Monday, December 19, 2011

Updates to the Condominium Act

Changes have been proposed to the Ontario Condominium Act.  After being enacted in 2001, the legislation is ten years old, like anything ten years old, it should be evaluated and updates discussed.


To be a director of a condominium board in Ontario, you have to be 18-years of age, mentally competent and not be an undischarged bankrupt.


But as condominiums become an increasingly important lifestyle choice in the province, two of the largest condominium associations want to raise the bar on the quality of directors by making sure that education becomes a requirement under the now decade old Ontario Condominium Act.

“Given the large responsibility borne by directors often dealing with assets worth many millions of dollars, and that most often they are volunteers without a specific skill set for governance of a condominium corporation…all new directors regardless of their educational and professional background attend an introductory directors’ condominium course to ensure basic knowledge,” says a proposal to be released on June 1 and obtained by The Star.

The educational bylaw requirement is just one of many long-awaited recommendations in a 102-page report by the joint committee of the Canadian Condominium Institute and the Association of Condominium Managers of Ontario.

“There are a lot more people living in condos today than when the act was implemented, and we’ve seen where things could certainly be improved,” said Armand Conant, a lawyer and past president of the Canadian Condominium Institute.


Other changes the groups want include:
• Reserve fund requirements in condos to be increased so that buildings don’t fall into disrepair. Currently the minimum contribution in the first year budget is 10 per cent. The group recommends 20 per cent.
• New property tax classifications for condominiums. The government assess units for taxes as if they were receiving individual services which is “not fair or equitable” says the group. “For example there would be only one garbage pick up for a condo of 200 homes, yet if these 200 homes were houses on a street they would have to make 200 stops.”
• The Ontario New Home Warranty Plan should apply to condominium conversions so the new owners will have protection.
• More disclosure by developers on key financial matters. Some developers may mislead consumers by artificially depressing first year expenses which results in large increases in common expenses in the second year.

Conant says his group has met with as many stakeholders as possible, from owners, to developers and trades people to draft the recommendations.

“We started with the basis that this is essentially a consumer protection act, and we wanted to have as wide an input as possible,” said Conant.

With an election coming up in October, the groups hopes this will raise the profile of condominium ownership with politicians and that the provincial government will eventually move to re-open the Act. Copies will be delivered to Minister of Consumer Services John Gerretsen’s office, as well as all the opposition parties.

The Act received Royal Assent in 1998, but didn’t come into force until May 5, 2001, or ten years ago.

There are now 9,000 condominium corporations in the province, and record breaking sales of condos in cities such as Toronto as condominiums are outselling single detached homes.

“The current Act is a huge improvement over the old one, but since then times have certainly changed,” said Conant.

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