CCI Grand River Chapter’s First Virtual Conference is Coming Up!

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On November 20 and 21, 2020, the Grand River Chapter of CCI is hosting its first Virtual Condo Conference and Tradeshow. The two day event is packed with educational sessions and opportunities to chat with exhibitors and sponsors. I might be biased because I am one of the co-chairs of the conference committee, but this event is one you don’t want to miss! Sponsorships almost sold out in the first week they were available and we’ve had several requests to add more. I won’t describe all the events and activities planned (you need to attend to see for yourself!), but below are some of the highlights.

Friday is only for condo managers. It will include a secret session to start off the day with some education and entertainment. It will be followed by a brief break before we get into an exhibitor roundtable session where attendees will engage in discussions with five exhibitors. There will be another brief break and the day will end with the ever-popular legal panel where three lawyers will discuss (and debate) recent cases and legislative changes! Not a condo manager? Don’t fret! The legal panel will be recorded and available for viewing later by the other attendees.

Saturday is open to all attendees. It includes two traditional panel sessions, each with three topics to choose from. Having trouble choosing which session to attend? Not a problem with a virtual conference as you can always watch the other sessions later since they are all recorded. Talk about extra value with your ticket! There is some time for chatting with exhibitors and sponsors again around lunch and the day will end with an “Ask the Experts” session where the panel (which includes a manager, auditor, engineer, and lawyer) will answer questions posed by the attendees throughout the day!

There will be prizes for those who attend live (as opposed to watching the videos later) so be sure to set aside part of your day on November 20 and 21, 2020 to join us! You can register on the Grand River Chapter’s website now: https://www.cci-grc.ca/events/2020/11/20/2020-grand-river-virtual-condo-conference. Once you register you will receive an email with a link and you will be able to access the conference website early to start chatting with sponsors, exhibitors, and speakers.

Check out this video teasing the virtual event: https://www.youtube.com/watch?v=ZleVV8VXEx4

With our firm’s Gold Sponsorship we received some complimentary passes to the event. Please email me if you are interested in attending the event for free. There are a limited number so it will be first come, first served.

Virtual or In-Person Meetings During a Pandemic: Which is Best?

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Unlike in past years where I would have attended several owners’ meetings in a week during the busier times of the year, this year I have only attended a handful of in-person owners’ meetings since March. Most clients initially deferred their AGMs in the Spring. Since the deadline for holding AGMs will not be extended by the Government of Ontario, most condominiums have decided to hold their AGMs using electronic means or by teleconference (“virtual meetings”).

While the Government of Ontario has indicated that it will not extend the time to hold AGMs, it has extended the temporary amendments that allow condominiums to hold their meetings using virtual means without passing a by-law. The deadline was initially November 21, 2020, but it has been extended to May 31, 2021. As such, all condominiums have the legal authority to hold their meetings using virtual means until at least May 31, 2021.

The question is: Will you hold your meeting in-person or move to a virtual meeting?

Virtual Meetings vs. In-Person Meetings

I have already posted about some of the advantages and disadvantages of virtual requisition meetings: https://ontcondolaw.com/2020/07/13/virtual-requisition-meetings/ Similarly, I did a blog post for CCI’s Grand River Chapter on virtual meetings and recommendations for effectively communicating with owners: https://www.cci-grc.ca/blogs/view/communicating-in-the-digital-age-condo-edition. In short, the pros and cons of virtual meetings tend to be:

ProsCons
Easier for chairperson to control the meeting.Technology can be challenging for some owners.
Less costly if paying professionals (i.e. lawyer, engineer, auditor) to travel to the meeting.Accessibility issues with some of the options.
More flexibility about the time of the meeting (i.e. hold over lunch break instead of in the evening).Costs of hosted virtual meeting can be prohibitive for some condominiums.
Common pros and cons of virtual condo meetings.

In addition to the above, virtual meetings also have the added benefit of minimizing exposure to COVID-19 and other infectious diseases. Even if you aren’t concerned about catching it yourself, you should be concerned about the potential liabilities of your condominium if you host a meeting in-person and someone falls ill because of it.

