If you’re involved in the Ontario condominium industry or even passively follow news with regards to it, chances are that you’re aware there will be a significant reform of the Condominium Act, 1998 (the “Act”), which essentially governs condo communities across the province. A refresh of the Act has been long overdue as there is a dire need for it to reflect today’s realities.
A Whole New World
Before addressing the major changes coming to the Act, context is required. The Act came into force in 2001, where the condo landscape was merely at the tip of what it is today. While the intense growth of the condo market is shared across the board in many North American cities, no other city has rivaled the explosive growth of Toronto’s landscape during the same period.
The GTA now has almost 10,000 condo corporations, which translates to 600k residential condo units and it doesn’t stop there. Industry experts expect the numbers to continue to grow sharply in the next years. The need to modernize the Act is rooted in this mammoth growth of condos.
So What Will Change?
The Government, along with the help of the Canadian Condominium Institute of Toronto (CCI) and the Association of Condominium Managers of Ontario (ACMO), began a review of the Act in 2012 that consisted of five key aspects: consumer protection, dispute resolution, financial management, governance, and the licensing of property managers.
The overarching theme across the above five verticals, given the increasing complexity of condo communities is of a) education; and b) communication between the stakeholders of condos. According to notable GTA condominium lawyer, Armand Conant from Shibley Righton LLP, “the biggest source of problems in condominium communities stems from a lack of knowledge of owners, residents, and directors about condos and what it means to live in one. This has led to an erosion of trust between owners and Boards.”
To satisfy the needs identified above, some of the more potentially controversial considerations during the reform process included the following:
a) establishment of a new administrative authority, Condo Office, to deal specifically with better educating residents (owners and tenants), a centralized mechanism for dispute resolution, and maintaining records on condo corporations;
b) increased use of electronic platforms in condo administration, such as use of electronic proxies and electronic notices;
c) a requirement and procedure for condo property managers to be licensed; and
d) the possibility of banning smoking inside of condo units.
Each of the above will be explored in greater depth in further posts as we continue to dissect the impending Act in a series regarding the reform.
So When Will the New Act Come Into Force?
The Government had initially planned to unveil the legislation in the spring of 2014. However, the introduction of the Act has been delayed due to the provincial election. In the recently released 2015 Provincial Budget by Finance Minister Charles Sousa, it was announced that it would move forward with the reforms in the “very near future.” Not much was revealed in the Budget announcement except for the following:
“Building on the announcement in the 2014 Budget, the province is moving forward with reforms to the Condominium Act, 1998, including the establishment of mandatory qualification for Condominium Managers. The Province will also be creating two administrative authorities to license condominium managers and improve education and dispute resolution for condominium corporation boards and owners.”
While the question of when exactly the Act will finally be introduced, remains anyone’s guess, it looks to be a major overhaul of the condo industry.