Condo Act Reform – #3 Dispute Resolution

The third area of the report is a complete overhaul of the existing dispute resolution process contained within the current Act. As you may know, the current Act contains a few different processes depending upon the nature of the dispute. The recommendations aim to clarify the dispute resolution processes.

The most significant recommendation is that a “Condo Office” should be created to:

  1. Provide information and advice;
  2. Administer the new dispute resolution office;
  3. Promote education;
  4. Collect and provide information on condominium disputes; and,
  5. Administer a registry of condominiums in Ontario.

The Condo Office would be funded by a “modest levy” on each condo unit. The levy would be collected and remitted by the condominium.

The Condo Office would provide two types of dispute resolution processes for disputes between owners and condominiums: 1) Quick Decision Maker; and 2) Dispute Resolution Office. The Quick Decision Maker would render a decision. The Dispute Resolution Office would assist the parties to resolve the issue. A mandatory 1-2 hour session would be involved. If the parties cannot agree the dispute would go to mediation, and if necessary, arbitration.

Quick Decision Maker

Dispute Resolution Office

Superior Court of Justice

Chargebacks

Declaration, by-laws and rules

Lien Enforcement (i.e. Power of Sale)

Record requests (s.55)

The Act (other than those that may proceed to court)

Oppression (s.135)

Requisitions (s.46)

Enforcement of section 98 agreements

Dangerous Conditions or Activities (s.117)

Proxies

Conflict of Interest (ss.40 & 41)

Entitlement to vote (ss. 48 & 49)

Breach of duties and negligence claims

Fraud

Validity of meetings

Disputes between developers and condominiums for agreements, the budget statement, or a first-year deficit would continue to use the mediation and arbitration process, but it would include a new default procedure to ensure disputes are resolved more quickly and efficiently. Other disputes, such as construction defect claims, would be referred to the courts.

Shared facilities disputes would use a process similar to the one used for disputes between developers and condominiums.

Disputes between condominiums and property managers would be resolved by the Condo Office or courts. Mediation and arbitration would no longer be used.

The recommendations also include a suggestion that both the owner and condominium should be able to receive their reasonable costs for a successful claim. Currently the presumption is only in favour of the condominium. This would not apply to the Quick Decision Maker process or the Dispute Resolution Office.

In my opinion a complete overhaul of the existing dispute resolution processes is not necessary. Perhaps I am in the minority, but I believe the existing processes are suitable for most disputes that arise in condominiums. The Dispute Resolution Office seems to just add a further layer that will cost the parties more in legal fees than if they used the current processes. There is also the issue of the “modest levy” that will increase fees for all condominiums in the province. However, I will acknowledge that some form of quick resolution process could be more affordable than the current processes used for things like record requests. That said, I do have concerns with the Condo Office. In my experience, some administrative tribunals or boards tend to favour one side of the dispute, typically the one they perceive as being bullied. In the condominium context, a bias may develop against the “big bad condominium corporation” that is picking on the “poor innocent unit owner”. An independent neutral third party is the best adjudicator of a dispute.

Up next week #4: Governance.