The most common concern with virtual meetings is a perception that the technology is too complex for some owners to use. Some have concerns about the accessibility features of the virtual meeting platforms. In my experience, in-person meetings tend to be less inclusive than virtual meetings right now. This may seem counter-intuitive, but hear me out. For one, some people cannot attend meetings in person because they are in a high-risk group and do not want to put themselves at risk. Others may have returned from a trip and need to quarantine. Other owners may have jobs that expose them to COVID and they do not want to infect their neighbours by attending the meeting. While the intention with in-person meetings is often to be more inclusive by avoiding the technology required for a virtual meeting, in-person meetings can actually be less inclusive for the reasons above.

There are a number of other considerations with in-person meetings that you should be aware of right now. You need to monitor the restrictions on gatherings to ensure your condominium is complying with any at the time of the meeting. These restrictions change frequently right now, so be prepared to check at least once a day. You will also need to find a large space that will permit everyone to be at least 2 metres apart. You might want to consider renting microphones for the meeting as the extra distance can make it difficult for people to hear each other, especially with masks on. You will also need to enforce distancing and mask compliance throughout the meeting. You should have a plan prepared in the event someone refuses to wear a mask or keep a safe distance. Who are you going to call? What are you going to do? Lastly, while you might have been able to get away with meetings held outdoors during the warmer month, this is not a viable option with winter quickly approaching. You cannot expect owners to sit outside for an hour or two when it is -10 degrees Celsius, raining or snowing, or dark.

In my opinion, the most inclusive type of meeting right now is a virtual meeting through a hosting system that allows owners to call into the meeting using an ordinary landline telephone. This option eliminates concerns about spreading COVID-19 while minimizing potential technology issues with owners who may not be familiar with virtual meetings. If they have called a 1-800 number they can manage to call in for the virtual meeting. Voting can be done using proxies (in paper or electronic format) to minimize technology issues with voting during the meeting, which can be more common if you hold the meeting without a virtual meeting host. Spend the time that you would spend searching for a venue and ensuring all necessary precautions are taken to prepare the owners for the meeting. Send the initial notices earlier than required so owners have an opportunity to download any programs that they may need, purchase a microphone or headset, and speak with their techy family member to get some pre-meeting training. Provide detailed instructions for logging into the meeting. Once the meeting starts, go over the unique features of the virtual meeting system, such as how to ask questions, how to vote, etc.

I appreciate that some of you prefer in-person meetings (I do too), but the best option right now is a virtual meeting. You can return to in-person meetings when it is safe for all of your owners to do so.

The Condo Authority Tribunal (CAT) Hears New Matters Starting TODAY!

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Starting on October 1, 2020, the Condominium Authority Tribunal (CAT) will begin to hear more than record request disputes. The CAT’s jurisdiction has been expanded to hear most of the common disputes in condominiums. Specifically, the CAT will hear disputes with respect to any of the following provisions of the declaration, by-laws or rules: pets and other animals; vehicles (the definition is very broad, including boats, aircraft, and vehicles powered by muscular power); and parking and storage.

The CAT will also have jurisdiction to hear disputes related to indemnification or compensation claims related to any of the disputes that it now has jurisdiction over. For example, if the condominium brings an application to the CAT because an owner is not complying with a provision in the declaration about pets it will also be able to ask the CAT for a ruling on its right to be indemnified by the owner according to its declaration.

Section 132 of the Condominium Act, 1998, will also be amended on October 1, 2020 to add the following:

Non-application

(4.1) Subsections (1) and (4) do not apply to any matter in dispute for which a person may apply for resolution under section 1.36 to the Condominium Authority Tribunal established under Part I.2 if the Tribunal has been established under that Part. 2020, c. 14, Sched. 1, s. 18 (1).

This means that mediation and arbitration are not prerequisites for an application to the CAT, which makes sense because the CAT has its own mediation process. It will be interesting to see how this change is interpreted. Do we think mediation and arbitration will continue to be used for these disputes despite the CAT’s jurisdiction being expanded to hear them?

