November 1, 2017 was a big day for the condominium industry in Ontario. The Condominium Management Services Act, 2015 came into effect, as did significant amendments to the Condominium Act, 1998 brought in through the Protecting Condominium Owners Act, 2015. While not all of these changes were directed exclusively at condo managers, many were, and almost all the changes that were not strictly for managers would still have a huge impact on them and their work.
Working in property management can be rewarding, but it can also be stressful, and emotionally and physically draining. This was the case before the CMSA and the Condo Act amendments came into play, and it has increased exponentially, as a result of those changes as well as the COVID-19 pandemic.
Overall, these changes are positive for the industry, but the effect they have had on condo managers and management companies cannot be ignored.
Effects of the Condominium Management Services Act
Prior to the CMSA, there were courses that property managers could take to learn about condo management, and certifications (such as RCM) that they could obtain to show their experience in the field, but there was no requirement for managers to take those courses or get those certifications.
Overall, the requirement for licensing is a good thing, as it provides condo corporations and their boards with the confidence that their property manager has a good, base level of understanding condos and their operations. However, this requirement has added work and costs for property managers and management companies.
For any level of license—whether limited, transitional (now expired), or general—the Excellence in Condominium Management course is mandatory. In order to obtain a general license, a manager must take an additional five courses: Law, Relationship Building, Building Operations and Maintenance, Financials, and Operational Quality. Once issued, the licenses must be renewed annually.
In addition to the educational requirements, there are significant fees involved: a one-time application fee of $150, a fee of $150 for the Excellence in Condominium Management course, and annual fees of $567 for individual licenses or $799 + $327 per employed licensee for management companies. Errors and omissions and fidelity insurance are also both required. These costs are not insignificant, and can be difficult for management companies to pass on to their customers when condo boards are already dealing with strained budgets, particularly in this post-pandemic economy.
Effects of the Condo Act amendments
The first amendments to the Condo Act that came into play involved the filing and preparation of certain documents on behalf of condominiums, and the payment of fees to the Condominium Authority of Ontario (CAO). Condominiums are now required to file an initial return, a return upon turn-over of a new condo, an annual return, and/or a transitional return, as applicable.
Condos must also send information certificates to owners: the periodic information certificate, sent out twice per year; the information certificate update, sent out within 30 days of certain key changes regarding the condo; and the new owner information certificate, sent to new owners when the condo is provided notice of the change of ownership. New, stricter requirements were put in place regarding notice of owners’ meetings and retention of records.
Each of these changes meant additional work for property managers, who were left to deal with the forms and filings. Management contracts that had been previously entered into did not involve these services, so management companies began to have to choose between doing the work without additional payment or trying to negotiate new or amended management agreements. New agreements being entered into included, quite understandably, increased management fees.
And if the additional stress of all of those changes was not enough, there was the Condominium Authority Tribunal (CAT). First hearing only records disputes, then disputes regarding people, pets, and parking (and storage). As of January 1st, 2022, the CAT started hearing matters dealing with nuisances, annoyances, or disruptions. This means that now, the vast majority of disputes over day-to-day operational issues fall under the jurisdiction of the CAT.
The CAT and property managers
Unlike other tribunals and courts, a licensed legal representative is not required at the CAT; in fact, a licensed condominium manager is one of the specific categories of people who are permitted to represent condo corporations at the CAT. As a result, since the CAT’s beginning, many condos have expected their property managers to represent them in CAT matters, and many managers have done so.
There are many problems with having property managers act as a condo’s legal representative in a CAT application. Property managers, generally speaking, do not have legal training or the necessary knowledge and experience to draft legal pleadings and arguments, present evidence, cross-examine witnesses, and other steps that may be involved in a CAT application. This can put condos at a disadvantage if they are not putting their ‘best foot forward’, so to speak.
Second, CAT applications can be incredibly time-consuming. This can cause immense difficulties for managers who are trying to carry out their day-to-day duties, which can lead to boards and owners being frustrated if they feel that other issues are not being addressed in a timely manner.
Third, because of the time involved, this can also create problems with respect to management fees. As with the additional filing and information requirements discussed above, management companies are being forced to choose between having their managers provide those services, if the management contracts do not expressly address it, or negotiating new or amended agreements. And condo boards are rarely happy about entering into new or amended agreements when those agreements contain significant management cost increases.
Overall impact on condo management
As with so many industries in the current economy, there is a significant shortage of property managers. Many have left the industry – whether by choice or otherwise – when the licensing requirements came in, as the additional time and effort involved was more than they wanted to take on. Others have since left because of stress and burnout, thanks to all of the additional work that is now part of a manager’s duties, as well as the effects of the pandemic.
This shortage leads to additional strain on the remaining managers who are required to take on more portfolios or leave clients behind. Property managers are, at their core, people who help. Leaving clients behind or doing a job that is not their best is not where any manager wants to be.
Having property managers act as condo representatives at the CAT puts a particularly large and unnecessary burden on the industry as a whole. Rather than losing managers due to the strain that all these changes have caused, there needs to be greater support for retaining this talent and attracting new managers to the field.
Laura is a partner with Cohen Highley LLP and is part of the multi-residential housing group. Her practice focuses on condominium law, acting for condominium corporations, property managers, and developers in a broad range of litigation, operational and governance matters. Laura is actively involved in the condominium and multi-residential housing industry. She regularly writes and speaks about legal issues affecting the industry. Since 2014, Laura has been a board member of the Canadian Condominium Institute (London Chapter) and the board of directors for Homes Unlimited (London) Inc.
Stephanie has spent her legal career working with condominium corporations, property managers and unit owners, assisting them with day-to-day condominium governance matters. An active member of the condominium community in Ontario, Stephanie is involved in the Canadian Condominium Institute (CCI) Golden Horseshoe, Grand River, and London chapters, and sits on various CCI committees as well as the Grand River Board. She is a frequent speaker at CCI conferences, courses, and seminars and contributes articles to condominium publications.