Condo Act Reform – #1 Consumer Protection: Disclosure Obligations

The first of five areas to be reviewed is “consumer protection”. Many critics of the current Condominium Act, 1998, suggest that it does not adequately protect consumers, especially from developers. As a result, there are a number of suggestions aimed at protecting purchasers and owners. Many of the suggestions are aimed at requiring more or better disclosure

  1.  The government should publish a guide on condo living for purchasers and owners. 
  2.  The developers should be required to create websites for each project so purchasers can search for key terms in the disclosure package.
  3. There should be a standard declaration defining the unit boundaries, maintenance and insurance obligations (like in other provinces), but the developer could add schedules with additional duties or obligations.
  4. The definition of “material change” should be refined to make it easier for purchasers to understand when they would be entitled to rescind their agreements with the developer.
  5. Status certificates should be improved to require additional information (i.e. pet restrictions). The fee should also be increased to $125.00.

In my opinion, the most significant of the above changes is likely the standardization of the declaration. This would make the legislation in Ontario more similar to the legislation in British Columbia, which currently includes standard boundaries and maintenance obligations within its legislation (called the “Strata Property Act”).

While standardization would make it easier for people moving from one condominium to another, it would take away much of the customization that some developers, purchasers and owners desire. The Act was amended in 1998 to provide for a wider variety of options for condominiums in Ontario, including standard, phased, vacant land, common element, and leasehold. Even if the standardization is limited to standard residential condominiums only, as suggested, it is hard to conceive of a standard that would be suitable for all condominiums. Residential condominiums include detached homes, townhomes (ordinary or stacked), low-rise, mid-rise, and high-rise buildings. For instance, what about “whole lot” condominiums (those with units that include most or all of the property surrounding the building structure) that are otherwise “standard” condominiums for the purposes of the Act? Will “whole lot” condominiums disappear in Ontario?

Many questions remain unanswered regarding the full extent of the standardization proposed as the process is still in the early stages. Hopefully it will be thoroughly researched and investigated before considered as an amendment to the Act as it would be a significant change to the condominium landscape in Ontario.

Up next week – #1 Consumer Protection: Dealing with the Developer