While the expansion of the CAT’s jurisdiction is sure to result in the resolution of matters with less costs being expended than with court and arbitration, there is a significant gap in the CAT’s Rules right now. The CAT’s Rules currently indicate that the CAT will not order a party to pay legal fees “unless there are exceptional reasons to do so”. The CAT’s Rules were amended on September 21, 2020 (I assume to address the expansion), but this rule was not changed. The Rule made sense when it was only record request disputes and the CAT was deciding if the condominium had failed to produce a record when it was required to do so, but now that it is going to hear cases where owners (sometimes blatantly) disregard the declaration, by-laws, or rules, it seems grossly unfair to saddle the innocent owners with the costs of the condominium’s enforcement efforts. Will the expansion of the CAT’s jurisdiction actually result in fewer of these nuisance and enforcement issues being resolved because of the possible costs?

Stay tuned. Hopefully we see further changes to the Rules in the days to come to address this imbalance.

CONDO COVID Q & A

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We are still receiving dozens of questions about COVID each week, ranging from how to host meetings to how to reduce potential liabilities. It looks like COVID is here to stay for a while, so we thought that we would provide some answers to the most common questions from our condominium clients.

Mandatory Masks

Q: Are masks mandatory in condominiums?

A: Not in all parts of Ontario. Some municipalities have implemented mask by-laws that require masks in some parts of condominiums, most often the interior common areas like the elevators, hallways, and amenity areas. Some of the by-laws require condominiums to create policies regarding masks and post specific signage on the entrances. Masks are required (at least in part) in most jurisdictions in Ontario, including but not limited to: Toronto, Ottawa, Peel (Mississauga, Brampton, and Caledon), Hamilton, Waterloo Region, Halton Region (Burlington, Oakville, Milton, and Halton Hills), and Windsor. Condominiums can also create new rules or policies requiring masks even if the local municipality does not require it. A rule is generally seen as more enforceable, but a recent case suggests that the courts may enforce policies in light of the unique situation we find ourselves in.

Meetings & Gatherings

Q: Can / should we hold our meeting in person?

A: Likely not. The Ontario government has restricted gatherings to 10 people inside and 25 people outside. Most lawyers appear to be of the opinion that these restrictions apply to condominium meetings. Even if the condominium is small enough to comply with the guidelines, the potential risks of holding a meeting in person make virtual meetings preferable for the foreseeable future, especially in areas where the daily numbers of reported infections are on the rise, like Toronto, Peel and Ottawa.

Q: Can we hold our AGM virtually without a by-law?

A: The temporary amendments to the Act that were made this past summer permit condominiums to hold meetings using electronic or telephonic means even if a by-law has not been passed by the condominium. These amendments are currently set to expire November 21, 2020. There is some speculation that the period could be extended, but there are no guarantees that will happen. The best option is to hold a virtual meeting before November 21, 2020 to pass a by-law permitting the condominium to hold virtual meetings. This way the condominium will be able to hold virtual meetings virtually even if the temporary amendments are not extended. If this is not possible, it may still be better to hold virtual meetings without a by-law than hold meetings in person during the peak of the second wave. Condominiums should get legal advice about possible options for holding meetings during the pandemic, especially since most condominium meeting hosts are booked into 2021.

Q: Can we hold our board meetings via teleconference without a by-law?

A: Yes. The amendments to the Act in 2017 removed the by-law requirement. All condominiums can use teleconference for their board meetings without a by-law so long as the directors consent. (Note: the consent requirement was temporarily removed this past summer, but it is expected to revert back at the same time as the other temporary amendments).

Amenities

Q: Can / should we keep the amenities open? Can / should we keep the amenities closed?

A: This is a tougher one to answer. It depends so much on the amenity area, the residents, the options for limiting exposure, etc. At a minimum, condominiums will need to comply with any restrictions in place at the time, such as limits on gatherings and mask requirements. Condominiums should also consider the value of the amenity and potential risks. Some amenities provide residents an opportunity to exercise, which is good for overall health and wellness. Other amenities provide an opportunity to learn or relieve stress, like a library. While amenities pose additional risks, many risks can be reduced by limiting the number of users at a time and increasing sanitization. Is there anything wrong in keeping amenities closed during the pandemic? No. It really depends on the condominium.

