne-Marie Ambert, Ph.D.,Founder, Condo Information Centre

QUICK FACTS

• 3 millionOntarians live in condos – a number greater than the populations of Saskatchewan or Manitoba.
• More than 50 per cent of new homes being built in Ontario are condos.
• There are currently 700,000 condo units in Ontario, up from 270,000 units in 2001.51,000 units are currently under construction.
• The government received about 200 recommendations for updating the Condominium Act through its public consultation process.

BACKGROUND INFORMATION

• About the Protecting CondominiumOwnersAct
• Proposed condo reform in Ontario: A policy outline
• About Ontario’s review of the Condominium Act
• Ontario’s commitment to better protect consumers and condo residents

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. About1.3 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 reviewclearly 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. 

Proposed changes 

To improve consumer protection in the condo sector, Ontario is introducing theProtecting Condominium Owners Act.

If passed, this act would amend the Condominium Act and the Ontario New Home Warranties Plan Actand enact the Condominium Management Services Act to address five key areas of reform:

1. Dispute resolution

The proposedactwould enable the establishment ofa 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 discloseinformation
• 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 forall condo corporations — about $1 per unit a month, which would be collected from unit owners as a monthly common expense.Fees would start to be collected once the Authority’s dispute resolution services are in place.

2. 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.

3. 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.

4. How condos are run

The proposed act would make it easier for condo owners and boards to participateand vote at meetings. For example, condo boards would no longer have to pass a by-law in order to holda meeting through conference calls orusing similar off-site meeting technologies.

The act would also require condo boards to issue information to owners on a regular basis on topics such asthe corporation’s insurance or any legal proceedings. It would also requirecondo directors tocomplete training requirements.

5. Condo manager licensing   

The proposed act would establisha 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 establishinga compulsory licensing system. Regulations under the act would set training and education requirements for condo managers and a code of ethics.

Support for Reforming Ontario’s Condominium Laws

May 27, 2015

 “The reforms the government will introduce today include a quick, low-cost dispute resolution system, a plan for licensing and training managers enhanced consumer protection, and a mandate for better and clearer information for buyers, condominium owners, residents and directors. Through these and many other improvements, Ontario’s condominium community can look forward to a bright future.”

— Armand Conant, Condominium Law Expert and Partner, ShibleyRighton, LLP; a Past-President, Canada Condominium Institute (Toronto Chapter)

“The Association of Condominium Managers of Ontario is thrilled that the government has moved quickly to introduce legislation to modernize the Condominium Act and create stronger protections for Ontario’s condo owners. For the past 38 years, ACMO has worked to educate condo managers and provide qualified professionals to serve condo owners and residents. Ontario needs condo managers who are qualified and well-trained, and we look forward to supporting the government as it puts this proposed new licensing body in place.”

— Dean McCabe, Board of Directors and Former President, Association of Condominium Managers of Ontario

“I applaud the government for taking this important step to enable professional licensing and oversight of condominium managers in Ontario. This Bill goes a long way towards strengthening protections for condo residents across the province by ensuring condos are managed only by qualified and professional condominium managers.”

—John Oakes, Chief Executive Officer, Brookfield Condominium Services Ltd.

“In late 2009, my small 15-unit condo building had $250K fraudulently stolen by the property manager. The proposed condo legislation will create strong financial management rules for condos and license the province’s 2,500 condo managers. These changes will help disable rogue property managers, prevent fraud and mismanagement, and protect condo owners from issues similar to the ones my condo building faced.”

—Sandy Steffen, OwnerAdvocate

“As the voice of the residential building industry in Ontario, we believe the proposed condo legislation will help build better communities across this province. With condos making up over half of the new homes being built in Ontario, it’s important to ensure the province’s condo industry continues to thrive by modernizing the Condominium Act. We look forward to having an opportunity to provide input and feedback as it moves through the committee process.”

— Joe Vaccaro, Chief Executive Officer, Ontario Home Builders Association