Reg#2 Released for Comment

feedbackAs you probably know by now, the government intends to release draft regulations to go along with the amendments to the Act. The purpose of releasing the draft regulations is to allow for public comment. The first draft regulation, which was released in December, addressed the mandatory licensing of managers.For the first draft regulation, the deadline for comments has passed.

The second draft regulation, which was released this week, is aimed at common condominium issues: communications from condominiums to owners and mortgagees; mandatory disclosures and training for directors; meetings and voting; and record retention and access to records. The government posted the full draft regulation and a reader-friendly version on its website. The deadline for public comments for the second draft regulation is March 30th, 2017. In the next few posts, I’ll describe some of the key features of the second draft regulation.

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Reader Q: What does Royal Assent mean for us?

As you probably know by now, the Protecting Condominium Owners Act, 2015 (Bill 106) received Royal Assent on December 3rd, 2015. I have had a couple of people ask me what this means for the industry.

I won’t go into too much detail on the process, but there are multiple stages that a bill must go through before it becomes law. The general process is:

  1. First Reading – the purpose of the bill is explained.
  2. Second Reading – the bill is debated.
  3. Review by Committee – public hearings may be held and amendments considered.
  4. Report to House – committee reports bill with any amendments.
  5. Third Reading – the bill is voted on.
  6. Royal Assent (if approved) – the Lieutenant Governor signs the bill and it becomes law.

For more information, visit the Ontario Legislature’s website.

The Protecting Condominium Owners Act, 2015 completed the above stages on December 3rd, 2015. This does not mean that the Act is now in force. The only provisions in force now are changes to the french language version of the Act and to other pieces of legislation like the Building Code, Land Titles Act, Planning Act, and Land Transfer Act. 

Most of the remaining amendments will come into force on dates to be proclaimed by the Lieutenant Governor. Most reports indicate that this will be in 2017. This delay is necessary to allow the regulations to be prepared, set up the new organizational structure (i.e. of the Condo Authority & Tribunal), and allow those in the industry to learn the new requirements.

Now that the bill has passed I’ll write more on the amendments in later posts.  If you have a question about the amendments feel free to write to me and I may include it in a future post.

Condo Reform #4 – Governance: Records and Meetings

Condominium communities are small democracies with their own set of unique challenges. Like many democracies, the board of directors is often criticized by the owners for the decisions made, or not made, but are rarely praised for their hard work. Given the wide range of values, interests, and characteristics of condominium inhabitants, it not surprising that governance issues account for a large proportion of the disputes that arise in condominiums.

Given the importance of proper governance to the financial health and stability of condominiums, the working group made several recommendations to improve the governance of condominiums. The recommendations were in five key areas:

  1. Access to Records & Information
  2. Meetings
  3. Directors and Officers
  4. Fines
  5. Owners’ & Directors’ Rights & Responsibilities.

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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; Continue reading

Condo Act Reform – #2 Financial Management: Fraud

Fraud has been a hot topic in condominiums for the past few years. While incidents with large monetary amounts involved receive plenty of media attention, there are many incidents that receive little or no media attention because of the relatively small amount involved.

Not surprisingly, the working group and expert panel reviewed the matter in great detail to determine if further steps are required to discourage fraud in condominiums. They identified the following areas of concern: Continue reading

Condo Act Reform – #2 Financial Management: Operating Budgets

In my experience, the area most likely to cause conflict at an owners meeting is the board’s spending over the previous year. I have been to countless meetings where an owner cannot believe how much the board spent on landscaping, repairs, water, or lawyers (who would have guessed?). And when they discover that the board (and the board alone) sets the budget for the condominium? Look out! Continue reading

Condo Act Reform – #2 Financial Management: Reserve Funds and Reserve Fund Investments

Today I will be addressing reserve funds and reserve fund investments. Every condominium in Ontario must have a reserve fund to pay for major repairs and replacements of the common elements and assets of the condominium (see sections 93-95 of the Act and the regulations). The Act currently requires every board to engage a professional to conduct a reserve fund study, which must be updated every three years. There are three types of studies: comprehensive, with a site inspection, or without a site inspection. Continue reading

Condo Act Reform – #2 Financial Management: Educating and Informing Owners

This is the first of four posts addressing the suggestions made by the expert panel with respect to the financial management of condominiums in Ontario. Many of the suggestions address serious issues that cost owners millions of dollars each year, ranging from financial mismanagement to outright fraud and theft. This post will describe the suggestions made regarding the average owner’s lack of education and information. Continue reading

Condo Act Reform – #1 Consumer Protection: Noise

This is the third of three posts on the suggestions for amendments to provide greater consumer protection. Anyone that has lived in, or worked for, a condominium is familiar with the frequency of noise complaints. Sometimes the complaints stem from overly sensitive individuals; sometimes the noise complaints are legitimate. Whatever the reason, every condominium has at some point experienced a noise issue. To address noise issues, the expert panel has made the following suggestion: Continue reading