In-Suite Renovations

Q: Can the condominium prohibit owners from completing work in their units?

A: Yes, condominiums can create policies or rules restricting renovation work in the units. There are now multiple cases confirming the right of the condominium to restrict work in the units right now. This doesn’t mean that all work should be prohibited, but it is reasonable for condominiums to have restrictions in place. For example, some condominiums have prohibited non-essential work, but will permit essential work like plumbing repairs. Other condominiums have guidelines for the contractors carrying out the work to minimize the risks to the other residents.

CCI Grand River Chapter’s Virtual Conference Registration is Now Open!

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The Grand River Chapter is hosting its first Virtual Condo Conference & Tradeshow on Friday, November 20th and Saturday, November 21st, 2020. The Friday event is open to property managers only and will include a special event to kick off the conference, time with a few of the exhibitors in a roundtable format, and ends with a legal debate (which I’m thrilled to be participating in). The Saturday is open to all and will include a number of sessions, ending with an Ask the Experts session featuring various professionals.

Registration for attendees, sponsors and exhibitors is now open. I hear sponsorships are going fast, so make sure you purchase your sponsorships early to avoid disappointment!

For more information, including the agenda, check out the Grand River Chapter’s page: https://www.cci-grc.ca/events/2020/11/20/2020-grand-river-virtual-condo-conference

Government Will NOT Provide Further Extension to Deadlines to Hold AGMs

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The Ontario Government recently confirmed that it will NOT make further amendments to the Condominium Act, 1998, to permit condominiums to defer their annual general meetings beyond the deferral period that was previously granted during the declared emergency period. In part, the release stated:

Annual meetings are an essential component of the democratic functions and self-governance of corporations. They also represent an important opportunity for owners, members or shareholders to raise issues and to monitor the fiscal health, performance and governance of their corporations. As such, there will be no further extensions of annual meeting timelines.

While deferring the AGM made sense for a period of time while we assessed the situation, AGMs should not be deferred for several more months or possibly years while we wait for the pandemic to end. We need to adapt to the new normal. As such, condominiums must hold their AGMs in the prescribed time (see our previous post for more information on the deadlines: https://ontcondolaw.com/2020/07/30/end-of-the-declared-emergency-your-most-common-condo-agm-questions-answered/).

The Government did hint that they are considering extending the temporary amendments to permit virtual meetings and electronic voting to continue longer than the current period without a by-law. The release stated:

In order to ensure that corporations continue to be able to conduct meetings while protecting the health of Ontarians, the ministry is exploring changes that would extend the in-effect period of the temporary amendments related to virtual meetings and will communicate further updates as appropriate.

We understand that most of the virtual meeting providers are booked solid until 2021 now with all of the condominiums in Ontario moving to a virtual meeting for their AGMs and other meetings. Given the limited availability of the virtual meeting providers, hopefully the Government will consider some other potential solutions, such as formally recognizing “proxy only” meetings as appropriate for less controversial business.

For condominiums with deadlines approaching and no virtual meeting providers available to host the meeting, you can consider hosting the meeting on your own (or with the assistance of your lawyer or manager) or finding a venue to host the meeting in person with physical distancing requirements maintained. For larger condominiums, neither of these solutions is ideal, but both can work with a little extra effort.

Stay tuned!

Upcoming Events!

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Every few months I like to post about some upcoming events that may be of interest to condominium owners, directors, managers, and others. Today, I’ll briefly describe a few of the upcoming events in Ontario.

