Changes are Coming – Changes by Condo

change.jpgAs you may know, section 97 of the Condominium Act, 1998 (the “Act”) addresses changes made to the common elements, assets, and services of the condominium. In the amendments to the Act, section 97 will be removed and replaced with a new section 97.

What’s changing?

The awkward language “addition, alteration, or improvement” will be replaced with “modification” (although the three words will form part of the definition of modification). Section 97 will also add a requirement that the board must conduct an assessment of the cost of any proposed modification where it is required to give notice to the owners.

Apart from the language, there are some other big changes coming to section 97.

Changes without notice

It appears that condominiums will still be able to make changes without notice to the owners if: 1) the condominium must do so to comply with agreements (i.e. shared facilities) or law (see s.97(2)(a)); and 2) for safety and security reasons (s.97(2)(b)). However, the third situation described in subsection 97(2)(c), which is based on the estimated cost, will change significantly. The regulations may add other situations where notice is not required.

Currently, condominiums can make changes without notice to the owners if the estimated cost in any given month is no more than the greater of $1,000 and 1% of the annual budgeted common expenses for the current fiscal year. The amendments will change it to the lesser of 3% of the annual budgeted common expenses and $30,000, but it also adds another requirement before this section can be used: the condominium must be satisfied that the owners would not regard the change as causing a material reduction or elimination of their use or enjoyment of the property. Thus, even if the total cost is minimal, the condominium may still be required to give notice to the owners if the change will interfere with their use and enjoyment of the property.

Changes made with notice

The process for making changes with notice to the owners will also change. First, it will require the condominium to provide prescribed statements: 1) if the owners would, on an objective basis, regard the proposed change as causing a material reduction or elimination of their use or enjoyment of the property; or 2) the estimated cost of making it along with the manner in which the condominium proposes to pay for it. The notice to owners will still describe the proposed change, include a copy of section 46 and 97, and advise the owners that they have the right to requisition a meeting. The condominium may go ahead with the proposed change: 1) if the owners do not requisition a meeting within 30 days of the notice; 2) if the owners do not vote against the change at a meeting; and 3) (the new one) if a quorum is not present at the first meeting called to vote on it.

What’s not changing?

Maintenance and repairs without notice

The amendments will not change a condominium’s ability to complete maintenance and repairs without notice to the owners if the condominium use materials reasonably close in quality to the original given current construction standards.

Substantial changes

Substantial changes will remain the same. A substantial change will still be defined as one where the estimated total cost exceeds the lesser of 10% and a prescribed amount (if any) or the board elects to treat it as substantial.  The condominium will need to get 66 2/3 of the owners to vote in favour of the proposed change at a meeting before it can go ahead with it.