CCI GRC Level 100: Introduction to Condos (September 12, 2020 9 am)

The Grand River Chapter of CCI is holding its Level 100 course on September 12, 2020. This course is designed to provide an introduction to condominiums for owners and new directors. Register now:

https://www.cci-grc.ca/events/2020/09/12/level-100-introduction-to-condos

CCI GHC Enhanced Virtual Director’s Course (Various dates starting September 14 at 7 pm)

The Golden Horseshoe Chapter of CCI is holding its first ever virtual directors course over 8 nights in September and October. I will be kicking it off on night one with a discussion of the governing documents, the role of directors, records, and privacy issues. For more information, or to register, click here:

https://cci-ghc.ca/events/2020/09/14/enhanced-directors-virtual-course-series-part-1-of-8

CCI GHC CondoTalk (September 15 at 12 noon)

The Golden Horseshoe Chapter of CCI is hosting a virtual webinar over lunch to discuss the authority of the board of directors and dealing with difficult owners. Register now:

https://cci-ghc.ca/events/2020/09/15/condotalk-that-owner-did-what

CAI’s First Virtual Condo Conference (September 16th and 17th)

CAI Canada is holding a two-day virtual conference. The conference includes a virtual exhibit hall with numerous opportunities to chat with exhibitors. There are also various sessions planned, including a keynote, a legal panel, COVID panel, and concurrent sessions on maintenance projects, AGMs, telecommunications, ethics, electric vehicles, and chargebacks. Register now:

https://bondexec.eventsair.com/cai2020/reg2020/Site/Register

CCI London’s AGM & Special Presentation (September 22, 2020 at 11:30 am)

CCI London is hosting its AGM using Zoom with a special presentation on condo safety to follow the business portion of the meeting. Register now:

https://www.cci-sw.on.ca/events/2020/09/22/annual-general-meeting-special-presentation

Lastly, remember to save the date for the CCI Grand River Chapter’s first virtual condo conference on November 20 and 21. The Friday is for property managers only and includes a legal panel discussion. The Saturday is open for all members and non-members and will include 3 concurrent sessions, a Q & A session, and exhibitor hall. Registration and sponsorship opportunities will be available starting September 15, 2020! Space is limited.

The CAT is Growing…

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As you may know, Bill 159, Rebuilding Consumer Confidence Act, 2020, received royal assent on July 14, 2020. Ten statutes are affected by Bill 159, including the Condominium Act, 1998, the Condominium Management Services Act, 2015, and legislation related to the construction of condominiums. On August 25, 2020, a new regulation was made under the Condominium Act, 1998 (O.Reg. 465/20) to expand the jurisdiction of the Condominium Authority Tribunal (CAT).

On October 1, 2020, the CAT will start to hear disputes about people, pets and parking (as well as other disputes). The CAT’s jurisdiction is described in O.Reg. 179/17. Effective October 1, 2020, the following will be added to the regulation:

Note: On October 1, 2020, the day subsections 18 (1) and 19 (2) of Schedule 1 to the Rebuilding Consumer Confidence Act, 2020 come into force, subsection 1 (1) of the Regulation is amended by striking out “and” at the end of clause (b), by adding “and” at the end of clause (c) and by adding the following clause: (See: O. Reg. 465/20, s. 1 (1))

(d) subject to subsection (3), a dispute with respect to any of the following provisions of the declaration, by-laws or rules of a corporation:

(i) Provisions that prohibit, restrict or otherwise govern pets or other animals in a unit, the common elements or the assets, if any, of the corporation.

(ii) Provisions that prohibit, restrict or otherwise govern an automobile, motorcycle, van, truck, trailer, bus, mobile home, farm tractor, bicycle, motor-assisted bicycle, motorized snow vehicle, motorboat, rowboat, canoe, kayak, punt, sailboat, raft, aircraft, device used to facilitate the transport of a person with a disability, or any other vehicle drawn, propelled or driven by any kind of power, including muscular power, in a unit, the common elements or the assets, if any, of the corporation.

(iii) Provisions that prohibit, restrict or otherwise govern the parking or storage of items in a unit, an asset, if any, of the corporation, or any part of a unit, an asset or the common elements, that is intended for parking or storage purposes.

(iv) Provisions that govern the indemnification or compensation of the corporation, an owner or a mortgagee regarding a dispute described in this clause.

In short, the CAT will hear disputes about the declaration, by-laws or rules that relate to: 1) pets; 2) parking and vehicles; 3) parking and storage areas; and 4) indemnification rights related to any of the other disputes within the jurisdiction of the CAT.

Of note, the regulation goes on to state that the CAT will not have jurisdiction for any of the areas described above if the dispute is also related to section 117 of the Act (dangerous condition or activity), section 98 (changes made to common elements by owners), or subsection 24.6(3) of O. Reg. 48/01 (electric vehicle charging stations).

It will be interesting to see how the condo industry reacts to the CAT’s expanded jurisdiction.

WARNING! At Capacity for 2020

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This post will be a short one. I wanted to let people know that many of the companies offering virtual condominium hosting services are almost booked for the remainder of 2020 for hosted events (i.e. with moderators). Some of the providers have other options available (i.e. online proxies, electronic voting only, no moderator), but you’ll want to reach out to your providers ASAP if you are looking for a full package. There may be capacity issues for some of the alternatives as well, so it is best to get your AGM scheduled ASAP if you haven’t done so yet. Continue reading

Electricity Providers’ Requirement for a Security Deposit

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The Ontario Energy Board Distribution System Code (the “OEB Code”) provides that all local electricity distributors’ Conditions of Service must fall within the framework of the OEB Code when requiring electricity security deposits from their customers.

Given the above, when a condominium is presented with the requirement from an electricity distributor (ex. local municipal hydro corporation) to pay a security deposit, the Conditions of Service of the electricity distributor should be reviewed to ensure the request complies with the OEB Code.

In short, the OEB Code does not always require new residential condominiums (as residential customers) to provide security deposits to electricity distributors.

Section 2.4.10 of the OEB Code provides residential customers are deemed to have a “good payment history” (the absence of which allows for requiring a security deposit), unless one of the enumerated default events in section 2.4.9 has occurred.  Being a new customer is not one of the listed events.

More specifically, a condominium should be aware of some of the following provisions under the OEB Code:

1. Residential Condominiums are residential customers: under section 2.4.30A of the OEB Code condominiums with units predominantly used for residential purposes are “deemed a residential customer for the purposes of section 2.4.9” which provides the basis for the electricity distributor’s requirement of a security deposit.

2. Requirement for Security Deposit: section 2.4.9 of the OEB states in part (see below) that a security deposit can be required by the electricity distributor unless a residential customer has a good payment history of one (1) year subject to restrictions regarding calculating the good payment history period and reasons requiring the security deposit form the customer:

2.4.9 A distributor may require a security deposit from a customer who is not billed by a competitive retailer under retailer-consolidated billing unless the customer has a good payment history of 1 year in the case of a residential customer, 5 years in the case of a non-residential customer in a <50 kW demand rate class or 7 years in the case of a non-residential customer in any other rate class. The time period that makes up the good payment history must be the most recent period of time and some of the time period must have occurred in the previous 24 months. A distributor shall provide a customer with the specific reasons for requiring a security deposit from the customer.

*Note: recent amendments to section 2.4.9 that came into effect March 1, 2020, provide that before requiring a security deposit from a residential customer that has not been serviced by the electricity distributor in the previous twenty-four (24) months, the customer shall have the option to enroll in an equal payment plan, pre-authorized payment plan, or both.  If one of such enrollment options is chosen no security deposit can be required unless there is default by the customer.

2.4.9A Before requiring a security deposit under section 2.4.9 from a residential customer who has not been served by the distributor in the previous 24 months, a distributor shall offer the customer the option of enrolling in an equal monthly payment plan in accordance with the Standard Supply System Code, a preauthorized payment plan, or both, and where the customer elects to enroll, no security deposit shall be required

3. Deemed Good Payment History: section 2.4.10 (see below) provides that in the absence of certain default events a customer shall be deemed to have a good payment history for the purposes of requiring a security deposit:

2.4.10 For the purposes of section 2.4.9, a customer is deemed to have a good payment history unless, during the relevant time period set out in section 2.4.9, the customer has received more than one disconnection notice from the distributor, more than one cheque given to the distributor by the customer has been returned for insufficient funds, more than one pre-authorized payment to the distributor has been returned for insufficient funds, a disconnect / collect trip has occurred or the distributor had to apply a security deposit in accordance with section 2.4.26A and required the customer to repay the security deposit in accordance with section 2.4.26B. If any of the preceding events occur due to an error by the distributor, the customer’s good payment history shall not be affected.

A plain reading of this section suggests condominiums should push back against electricity distributors requiring payment of a security deposit on the grounds they are already deemed to have a good payment history and have not committed any of the events of default listed in 2.4.10. This argument could be resisted by the fact the new customer is deemed to have a good payment history but 2.4.10 does not say the good payment history is deemed to be for the time period required by 2.4.9. However, 2.4.10 does note that the deeming of a good payment history is “for the purposes of 2.49”.

As noted, not having a payment history is not one of the listed items that contradicts the deeming of a good payment history.

This provision can also be especially important when electricity distributors try and require developers or condominium corporations to pay a security deposit for each subsequent phase after the initial registration of a standard condominium plan.

It is possible the above position will be considered overruled by the amendment to the OEB set out in 2.4.9A and a new condominium may be forced to elect to enrol in one of the payment methods set out in that subsection.

If this argument is resisted because of there being no payment history, the condominium should choose to enroll in an equal payment plan, pre-authorized payment plan, or both in light of the provisions in 2.4.9 that provide if one of such enrollment options is chosen no security deposit can be required.

4. Amount of Security Deposit: Effective March 1, 2020 section 2.4.12 which sets out the formula for the maximum security deposit an electricity distributor can require reads:

The maximum amount of a security deposit which a distributor may require a customer to pay shall be calculated by multiplying the distributor’s billing cycle factor and the customer’s estimated bill (which shall be based on the customer’s average monthly load with the distributor during the most recent 12 consecutive months within the past two years). Where relevant usage information is not available for the customer for 12 consecutive months within the past two years or where the distributor does not have systems capable of making the above calculation, the customer’s average monthly load shall be based on a reasonable estimate made by the distributor.

Also, important to note is section 2.4.16 which establishes the billing cycle factor used in the formula:

2.4.16 For the purposes of sections 2.4.12, the billing cycle factor is 2.5 if the customer is billed monthly, 1.75 if the customer is billed bi-monthly and 1.5 if the customer is billed quarterly.

5. Payment of Security Deposit: If the condominium for some reason agrees to pay the electricity distributor’s security deposit, the condominium should be aware that sections 2.4.20 and 2.4.20A permit condominiums to pay the deposit in equal installments over at least 6 months rather than as a single lump-sum payment.

6. Review/Return of Security Deposit: sections 2.4.22-23 of the OEB Code provide that a customer’s security deposit must be reviewed by the electricity distributor at least once in a calendar year to confirm if the customer should be returned the deposit as it is now exempt in accordance with section 2.4.9.  If payment of the deposit was made via equal installments the distributor’s review shall occur on the anniversary of the calendar year in which the customer made their first payment.

Note: Section 2.4.28 contains provisions for returning the deposit to a 3rd party in situations where a 3rd party (ex. developer) paid the security deposit on behalf of a customer (ex. condominium)

The electricity distributor also should have Conditions of Service that may provide further arguments against a requirement for a security deposit depending on how the Conditions of Service are written. If the local Conditions of Service contradict the OEB Code, the OEB Code overrides the local Conditions of Service according to Sections 1.4 and 1.5 of the OEB Code.

It is therefore important for condominiums and developers to confirm if their electricity distributor’s Conditions of Service comply with the OEB Code’s standards when requiring a security deposit.

If an electricity distributor continues to insist on a security deposit from a residential condominium or proposed residential condominium, the Consumer Complaint Response Process set out in Section 10 of the Code should be implemented. This process sets out some relatively short time periods for the electricity distributor to respond to the complaint.

Condominiums must also ensure no default in payment occurs to their electricity distributor as default in payments opens the condominium up to having to pay a security deposit.